Colgate Buys In

I don't feel sorry for Mainers Tom and Kate Chappell, after all they now have a hundred million unhappiness soothers.  In fact I don't think they sold out.  I think Colgate bought in.  I've witnessed many times in my career large corporate buyers drawn to the light of a small craft product or technology thinking it will change their old, tired ways.  It never does.  Within a year Colgate will be pumping its toothpaste into TOM packages, within two sales will have plummeted and by year three the brand will be gone.  Colgate will be left with a bad taste in its mouth and a negative ROI.

Comments

[reader]

You underestimate the level-headedness and strength of Colgate Palmolive, especially since about 75% of operations are foreign. Colgate is in some countries, synonymous with toothpaste, and currently has the only toothpaste proven to fight against gingivitus (Total). They have other investments other than toothpaste and hygiene, like Hills Science Diet, although not all of these investments are in the US as they are in other countries. The thing about Colgate which is extremely important to note is that unlike many other large corporations, their commitment is to scientific research, not advertisement. Note the very little advertisements for Colgate compared to some rivals, like Procter & Gamble.

Your advice seems to be under the pretense that a Fortune 500, which has run strong for many many years, will fall for the "organic, all natural vibe" which will likely wear off within the next decade as the generations pass through. But, this is not sensible, especially when the company focuses more on quality than advertising. Their name is trusted, and for many good reasons. "Tom's", in comparison, is nothing, especially when in a global perspective.

Colgate is not looking for gimmicks. It has never done so, and it has no need to do so. It does not have "old, tired ways" any more than it ever did, especially when interpreting "old and tired" as continued slow and reliable growth.

[John]

Your post intrigues and depresses me. I love Tom's products, so I hope you're wrong. Surely Colgate is not counting on Tom's to remake it entirely? Isn't this just a foray into an attractive, complementary market, leveraging Colgate marketing and distibution muscle? And surely they understand what Tom's (niche) consumers like about the product and, having paid for it, would not jeopardize it? Or should we assume Colgate will not behave rationally?