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Ayurveda in prominence as never before

Along with herbal products, Patanjali seems to have taken the sails off some of the traditional branded grocery products in the market (File photo)

Along with herbal products, Patanjali seems to have taken the sails off some of the traditional branded grocery products in the market (File photo)

by Nantoo Banerjee
Few will disagree that making a Rs.1,00,000-crore-plus branded fast moving consumer goods (FMCG) market, led largely by multinational companies and their associates, suddenly busk in the glory of nearly 5,000-year-old India’s own home-grown Ayurvedic formulae products is no joke.
A Yoga-guru-turned-marketing-mahaguru from Haridwar, Baba Ramdev, has not only made it happen in just about 10 years, but, in the process, has put some of India’s 100-plus-year-old MNC brands and their associates such as Hindustan Unilever, Procter & Gamble, Nestle, Glaxosmithkline, Horlicks, L’Oreal, Colgate, ITC, etc, at their wit’s end about how to fight the Baba’s Patanjali onslaught in the market. The name, Patanjali, an ancient Rishi, as described by Paramhansa Yogananda in his ‘Autobiography of a Yogi,’ defined ‘yoga’ as a process to ‘control the fluctuations of the mind-stuff’. The word Ayurveda combines two Sanskrit words — Aayush and Veda. In english, Aayush means life and Veda is knowledge. Thus, Ayurveda means ‘knowledge of life’.
Seemingly, Ayurveda may have little to do with some of Ramdev’s so-called Patanjali herbal products — from Marie and Digestive biscuits to a host of cooking aids, Rice, atta, mustard oil and cosmetic products such as face wash. Never mind that. The modern yoga guru is going strong with newer and newer FMCG products under the Patanjali belt that is targeted to reach a Rs.20,000-crore plus business within the next four years.
Patanjali is posing a threat to MNCs not only in India but also in other countries with large Indian or Indian-origin population where the Indian brand has already made an inroad. According to the latest UN survey on international migrant trends, India’s diaspora population is the largest in the world with 16 million of them living outside their country in 2015. Patanjali finds a great export opportunity in some of those countries.
Patanjali seems to be focussing more on FMCG products than initial Ayurvedic medicines, which face intense competition from other big local firms such as Dabur, Baidyanath, Himalaya, Hamdard, Emami, Zandu, Charak, Vicco, Surya Herbal and Arya Vaidyashala of Kotakkal (Kerala). The annual turnover of India’s branded Ayurvedic drug and cosmetics industry is not very large. It is said to be only around Rs.5,000 crore. Exports account for nearly Rs.500 crore. However, multi-product Patanjali is said to have already crossed Rs 10,000 crore sales in last fiscal. Processed food products may have largely contributed to such a massive turnover. The company is now having global ambitions.
Recently, Patanjali Ayurved managing director Acharaya Balkrishna said the FMCG major is looking to double its share in the country’s food processing market in the current fiscal. The company plans to invest Rs 5,000 crore on expansion of its various verticals. It would be putting aside a substantial portion of funds to open new units and ramp up existing capacity. Patanjali plans to set up as many as five mega food parks, including one in Madhya Pradesh and another in Maharashtra, both ruled by Bharatiya Janta Party, with which the Baba enjoys a special relation. The Ramdev company also has plans to grow medicinal herbs in a big way for dual use, medicines and modern beauty treat. Alongside aloe vera and amla, Patanjali wants to produce a host of herbs such as Tulsi and Ashwagandha. For instance, the company plans to sell 100 tonnes of aloe vera juice per day, up from 40-50 tonnes, currently. The list of Patanjali products is long, covering some 800 items. No other FMCG firm is known to have such a large number of products.
Patanjali seems to have taken the sails off some of the traditional and well-entrenched branded grocery and processed food products in the market, which are faced with low sales growth and even lower sales margin in the face of growing competition. Patanjali, whose grocery, processed food products and cosmetics are cheaper than MNC brands, is certainly giving the established players in the business a big competition. Going forward, there is nothing to believe that Patanjali will continue to have a free run for long in the crowded FMCG market led by some of the old big-pocket multinational and domestic tsars.
Questions are also being raised about Patanjali’s sources of funds to sustain and grow such a large operation, so fast. In just 10 years time, Patanjali has given competitors like Hindustan Unilever, Emami, Godrej Consumer, Colgate and several others, a run for their money. According to reports, the company has, so far, been taking short term loans to meet its working capital needs. In the past, public sector banks like Punjab National Bank and SBI have lent credit to the company.
While brand Patanjali’s meteoric rise is expected to interest market researchers and faculties in leading management institutes, the company itself may have to revisit its growth strategies in the face of no-holds-barred competition from established entities, which may leave no stone unturned to put hurdles to its business ambition.
An unfavourable test report by the Central Food Lab in Kolkata has led the defence canteen stores department (CSD) to recently suspend sales of Patanjali’s Amla juice. In a letter dated April 3, the CSD is said to have asked all its retailing depots to make debit notes for their current stock of the product so that it can be returned to the company. Incidentally, the same lab in Kolkata had detected high lead levels in Nestle’s Maggi noodles samples two years ago, that led Nestle to temporarily withdraw the brand across India.
It is not the first time that the Ramdev company is locking horns with the regulators. It has been questioned for selling noodles and pasta without the requisite licences, and had faced flak from the food regulator, FSSAI, over the allegedly misleading advertisements for its edible-oil products. Hopefully, Patanjali will soon learn how to overcome such business obstacles to maintain its growth and focus on the market. (-IPA)


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