India’s toothpaste wars are getting spicy

Going back to the roots.
Going back to the roots.
Image: Reuters/Rupak De Chowdhuri
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First, it was charcoal, then salt. Now it is cardamom, mint, and even turmeric. With yoga guru Ramdev-led Patanjali’s “herbal” game being received well, other Indian toothpaste makers, including multinationals like Colgate and Hindustan Unilever (HUL), are wooing consumers with more and more traditional flavours.

And firms selling herbal or natural toothpaste are winning in India’s Rs10,000 crore ($1.57 billion) oral-care market, suggests a report by HDFC Securities released last month. “The oral care category has witnessed significant disruption owing to the success of Patanjali’s Dant Kanti,” the report says.

Colgate and HUL have lost market share over the last couple of years as Patanjali reshaped demand with its cheaper Ayurvedic products and nationalist rhetoric. Patanjali’s range of fast moving consumer good (FMCG) products has scaled a revenue of over Rs10,000 crore.

As a result, Ayurveda or herbal-based products now constitute about 20% of the total oral care market, as compared to zero even 10 years ago, the HDCF Securities report said, citing market data. And even though established players like Colgate and HUL have adapted to changing tastes, Patanjali and Dabur still sell four out of five herbal and Ayurvedic products in the oral care market.

Changing tastes aside, pricing may be a crucial factor in a nearly-saturated oral care market in urban India, where over 90% of houses use either a toothpaste or a tooth powder.

Patanjali’s hit toothpaste brand, Dant Kanti, costs Rs40 for a 100 gram tube, while similar products from Colgate and HUL cost anywhere between Rs55 and Rs100. While Colgate is still a market leader by many miles, its market share has dropped to 53% from 57.4% in 2015.

To make up ground, Colgate announced the launch of Cibaca Vedshakti in August 2016, while HUL rolled out its cardamom and rock-salt-based products under the Lever Ayush brand in August 2017.

“The herbal, Ayurvedic space is certainly growing ahead of all the other spaces. This is perhaps most pronounced in oral care,” Sunil Duggal, CEO of Dabur India, which sells the Red, Babool, and Meswak brands of toothpaste said in an investor call (pdf) on Oct. 31. Since oral care is a “therapeutic healthcare space, not a cosmetic personal care one…this is where Ayurvedic equities converge very well,” he added.

But even as multinationals buckle up, Indian companies have the early bird advantage in the spicy toothpaste wars.