Why Colgate's CEO acknowledges Patanjali's 'Ayurveda' effect

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Patanjali evolving into a Rs 10,000 crore giant in less than 10 years is proof of the shift in preference to Ayurvedic products.

Colgate India recorded a steep decline in shares and sales volume in 2016.

Mumbai: After recording a sharp 1.8 per cent fall in shares in 2017, India’s largest oral care brand Colgate Palmolive’s global CEO, Ian Cook, turned to look at Baba Ramdev’s Patanjali while stressing on the need to identify and respond to changing consumer preferences.

According to an article in Economic Times, Cook said that consumer trends tend to be “premium price oriented” and firms need to respond to them by specifically churning out products that meet those demands. He went on to give the example of Patanjali that answered the call of herbal, Ayurvedic products in India. “Patanjali in India takes a very nationalist view of its business,” Cook told investors on Friday.

Ramdev’s Patanjali evolving into a Rs 10,000 crore giant in less than 10 years is a proof of the shift in consumer preference to Ayurvedic products. The homegrown brand reportedly caused disruptions in the market.

Colgate India’s share in the Indian toothpaste market fell by 1.8 per cent in 2016 with sales volume falling 4 per cent. Colgate had a market share of 55.6 per cent in toothpaste and 47.3 per cent in the toothbrush category in 2016. Patanjali was able to challenge Colgate’s dominance while being present in only two lakh traditional retail stores as against the former’s presence in more than five million stores. 

Responding to the call of Ayurveda, Colgate in 2016 rolled out its first ayurvedic brand Cibaca Vedshakti, to compete with Patanjali's Dant Kanti toothpaste. “And in the end, the winner over time in these clashes are going to be the companies that best understand the consumer and serve them offerings that they want over time and of course that’s what we all resourced and focused on doing,” Cook said.

Domestic brands like Hindustan Unilever, Dabur also came out with their versions of ayurvedic personal care products. Such home-grown brands make up nearly 79 per cent of the personal care market in India.

According to a Nielsen study, “Consumers are drawn to Indian brands when it comes to naturals, under the assumption that manufacturers of these brands use ‘common kitchen ingredients’, making it safe for consumption and less likely to result in side effects or allergies”. 

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