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Colgate to battle Patanjali's Dant Kanti with herbal toothpaste Vedshakti

By Sagar Malviya & Neha Tyagi, ET Bureau | Updated: Aug 01, 2016, 09.43 AM IST
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Cibaca Vedshakti seems to be aimed squarely at the Baba Ramdev led Patanjali, which has challenged the multinationals
dominance in the segment with its Dant Kanti toothpaste.

MUMBAI: Call it the Ramdev effect. Almost 80 years after Colgate-Palmolive entered the
country, the oral care giant is launching an India-focused brand as Patanjali Ayurved threatens to
upend the established order in fast-moving consumer goods.

Cibaca Vedshakti seems to be aimed squarely at the Baba Ramdev led Patanjali, which has
challenged the multinational's dominance in the segment with its Dant Kanti toothpaste.
While Colgate has been selling herbal variants such as neem and clove in the country, this is the
first indigenous brand in the ayurvedic segment for the $16-billion global giant that controls
more than half the oral care market in India.
"In India, the consumer believes strongly in natural ingredients. A toothpaste launching this
quarter under the Cibaca sub-brand is Colgate Cibaca Vedshakti," Bina Thompson, senior vice-
president at Colgate-Palmolive, said in an investor call on Friday. "The positioning is a
toothpaste packed with the goodness of natural ingredients to help keep dental problems away."
There is a growing preference for products that are said to have 'natural' ingredients these now
account for 13-14% of the overall toothpaste market.

The Indian unit of Colgate, which historically hasn't had a sizeable presence in this segment,
responded to this last quarter, by revitalising Active Salt Neem and launching sensitive Clove
toothpaste. These products have a combined share of more than 7% of the overall toothpaste
market now. Patanjali, however, objected to the new name, suggesting that it wasn't
appropriate.Ayush or jadibooti should have been used instead.

"We worship and respect Vedas like our gods, we don't use them in our products. This is not a
toothpaste but a direct attack on our culture," said Acharya Balkrishna, MD of Patanjali Ayurved,
which earlier this year said it had potential to upstage leading consumer product multinationals
including Colgate and estimated sales of Dant Kanti toothpaste at Rs450 crore. Patanjali's oral
care market share has been pegged at nearly 2% in the year ended March, according to industry
executives citing market researcher Nielsen's data. However, Nielsen doesn't track sales at
Patanjali's own stores. At the same time, Colgate has lost nearly 1.5 percentage point in market
share although it still dominates at 55%.

Analysts expect Colgate will be able to fight back against local competition despite being a late
mover. "Colgate's aggression is reminiscent of the famous Wheel-Nirma war," said Abneesh Roy,
senior vice president at Edelweiss Securities, referring to a battle between Hindustan Unilever
Ltd and homegrown Nirma in detergents. "The only difference is HUL was fighting a price war
while Colgate is competing on the product front."

With Patanjali's rise to a Rs5,000-crore company in less than a decade, other MNCs have shifted
focus to ayurveda too. HUL has relaunched Ayush and acquired Indulekha while L'Oreal
launched a hair care range under Garnier Ultra Blends made with natural ingredients. However,
these are on the premium front unlike the Colgate product that's in a lower price range. Colgate's
new toothpaste will be priced at Rs 50 for a 175 gram pack, about 30% cheaper than Patanjali's
Dant Kanti. Colgate has global experience in natural segment, having acquired Tom's of Maine
in the US a decade ago while Colgate Mishvak is present in Turkey, Indonesia and elsewhere. It
also has wider reach Patanjali has products in 2 lakh traditional retail outlets while Colgate
has access to more than 5 million stores, analysts said.
2. Herbal Wars: Colgate takes on Patanjalis Dant Kanti with Vedshakti

By Indiaretailing Bureau

With Yoga guru-turned-businessman Baba Ramdevs herbal toothpaste, Dant


Kanti successfully edging out competition in the oral care segment in India, toothpaste
giant Colgate is rethinking its strategy 80 years after it forayed into India.

Cibaca Vedshakti seems to be aimed squarely at the Baba Ramdev led Patanjali, which
has challenged the multinational's dominance in the segment with its Dant Kanti
toothpaste.
For the first time since it entered the Indian market, Colgate is launching an India-
focused product a herbal toothpaste called Vedshakti.

According to a report in The Economic Times: Cibaca Vedshakti seems to be aimed


squarely at the Baba Ramdev led Patanjali, which has challenged the multinationals
dominance in the segment with its Dant Kanti toothpaste.
While Colgate has been selling herbal variants such as neem and clove in the country,
this is the first indigenous brand in the Ayurvedic segment for the $16-billion global
giant that controls more than half the oral care market in India.

Patanjali Ayurved, which reported a turnover of Rs 5,000 crore in the last fiscal, has
been gaining the edge over FMCG biggies including Oral B, whose toothpaste has been
edged out of the market because of Patanjali Dant Kanti.

Patanjali currently manufactures 444 products including 45 types of cosmetic products


and 30 types of food products, all made from Ayurveda and natural components,
according to the company.

Patanjali products sell like hot cakes since they are cheaper as compared to their MNC
alternatives in the market. Retail experts say that this lower costing of products has put
Patanjali Ayurved ahead of other FMCG MNCs, including Oral B, Marico and Dabur.

In fact, CLSA says Patanjali is the fastest growing fast-moving consumer company in
India, valued at Rs 13, 000 crore (US$1.9 billion).
3. Backed by Herbal Toothpaste Vedshakti, Colgate Poised to Compete with
Patanjalis Dant Kanti

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India: It has been almost 80 years after Colgate-Palmolive entered India, the oral care giant is launching an
India-focused brand as a result of threat posed by Patanjali Ayurved. Colgate is poised to launch a toothpaste
under the Cibaca sub-brand named Cibaca toothpaste. Though Colgate has been selling herbal variant such as
clove & neem in the country, this new product is the first indigenous brand in ayurvedic segment for the USD16
billion global giant controlling more than half the oral care market in India.

The new product is positioned as a toothpaste packed with the goodness of natural ingredients to help keep
dental problems away. Last quarter, the Indian unit of Colgate, responded to this by revitalizing Active Salt Neem
and launching Clove toothpaste. This unit has a small presence in this segment and their products have a
combined share of more than 7% of the overall toothpaste market now. However, Patanjali has objected to the
new name saying it is not appropriate and suggesting names like Ayush or Jadibooti should be used.

Although Patanjalis oral care market share is pegged at nearly 2% last year as compared to Colgate which still
dominates at 55%, even after losing 1.5% in market share. As Patanjali has grown to a USD 0.77 billion company
in less than a decade, other MNCs have shifted their focus to Ayurveda too. HUL has relaunched Ayush and
acquired Indulekha while LOreal launched a hair care range under Garnier Ultra Blends made with natural
ingredients.

According to TechSci Research, despite of being a late mover, Colgate is expected to fight back against local
competition. Colgate has global experience in natural segment and has acquired Toms of Maine in the US last
decade and even Colgate Mishvak is present in Turkey, Indonesia and elsewhere. Colgate also has a wider
reach, having access to more than 5 million stores as compared to Patanjalis products in 0.2 million traditional
retail outlets.

According to a recently published report by TechSci Research, India Oral Care Products Market By Product
Type, Competition Forecast and Opportunities, 2011 2021 , the oral care products market in India is
projected to grow at a CAGR of over 6% during 2016 2021. On the basis of product type, the market has been
segmented into five categories, which include toothpaste, toothbrush, mouthwash, tooth powder and other oral
care products. Among these categories, toothpaste segment dominated the countrys oral care products market
in 2015, and the segment is anticipated to maintain its dominance over the next five years as well. Few of the
leading players operating in the India oral care products market include Colgate-Palmolive (India) Ltd., Hindustan
Unilever Limited, Dabur India Limited and Patanjali Ayurved.
4. Patanjali tries to call Colgate's 'bluff' in new ad feat. Baba Ramdev

Baba Ramdev makes a case for his toothpaste brand by taking a dig at
Colgate -- through a new ad and a recent tweet. A look at Colgate Cibaca
Vedshakti Vs Patanjali Dantkanti.

A tweet by Patanjali's Baba Ramdev went viral on social media a couple of days back.
Written, perhaps, in anticipation of the launch of Colgate's new all-herbal and
indigenous toothpaste 'Colgate Cibaca Vedshakti', it read: "Colgate used to warn against
Indian traditional ways of using salt and coal on teeth. But now, it actively endorses it".

Substantiating his tweet was a collage of an old Colgate toothpaste ad (1985) carrying
the above 'warning' against salt and coal, as well as new ones in which model and actor
Lara Dutta can be seen endorsing Colgate's Active Salt and Colgate Total Charcoal Deep
Clean toothpaste brands.

Colgate used to warn against Indian traditional ways of using salt & coal on teeth. But
now they actively endorse it pic.twitter.com/eYywXQpK4P

Swami Ramdev (@yogrishiramdev) August 20, 2016

While Patanjali Ayurved's annual revenues of Rs 2,000 (FY '15) crore and Rs 5,000 crore (FY '16) are
numbers that need to be put in perspective for a layman, the success of its toothpaste brand
Dantkanti can be gauged by the fact that an established brand such as Colgate, the market leader in
the toothpaste segment with over 50 per cent share, has stepped up its game, and is in for an image
overhaul.

It appears as though Colgate Palmolive India is feeling the heat of the 'natural'
revolution ushered in by Patanjali Ayurved. The personal and oral care giant has
launched a new all-herbal and indigenous toothpaste under the Cibaca brand, arguably
to fend off competition by Patanjali Dantkanti. With clove, basil, lemon, camphor,
Eucalyptus and Thymol, the product not only has a formulation very Indian, but also
quite an Indian name -- 'Colgate Cibaca Vedshakti'.
Without losing much time, Colgate also came up with a print ad for Vedshakti which
appeared in Rajasthan Patrika last Monday. The tagline was 'Kudrat Ka Saath, Swastha
Aur Surakshit Daant'.

The new product is priced at Rs 50 for a 175 gm pack, almost 30 per cent cheaper than
Patanjali Dantkanti (Regular), which is available in 100 gm packs of Rs 40, and Rs 75
for the 200 gm pack -- a clear reason for Patanjali to be perturbed.

Although such flip-flop in strategy on the part of multinational companies trying to


model their offerings based on the preferences and cultural sensibilities of different
markets is not a novel phenomenon, Patanjali's passionate 'no-fee brand ambassador'
Baba Ramdev seems to be quite unhappy about it. In fact, he is not only calling out
'bluff' on a personal medium such as Twitter, but the brand is also running an ad
campaign for Dantkanti Advanced on television.
The TVC, created by Patanjali's agency Vermillion Communications accuses "toothpaste
selling multinational corporations" of once perpetrating fear about natural products by
dubbing their use as harmful and an uncivilised practice. The ad appeals to consumers
to not fall for their gimmicks and "emotional blackmailing" in the name of salt, tulsi,
and charcoal variants, but instead, choose Dantkanti Advanced.

The use of red and blue dummy packs in the ad is a clear allusion to Colgate, as is the
mention of tulsi (Basil), which is one of the ingredients in Colgate Cibaca Vedshakti.

Well, this is not the first time Colgate has been accused of such gimmicks. The brand
also drew flak on social media when it launched Colgate Total Charcoal Deep Clean last
year with brand ambassador (Lara) Dutta. People cited an old Colgate TVC in which the
brand had claimed that charcoal and similar abrasive products can damage tooth
enamel.
While neither the above TVC, nor the 1985 print ad that Baba Ramdev tweeted are
available for reference, the generation that grew up watching Doordarshan during the
1980s will surely remember the Colgate ad, in which a woman taunts her bodybuilder
brother-in-law with 'Arre wah Devarji, badan ke liye doodh-badaam, aur daaton ke liye
koyla?' when he asks her to get some almond milk and charcoal (koyla).
The situation is similar this time as well, and Colgate is fielding the unpleasant question
with the response in the picture below.
According to a report by ICICI Securities, Patanjali's entry has disrupted the toothpaste
category in India, denting Colgate's market share by approximately 150 basis points
from 57.2 per cent in 2015 to 55.7 per cent in March 2016. However, a second report by
Edelweiss Securities points out that other herbal player Dabur could also have
contributed to the decline. When Colgate's volume growth had slowed down to a low
single digit, Dabur's oral care portfolio was clocking double digit growth, it said.
The above findings are also corroborated by Nielsen's analysis across five prominent
personal care categories which indicate that the natural segment now constitutes about
a third of total sales, and is growing at 2.5 times of non-naturals in India. Vijay Udasi,
senior vice president, Nielsen India, shares, "Consumer packaged goods offering basic
natural proposition are performing well in the Indian market. Local companies of
Indian origin are growing in double digits and are fueling the growth of the segment in
the country.Global brands that contribute to 20 per cent of the natural segment are
growing in low single digits."

It was to fend off this competition in the natural segment that Colgate introduced
Colgate Sensitive Clove and Colgate Cibaca Vedshakti, the latter being targetted at the
masses.
Harish Bijoor, brand expert and CEO, Harish Bijoor Consults Inc., a brand consultancy,
calls Colgate's strategy to go completely herbal under the Cibaca brand a good one.
"Cibaca and Binaca are two oral care brands that Indians have grown up with," he says.

Cibaca, the Indian oral hygiene brand, was originally owned by Ciba Geigy. It was
bought by Colgate in 1994, and re-launched as the All New Cibaca Top in 2000. The
brand is strong in rural India.

As per the report by ICICI Securities, the rural population accounts for approximately
35 per cent toothpaste revenue for Colgate Palmolive India. However, there is still huge
opportunity for brands in rural markets where overall toothpaste penetration stood at
just 74.1 per cent in 2014, as opposed to 92.3 per cent the same year in urban India.

Further, various reports peg Patanjali's market share at 4.5-5 per cent and Colgate's
share in the natural segment, where it is present with Colgate Active Salt, Active Salt
Neem, and Active Salt Healthy White Toothpaste, at 7 per cent. The competition is
pretty close.

Patanjali's Dantkanti claims to have generated business worth Rs 450 crore in the last
fiscal (FY '15-'16). Currently, four variants, namely, Dantkanti Regular (13 herbs),
Dantkanti Advanced (26 herbs), Patanjali Medicated Gel, and Patanjali Junior are
available in the market in three lakh outlets, informs S K Gupta Tijarawala, Patanjali
spokesperson and CEO, Combine Advertising.

Experts believe that given its strong brand equity and a formidable distribution network
covering over five million outlets, Colgate will have an edge over Patanjali. With Cibaca
Vedshakti, it may even win the price war.
Rajeev Sharma, CEO, Ormax Rhodium, and ex-national head of planning and strategy
at Leo Burnett, has a piece of advice for Patanjali.

Sharma believes that Baba Ramdev has brought a credible and popular voice of
authority to the ayurvedic segment for the first time, thus fuelling its growth.

But, while commenting on the brand's strategy, he points, "The MNC bashing that
Patanjali has indulged in, is good for a few market share points, but this merely
scratches the surface of what it can be. Sooner than later, Patanjali will realise that for
the larger market, there is a bigger issue as far as the consumer is concerned. It is the
wall of scepticism that traditional or ayurvedic dental products have to scale to be a truly
dominant force."

According to Sharma, as a brand that has momentum on its side and a long-term
interest in the growth of Ayurveda, it's time Patanjali found a higher ground.
5. Colgate Cibaca Vedshakti - Herbal Toothpaste Market

Strong Brand Power = Market influence, Threat & Coverage, Connect Consumers, Gain
Trust, building brand identity & equity

Total Toothpaste market in India :- 7500 Crore

Total Herbal/Ayurvedic Toothpaste market :- 800 Crore (11% Appx.)

Ayurvedic Impact, Brand Reflect & React:

Its only sole brand Patanjali is influencing that Colgate has launched 3 brands straight
away within 1 year which are known as Colgate Sensitive Clove, Colgate Active Salt with
Neem & Colgate Cibaca Vedshakti.

Overall, Herbal market is growing now & MNC are foraying with herbal brand in order to
compete with Patanjali. Moreover, they are releasing their campaign by using of
Ayurvedic elements or conveying message by using voice over/showing Ayurvedic or
Natural.

Now, it is most challengeable task for Colgate that how to sustain existing consumers because
Dant Kanti (Patanjali Brand) has already gain 3 % market from Colgate though Colgate is still
leading in the market with 54% according to the market source but overall growth of Colgate is
declining. The matter is that how will Colgate compete its 3 herbal toothpaste brands across the
market which is categorized into differently since Dant Kanti is growing successfully across the
Indian market.

Being a most trustable brand in toothpaste market, Colgate Strong Teeth has been
changed in its TVC campaign since 2 years & integrating it more on towards Mothers
Trust which ropes into sustaining the brand loyalty & legacy.

Dant Kanti brand effect is highly potential which I have been observed personally when I was
buying medicine from one medical store nearby my home. I have seen the display of total 15
Dant Kanti Toothpaste front side & highly visible directly, then again I have been visited the
same store after a week that surprisingly I found only 3 toothpaste was remaining in display
stock. I have been asked there the sales movement of Dant Kanti Toothpaste in retail market, as
he replied that it is very fast and consumers are demanding either by Patanjali Toothpaste or
some are directly with Dant Kanti while buying likewise Colgate.
Strategically a new brand Colgate Cibaca Vedshakti (Brand Extend of Colgate Cibaca) is
directly competing with Dant Kanti. The biggest threat for Colgate is to drive & gain
repeat consumers for 3 herbal toothpaste brands which is not easy to establish despite
of market leader. Since Colgate brand is most recognized as solution for cavity & now,
Colgate has required emphasizing more on herbal/Ayurvedic elements to drive the new
brands. The campaigns have not been influenced of Colgate Sensitive Clove & Active
Salt with Neem which can urge to consumers willingly for buying the same likewise Dant
Kanti. It must required to more exercise on it because other rival brands are working
aggressively and more new brands may foraying into herbal toothpaste market which
can give big impact on Colgate market coverage.