26 Oct 2016 14:55 IST

Swadeshi mantra works wonders for Patanjali

The low-price warrior is winning turf on retail shelves by appealing to desi 'made in India' sentiments

Come Diwali, stores will be flooded with yet another product from Baba Ramdev’s Patanjali stable. The indefatigable yoga guru, who has gone against the grain of conventional FMCG wisdom, will launch 18 variants of rice at one go – from basmati to sona masuri to pusa to brown rice – and now wants to disrupt the rice category.

The way new products keep tumbling out of Patanjali’s portfolio at lightening speed, you would be mistaken for thinking that Kamadhenu, the mythical cow of plenty, resides at the sprawling Patanjali Yogpeeth – from where Acharya Balkrishna, Ramdev’s closest aide, masterminds every move of this brand.

But Patanjali had been setting the stage for its rice push for months. Earlier this year, it acquired RH Agro, a Sonepat-based rice mill with 1 lakh tonne capacity, and entered into joint ventures with four other mills and a leasing agreement with a mill in Punjab.

Similarly, it is readying itself for a mega onslaught on the dairy sector with a ₹500-crore infusion into its gaushalas for a cow breed improvement programme. On the anvil are a slew of dairy products that will join Patanjali skimmed milk powder and ghee on retail shelves soon. In Maharashatra, it has acquired 230 acres at Mihan near Nagpur for a herbal food park, plus another 60 acres nearby for a big manufacturing impetus. From Haridwar to Assam to the South, Patanjali is spreading its manufacturing footprint far and wide.

The company that started just 10 years ago already has 525 products on retail shelves. And that’s only in four categories: Natural Foods, Natural Cosmetics, Home Care and Natural Beverages. When it comes out with its textiles (coat se langot , denim to dhoti) offerings soon, expect it to zoom past the 1,000-products mark.

A marketplace of over ₹2 lakh crore, FMCG is a very big arena. Within this, there are little sultanates that different players lord over; HUL leads in personal care, Nestle in infant nutrition, Colgate in Oral care, Britannia in biscuits, and so on. These fiefdoms have mostly been ruled by multinationals. Some years ago, when the tobacco-to-hotels behemoth ITC entered the FMCG arena, it declared it wanted not just a slice of the pie, but all of it, by being part of a consumer’s life from morning till night. With its Made-in-India agenda, ITC set itself a goal of ₹1 lakh crore of non-cigarette FMCG revenues by 2030.

But a nimble yoga guru and his rather rustic-looking products have quite stolen sophisticated ITC’s lines and thunder with their swadeshi success story and the intention to be all things to all people. “From biofertilisers to healthy food to personal care to organic cotton clothes, we will produce anything that can make India and Indians beautiful,” declares Acharya Balkrishna, giving voice to Patanjali’s mega ambitions. From its beginnings on the lines of a cottage industry to achieving a turnover of ₹5,200 crore in 2015-16, Patanjali’s has been an exponential growth story; Baba Ramdev is now talking of ₹50,000 crore by 2020.

Health is wealth

When Patanjali started pushing out FMCG products, it wasn’t taken seriously – because it did not at first tread on any giant’s toes. It started with gooseberry juice, aloe vera juice, dalia and such other products. But in next to no time, it was taking on Nestle with its noodles, Britannia with biscuits, Dabur with its honey, HUL with its personal care range and so on.

Patanjali’s communication has always focussed on health. “We simply speak about the goodness of our products, highlight hazards in the products in the market and why we are a better alternative,” says a key spokesperson of the group. The communication also plays up the benefits of consuming desi products. For instance, it puts out ads about why a made-in-India kachhi ghani mustard oil scores over a Western refined oil. Recent ads have all gone to town ranting about Chinese products.

“Swadeshi is our goal,” says Ramdev, adding in the next breath that “ hum kamai nahin, bhalai kar rahe hain; vyapar nahin, upkaar ” (We are not doing this for profits, but for good deeds).

The disruption

The sheer scale and audacity of Ramdev’s dreams would daunt a feebler mind. But he and Balakrishna point to a secret weapon they have that no MNC player can boast of: an army of devoted followers of his yoga programmes, who spread the good word. “Over 100 crore Indians know me by name or face,” declares Ramdev.

Other than the swadeshi label, Patanjali succeeds on the strength of its affordable prices. Other than a few exceptions such as Cow’s Ghee, most Patanjali products are priced far lower than their competitors.

Giraj Sharma, who runs the brand consultancy Behind the Moon, feels the biggest disruption that Patanjali has done is its non-conventional distribution channel – shops in front of mandirs and so on, in such high numbers. “Others too had tried exclusive outlets, but didn’t penetrate as much,” he says. Patanjali has a network of 10,000 Aarogya Kendras run by Patanjali Chikitsalaya. In addition, it covers the length and breadth of India through a network of 10 lakh kirana stores (by Diwali). It also has a presence on modern trade shelves, having struck deals with Future Group for special displays.

Baba Ramdev’s Patanjali has also made spectacular inroads at the grassroots levels. According to his team, Patanjali touches 6,38,735 villages across 600 districts through five in-house organisations: Patanjali Yoga Samiti, Bharat Swabhiman, Yuva Bharat, Patanjali Mahila Yoga Samiti and Kisan Seva Samiti. “We have 4,500 distributors at the tehsil level,” says a spokesperson.

The challenges

Despite its phenomenal success, experts feel Patanjali faces a lot of challenges. The biggest is: what after Baba Ramdev?

Although he is just 50 years old, with a long innings ahead, the Patanjali brand rides excessively on the Baba’s charisma.

The advertisements all carry his images and messages, though Acharya Balkrishna too gets some play now.

The second, as Giraj Sharma points out, is the divided focus. “Patanjali wants to get into too many things. Such a diverse portfolio could dilute the brand,” he says.

Also, big FMCG players have not really started a price war yet. Many feel that as Patanjali starts hurting them, a discounting battle will begin.

But Baba Ramdev has the last word on that one. “That’s a good thing for consumers, isn’t it?” he asks. “If they discount, this will also be my public seva!”