Colgate goes "natural"
Not long ago, in a nearby CVS pharmacy, I was thinking about Tom's of Maine. The company is best known for its "all natural" toothpaste. As I surveyed the scores of varieties of Colgate and Crest, I wondered why there was no room for this original product. Has it been relegated to health food stores or just hard to spot among the array of prominent competitors? Another example of the big guys crowding the little guys off the shelf, even when the little guys (In fact, the product is sold in CVS stores, according to The tom's web site, but I didn't find it.)
I was not surprised, then, to read the news that Tom's of Maine had sold out to big rival Colgate. Colgate-Palmolive paid $100 million for an 84% share of the privately-held company, that is, in fact, located in Maine. It's a tiny deal compared to Procter & Gamble's purchase of Gillette, or even Colgate's $600 million purchase of Swiss oral care firm GABA in 2003.
But the purchase follows a familiar pattern. Colgate gets the credit for associating with natural products and ethical business practices (just like L'Oreal did with Body Shoppes and Danone did with Stonyfield Farms). It also gets an undersold product that it can get universally distributed in prominent shelf space with its marketing muscle, even in the CVS's and Wal-Marts. (Much as Dean Foods has put Silk soy milk and Horizon organic milk in most supermarkets.) That will allow it to claim more shelf space without just another clone of the base product. People who want to rebel a bit against corporate America can buy this "hippie," alternative product and feel good about helping the little guy. (Here the analogy is to Unilever's Ben & Jerry's ice cream.)
As one analyst is quoted as saying in a Boston Globe article ("Colgate will buy Tom's of Maine", 3/22/06)
You try to keep it stealthy….'I think the average person in a store thinks that Ben & Jerry's ice cream is still being mixed by two guys in a Vermont barn.
Aside from Toothpaste, Tom's of Maine has some 50 products, including deodorant, soap, shaving cream, and mouthwash. Colgate, significantly enough, will not identify itself as the owner of the company. Its founder, the eponymous Tom, has been a major critic of competitors like Colgate and the sugary formulation they sell for dental care.
