Colgate will buy Tom's of Maine $100m deal may help boost sales of leader in natural products niche By Chris Reidy, Globe Staff | March 22, 2006
Tom's of Maine -- a niche brand whose renown as a socially responsible maker of natural products exceeds its market share -- is selling itself to Colgate-Palmolive Co. for about $100 million, the company said yesterday.
Best known for toothpaste, Tom's of Maine got its start in 1970 by making a phosphate-free laundry detergent. Over the years, cofounder Tom Chappell, 63, poked fun at major brands like Colgate, saying they put artificial additives in their toothpastes while Tom's of Maine used natural ingredients.
Chappell said he will continue to run the brand from its Kennebunk headquarters. None of the privately held firm's approximately 170 jobs will be lost, he said.
''We'll be a stand-alone subsidiary," said Chappell. ''And we have a commitment from Colgate that our formulas will not be tampered with.
Colgate-Palmolive of New York plans to keep the Tom's of Maine brand name and hopes to use its significant distribution network and marketing muscle to boost sales. With annual revenue of nearly $50 million, Tom's of Maine said it can grow faster with Colgate in what Colgate estimates is a fast-growing $3 billion US market for natural oral-care and personal products.
''People are more and more concerned about what's going in and on their bodies," said Bruce Cohen, a strategist in the San Francisco office of the consulting firm Kurt Salmon Associates.
''Tom's has been around for a long time and they have very passionate employees and very passionate consumers. People who use Tom's products use all of Tom's products -- the toothpaste, the deodorant, and facial products. And they're evangelical about it. You can't say that about Colgate toothpaste."
Other New England companies that focus on natural ingredients have also sold to bigger players in recent years. The list includes ice cream's Ben & Jerry's (Unilever PLC); Nantucket Nectars of Juice Guys fame (ultimately bought by Cadbury Schweppes); and Stonyfield Farm yogurt (Groupe Danone, a French company known for its Dannon brand yogurt).
While entrepreneurs at these kinds of companies do financially well for themselves while running them, they can reap bigger returns by selling their firms.
''At some point, some of these guys just might want to buy a small island off the coast of Belize," said Tobe Berkovitz, an associate dean at Boston University's School of Communication.
Cofounders Tom and Kate Chappell said the decision to sell to Colgate was partly about broadening Tom's of Maine's reach.
''We chose Colgate as our partner because they have the global expertise to help take Tom's of Maine to the next level," they said in a statement. ''We see Colgate as an excellent fit with our cultural values." Those values include a policy of giving 10 percent of pretax profits to community groups that benefit the environment and other causes.
During a telephone interview, Kate Chappell, 60, offered another reason to sell:
''We're not going to be here forever, and we needed to find a good home for the company."
The combination of Colgate, the global leader in oral care, and Tom's of Maine, the leader in the natural oral-care category, represents ''growth opportunities for both companies," Colgate chief executive Reuben Mark said in a statement.
Natural toothpaste currently makes up only a small fraction of what US consumers spend on toothpaste each year.
Still, it's important for Colgate to preserve the distinctiveness of a brand that found favor with local consumers, said chief executive Fran Kelly of the Boston advertising agency Arnold US.
''Tom's has a northern New England, down-to-earth sensibility, and people like things that are unique and genuine," Kelly said. ''The challenge for Colgate is to keep Tom's uniqueness and quirkiness alive."
Colgate won't put its name on Tom's of Maine products, Tom Chappell said. And that strikes Berkovitz as a smart move. ''You try to keep it stealthy," Berkovitz said of a buyer's strategy after buying a beloved regional company. ''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."
Colgate plans to buy 84 percent of Tom's of Maine. The Chappell family will retain the rest. The sale is expected to close in the second quarter.
Chris Reidy can be reached at email@example.com. Globe staff writer Jenn Abelson contributed to this report.
At the Quintessence restaurant in New York, health-conscious diners munch on burgers, burritos, mini-pizzas and three-layer "mud slide" pie. Far from being greasy-spoon cuisine, these versions of American staples are free of animal products — and not one ingredient is cooked.
The restaurant, with three Manhattan locations that have sprouted up in the past few years, is one sign of the movement known as raw foodism. Typically, going raw means eating nothing but uncooked, organic, vegan fare — raw vegetables, fruits, nuts, seeds, grains and sprouts. The "cheese" on a raw pizza is likely to be a concoction based on ground nuts.
The raw philosophy boils down to this: Heating food beyond 118 degrees robs it of most vitamins, minerals and enzymes. In contrast, say advocates, eating foods in their natural form makes all the nutrients available to the body.
Cooking up a storm For proponents, swapping the stove for a juicer and "sprouter" means trading in heartburn, constipation and a host of other ills for a long life of good health and youthful looks.
Long-time raw-fooder Nancy Valdes, of New York, says for her, the diet banished constipation and gas. Valdes, who has been eating raw since she was 17, says people never believe her when she tells them she's 41 — a youthful appearance she attributes to the quality of her diet. She also says that since going raw, she has been rid of her "childhood diseases," such as rashes and bronchitis.
Dr. Doug Graham, an author and health consultant whose clients include world-class athletes, advocates a low-fat, raw, vegan diet, with fresh fruits and vegetables as the prime food source.
With cooking, says Graham, "vitamins and minerals lose their viability," and proteins form enzyme-resistant bonds that hinder the body's digestive enzymes from breaking them down.
Dr. Richard DeAndrea is co-founder of 21 Day Detox, a California-based program that uses raw food as part of a three-week workshop he says helps people clear their bodies of the toxins their usual lifestyle unloads.
Most workshop attendees eventually let some hot foods back into their lives. But that's not viewed as a lapse, as DeAndrea says that people who go 50-percent raw are likely to see "major health benefits."
However, other nutrition specialists express doubts about some tenets of raw foodism. Although cooking does diminish the nutrients in many — but not all — types of produce, there's disagreement on the consequences.
The fact that cooking changes a food's composition does not mean it has been stripped of its health benefits, says Claudia Gonzalez, a Miami-based registered dietitian who conducted a review of the raw-food diet for the American Dietetic Association.
Although she points out that raw foodists clearly get the fiber and other nutrients the typical American lacks, Gonzalez worries that they risk nutritional deficiencies because the diet may be too low in calories and nutrients like vitamins D and B12, which are found in animal products.
And while it may be obvious that meat, milk and eggs are potentially dangerous raw, certain non-animal products may be best eaten cooked as well.
"I would not eat raw legumes," says Dr. Jeanne Freeland-Graves of The University of Texas at Austin, noting that some beans — such as kidney and fava beans — carry potentially toxic compounds when raw.
And she and others throw cold water on the common claim that leaving food raw allows its enzymes to take over the work of the body's own digestive enzymes.
"That's just not scientific," says Freeland-Graves.
Enzymes are complex proteins, and when we ingest food, she explains, whole proteins are quickly broken down into their component amino acids — so the body doesn't absorb intact enzymes. If it did, she notes, the immune system would launch an attack.
The enzyme claim by many raw foodists is "completely false," says Graham, noting that "we fight that (notion) at every turn."
Digesting the pros and cons Enzyme issues aside, Dr. Lee M. Kaplan, director of the MGH Weight Center at Massachusetts General Hospital in Boston, points to the lack of scientific evidence that raw food fights disease, as many proponents claim.
The fact that a person's heartburn dissipates after he goes raw does not mean that cooking was the problem all along, says Kaplan, a spokesman for the American Gastroenterological Association. For example, he explains, the heartburn relief could have come from the elimination of chocolate, or any other food known to promote acid reflux.
Kaplan says he is not against going raw, but his advice is to concentrate on replacing highly processed foods with fruits, vegetables and whole grains, heated or not.
For his part, Graham, a raw fooder for 26 years, believes that a totally raw diet achieves "optimal" health, but he says that simply eating more fruits and vegetables is "a step in the right direction."
DeAndrea concedes that all-raw may not work for all people, since "everyone's constitution is different." He says the bottom line is that most Americans should eat fewer animal products and more plant-based fare.
"A person should try to eat more whole foods," DeAndrea says, adding, "If going raw is what does that for them, then it's probably a good thing."
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