Colgate to step up herbal presence as competition grows

The country’s largest oral care company, Colgate-Palmolive, will ramp up its herbal portfolio in the next few quarters.

It reported a three per cent decline in volume growth for the March quarter. While in line with Street estimates and lower than the 12 per cent decline in volume growth reported for the December 2016 quarter, this does not bode well for the company, analysts said.

The trend, says Sachin Bobade, analyst for fast-moving consumer goods at city-based brokerage Dolat Capital, appears to be in favour of companies pushing herbal oral care products. 

“Patanjali has been growing its share in oral care, according to its statements recently, where it said it had achieved market share of 14-15 per cent share in toothpastes. Dabur has seen a  share gain of one per cent (110 basis points) for the March quarter, indicating there is traction for its products, which are based on Ayurveda. 

Colgate, on the other hand, saw market share fall sequentially from 55.6 per cent in the December quarter to 55.1 per cent in the March one,” he says. 

In an analyst call on Monday to discuss its March quarter results, Colgate’s management said Cibaca Vedshakti, a herbal toothpaste it launched in August 2016, would not be the last thing in its naturals portfolio. 

“So far, Vedshakti has been doing well. Soon, we will see other naturals products from Colgate as we continue to innovate in the category,” the management said.

Colgate has been working on its naturals portfolio for nearly two years. It first responded to the herbal revolution, kicked off by Patanjali, in June-July of 2015 when it launched Active Salt Neem toothpaste, its first indigenously developed one. Following with launches containing clove oil and charcoal, respectively.

The year 2016 saw the company launch its second indigenously developed toothpaste in Cibaca Vedshakti, with additional ones supporting its clove oil portfolio (sensitive clove toothpaste). But, for all the effort in the herbal category, the overall toothpaste share for Colgate has declined 220 basis points in the past year and three months, analysts said. 

The management said told analysts on Monday that it would continue to see pressure on stocks in wholesale channels, due to the impending goods and services (GST) tax, leading to softness in volume growth and market share. 

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