20 Oct 2017 13:23 IST

Giving their business a natural shine

Patanjali’s rapid growth is forcing other FMCG firms to innovate quicker

Sri Sri Ayurveda, spiritual leader Sri Sri Ravi Shankar’s Art of Living Foundation’s fast moving consumer goods (FMCG) arm, has undertaken a rigorous branding and marketing exercise. Eager to roll out its products in 30 more countries in addition to the current 33, the company is expanding its line of home and personal care products and hopes to open 1,000 new stores to sell its many brands.

Multinational Hindustan Unilever has roped in star Akshay Kumar to endorse Ayurvedic personal care brand Lever Ayush.

The homegrown Dabur has teamed up with e-commerce giant Amazon to launch an online Ayurveda marketplace.

Ayurveda appears to be witnessing a resurgence in India, with new-age and legacy FMCG brands duelling in the marketplace.

“Ayurvedic products are getting back to the masses. Indian consumers had lost touch with it. In the case of FMCG, no brand was clearly focusing on the Ayurvedic potential. Patanjali helped bring it back to the mainstream with affordable pricing,” says Abneesh Roy, Senior Vice-President, Edelweiss Securities.

Pricing apart, healthier lifestyles and access to chemical-free products have become the new norm for Indian consumers, with Ayurveda gaining the upper hand.

Consumers have woken up to the possibilities of Ayurveda, as has been demonstrated by Patanjali’s success. With a revenue target of ₹20,000 crore for FY18, Patanjali Ayurved envisages growing at a swift 150 per cent CAGR over the next five years.

Roy says Patanjali has clocked a phenomenal 82 per cent revenue CAGR over FY12-16. New products, smart innovation, lower prices, Ayurvedic and natural propositions have lent its products an edge over competition.

Though the price-conscious Indian consumer “always had Ayurveda at the back of their mind, the connect was not there, since most products were unavailable,” says Roy. “By bringing a strong brand ambassador like Baba Ramdev to the forefront, confidence was brought back to the science of Ayurveda.” he adds.

So much so that legacy brands such as Dabur, Baidyanath, Zandu, Emami, Himalaya, Charak and Vicco, which have timidly been occupying shelf space with new-age disruptors, have decided to aggressively capitalise on their experience to cater to customers’ changing preferences. The market for Ayurvedic products is estimated at ₹50,000 crore.

Legacy brands

Brands are reinforcing advertising budgets and strengthening distribution. While Dabur India changed its slogan to ‘Science-based Ayurveda’ from ‘Celebrate life’, Chennai-based Cholayil Pvt Ltd, owner of Ayurvedic soap brand Medimix, decided to extend its flagship brand to other categories such as health care.

Pradeep Cholayil, Chairman and Managing Director, says the recent launch of Medimix Ayurvedic face wash with six essential herbs “was to reiterate that there is nothing better than natural.” The firm launched a high-decibel marketing blitz instead of falling back on time-tested marketing initiatives.

The company has been careful to evolve with its traditional base, not toss them overboard in search of a younger demographic. One of the company’s latest endeavours is to tap Tier 2 cities.

Emami too has been emphasising its Ayurvedic heritage. A spokesperson says their marketing, “coupled with a wide distribution network has enabled Emami to bring its various products under Zandu, BoroPlus, Navratna and the newly acquired Kesh King range to more people.”

Priti Sureka, Director, Emami, says Kesh King oil leads the market with a share of 34 per cent in the ₹725-crore Ayurvedic oil market.

Besides oil, the Kesh King portfolio comprises shampoo, conditioner and capsules. Its new ad campaign features brand ambassador Juhi Chawla.

The trend is global

Multinational brands too appear to have been affected.

“Indians are a captive audience, for the 5,000-year-old science of Ayurveda already exists here. Take a look at what Unilever has done with Ayush. They have a brilliant ad with Akshay Kumar, which is now piggybacking on the rejuvenation of Ayurveda,” says Edelweiss’ Roy. “Unilever is actually ignoring the MNC’s capability in its advertisement. What it’s doing is addressing the global naturals craze.” He adds that a similar connotation can be seen with L’Oreal, which launched a hair-care range under the Garnier Ultra Blends made with natural ingredients.

Toothpaste major Colgate-Palmolive India too has gone into “an Ayurvedic overdrive” with the launch of its Cibaca Vedshakti, and Colgate Swarna Vedshakti.

“Though there is Colgate Herbal, the company has strengthened its existing portfolio of naturals brand,” says Roy. The multinational has other products like Active Salt, Active Salt Neem and Sensitive Clove. Roy says the company premiumised its naturals positioning with the launch of Swarna Vedshakti. The trend to go natural, which is creating small waves in India, has taken its cue from the global stage, where naturals are creating a big storm, he adds.

“With more advertising on Ayurveda, growth across categories gets a fillip. Indian companies like Dabur and Emami are further benefited as consumer awareness grows, and behaviour preferences changes,” Roy adds.

Change was evident in Dabur launching new flavours of its oldest best-seller, Chyawanprash, in chocolate and mango flavours. Amla (Indian gooseberry), an integral element of traditional medicine, will soon be available as packaged juice under the Real brand.

Similarly, Hamdard is innovating and customising herbal products for younger consumers. Rooh Afza, which was available only in family-sized glass bottles, is now available in ready to-drink packs. The company is also aiming to extend its Safi brand into cosmetics, said an official.

A data driven report by TechSci Research noted that the Indian Ayurvedic products market is projected to register a CAGR of 16 per cent between 2016 and 2021, and is set to grow from the current $500 million to $1.1 billion by 2021.

A twist in the tale

Leveraging the ancient Indian tradition has become rather de riguer with legacy brands, albeit with a slight twist. Like Dabur, which decided to take its products to the US, Canada and Mexico with Amazon’s global selling programme.

Considering that Dabur earns more than 30 per cent of its revenue from international operations, the tie-up should work out well for them, says Roy. “Other players like Himalaya tend to get huge international revenues, which can be targeted by Dabur through Amazon,” he said.

Dabur has launched 30 products on Amazon. Within six months, the plan is to add 80. Dabur is set to benefit immensely from the shift towards herbal and Ayurvedic products, points out Roy. The online store will also offer insights into the medicinal properties of its products.

Just as the stoic Baidyanath Group has done with its revamped website, Allayurveda.com, which was started in 1998. An official says the company has been building and tracking a community of fitness conscious, new-age consumers. The Baidyanath Group’s current top-selling categories include digestive health, skin care, sexual wellness and hair care. Understanding the importance of technology, the brand has decided to use it extensively to provide curated content and consultation as well as sell their products on the website.

Jeevika Tyagi, CEO, Allayurveda.com, notes that as a brand “that believes in natural living, we strive to make the adoption of Ayurveda a simple and seamless experience.”

Sri Sri Tattva, Art of Living’s FMCG enterprise that has products such as Ojasvita, a herbal health drink, Sudanta, a herbal toothpaste, cookies, pure cow ghee, honey, and certified organic products and snacks, has inked an alliance with Franchise India to open 1,000 stores over the next two years.

Though a relative newbie, the company has posted 100 per cent growth year-on-year for the past two years. To ratchet up the marketing, it has teamed up with Madison Media for an estimated ₹100-crore media initiative. Dinesh Rathod, Chief Operating Officer of Madison Media Omega, says the company is keen to tap the growing Ayurveda segment.

The Bengaluru-based company’s Ojasvita drink is endorsed by Olympic silver medalist PV Sindhu and national badminton coach P Gopichand. Apart from India, it is present in Singapore, the US, Russia, Malaysia, Oman, Canada, South America and Brazil, to name a few.

While Patanjali has decided to set up units in the Nagpur SEZ to meet the growing requirement of Indians residing abroad, it has already set up units in Nepal and Bangladesh. Currently, its products are exported to the UK, the US, Canada and Mauritius.

(The article first appeared in The Hindu BusinessLine.)

Recommended for you