Down 'n' Dental

Colgate is getting squeezed. Procter & Gamble, maker of archrival Crest toothpaste, is starting to see the results of an aggressive marketing campaign, including a massive jump in ad spends and primo placement on nbc's reality-TV show The Apprentice. One result: Colgate-Palmolive's toothpaste business, anchored in the eponymous brand, is losing market share. Though still the category leader in the U.S. and globally, Colgate has seen U.S. share slip, from 35.3% at the beginning of 2003 to 33.3% during the second quarter of this year, according to Smith Barney stock research. In September, Colgate said its second-half profits would be lower than expected, in part because it was stepping up its own ad spending. P&G has a heck of a head start. The company spent $202 million on toothpaste advertising last year in the U.S., a 76% increase over the year before, while Colgate spent one-third as much, $67 million, only 5% more than it spent in 2002. But Colgate's problems may not be so easily brushed away. P&G is also stealing market share in places like Mexico and China, and other companies, like Church & Dwight, which owns Mentadent toothpaste, are making inroads into the business too.