Colgate-Palmolive shifts focus as Dabur, Patanjali ride herbal wave

Colgate-Palmolive India is placing greater emphasis on freshness, whitening, therapeutic, and family toothpastes, as rivals such as Dabur and Patanjali dominate the growing naturals segment of the market.
 
Once under 5 per cent of the Rs 10,000-crore domestic toothpaste market, the naturals segment, which includes ayurvedic and herbal variants, is now 25-30 per cent of the market, industry executives said. Growth rates of the naturals segment are estimated to be in the region of 8-9 per cent in volume terms. In value terms, the growth rate for naturals is around 10-12 per cent, sector experts said.
 
While Colgate has the Vedshakti brand in the naturals segment, experts say the product has not helped stem market share loss for the oral care major. Colgate has a volume and value market share of 49.9 per cent and 46.9 per cent, respectively, according to the Nielsen data sourced from the industry. The figures are for calendar 2020. The data for the first half of calendar 2021 was not immediately available.
 
In 2019, volume and value market shares for Colgate stood at 51 per cent and 48.3 per cent, respectively.
 
Dabur, on the other hand, has 16.4 per cent and 13.9 per cent volume and value market shares for 2020. This is an increase over 15.5 and 13.3 per cent volume and value market shares registered in 2019.
 
According to analysts Jaykumar Doshi and Sushruta Mishra of Kotak Institutional Equities, while Colgate is focusing on the family toothpaste segment in rural areas, freshness, whitening, and therapeutic toothpastes are platforms it is building in metros. “We expect the twice-brushing agenda to regain prominence post Covid-19. Robust market share gains in e-commerce and modern trade support the premiumisation potential in urban areas for Colgate,” the analysts said.

 
A mail sent to Colgate elicited no response till the time of going to press. However, in an investor call last month, Colgate’s India Managing Director Ram Raghavan had said the company was making sure it brought the best technology to life across every single price point. “We continue to look at all new opportunities where we can drive thought leadership in the oral care category,” he said.
 
In the past few months, Colgate launched a new toothpaste for diabetics, an oil-based mouthwash, and mouth spray under Vedshakti and strengthened the presence of brands such as Colgate Visible White on social media. Under brand ambassador Ranveer Singh, it has pushed the freshness promise aggressively and also driven home the point of being a toothpaste for all.
 
These interventions may change the market share trend for Colgate going forward, some analysts said, though rivals Dabur and Patanjali are closely tracking developments. Over the past few years, Dabur has been gradually shoring up market share within toothpastes, driven by its herbal/ayurvedic portfolio.
 
Mohit Malhotra, chief executive of Dabur India, says the firm has responded to the naturals trend by launching variants at every end of the market. “We are at the bottom of the pyramid with Babool. We have a presence in the middle of the market with Dabur Red. We are also present at the premium end with herbal variants,” he said.
 
Patanjali, while credited for growing the naturals segment in toothpastes, has slowed in terms of market share gains. This is visible in its value market share, which stood at 9.5 per cent in 2020, ahead of the 9.3 per cent share seen in 2019. Volume market share for Patanjali, however, inched up 100 basis points, touching 11 per cent in 2020 from 10 per cent in 2019.
 
“Brands such as Patanjali have built this narrative that toothpastes with natural ingredients are a safer bet than white toothpastes. This is why the naturals market has grown in the last few years. Dabur has capitalised on this opportunity and continues to make strong strides in the area,” says Sachin Bobade, vice-president, research at Mumbai-based brokerage Dolat Capital.
 
Malhotra says he sees potential for growth in naturals as more people make the shift from white toothpastes to herbal variants. “There is no price differential between a white toothpaste and a herbal variant today. So the shift becomes easier for consumers,” he says.
 
Dabur proposes to scale up its Dant Rakshak toothpaste franchise, launched recently. It also intends to keep the momentum going on brands such as Meswak, Babool, Dabur Red, and Dabur Herbal toothpastes.