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Founders Smiling at Success of All-Natural Toothpaste Firm

October 05, 1994|From Reuters

KENNEBUNK, Maine — In the 1960s, it was parsley, sage, rosemary and thyme. Today, it's cinnamon, sage, lemongrass and fennel-toothpaste.

It comes from Tom's of Maine, the tiny company biting into larger corporations' market share of the $1.5-billion toothpaste industry.

The reason, say the company and analysts: a winning combination, especially for Baby Boomer customers, of all-natural products and the firm's donations to environmental and social justice causes.

"Who says capitalism must be as it's been practiced?" co-founder and president Tom Chappell told Reuters.

Many natural products never make it out of health food stores, too esoteric for average consumers. Thanks to aggressive marketing, Tom's, based in Kennebunk, Maine, started wiggling its way onto drugstore and supermarket shelves alongside Colgate, Crest and other "normal" pastes.

Twenty-five years and a billion tubes after it was launched during the "Age of Aquarius," the flower child of toothpastes sells $10 million to $12 million annually, the vast majority of Tom's total sales of $15 million to $20 million. Its 250 all-natural products include shampoo, deodorant and mouthwash.

Nationally, Tom's has grabbed a 0.7% market share away from more established competitors like Proctor & Gamble. In major markets such as New York, Boston and the Rockies, the company claims the share is between 2% and 4%.

Long-haired, folk-singing Chappell and wife Kate founded the company in 1970 to put a non-phosphate detergent on the market. But they found their herbal toothpaste--first made in old milk pasteurizing cans and today in a one-room "factory"--a better seller.

With Tom's healthy recipe--no additives, dyes or sugars--consumers also get conscience. No animal products are used or testing on animals is done. And Tom's gives 10% of pretax profits to groups such as the Rainforest Alliance.

"I'm a capitalist. I'm a product of a capitalist society," said the former employee benefits counselor for Aetna Life Insurance. "But I want to make capitalism accountable to its communities, people and environment." The company grew 20% to 30% annually between 1988 and 1993 before hitting a snag last year. The firm, trying to stay within its "no animals" creed by replacing petroleum with vegetable glycerin in its deodorants, was forced to recall the product because it was found to be ineffective.

Chappell says the company is rebounding with a national supermarket campaign and new products, including a line of bar soap in 1995.

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