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FMCG companies race after Patanjali’s herbal products

business Updated: Jan 03, 2017 10:54 IST
Nachiket Kelkar
FMCG companies

Baba Ramdev and Acharya Balkrishna display Patanjali products. (Hindustan Times)

The battle for shelf space in the FMCG segment is expected to intensify this year as Patanjali’s rivals , led by Hindustan Unilever, are aggressively launching products.

Patanjali has disrupted the market in the last couple of years, pushing its herbal products.

Baba Ramdev’s Patanjali Ayurved remains confident of doubling its revenue to ₹10,000 crore for the year ending March 31, even as other companies have seen growth slow down due to demonetisation.

In race to grab market share, HUL, the largest FMCG firm in India, has already outlined plans to launch nearly two dozen products based on herbal ingredients.

The company, which had revived its Ayush brand last year, has created a range of products with Arya Vaidya Pharmacy across hair care, skin care, oral care and personal wash (soaps).

These 20 products are being launched in stores across the south Indian states of Karnataka, Kerala, Tamil Nadu, Andhra Pradesh, and Telangana.

“The new range of Lever Ayush brings 5,000 years of Ayurvedic wisdom to solve modern lifestyle problems. The products are designed to attract and retain such consumers with high-quality Ayurveda-based offerings,” a company spokesperson said.

The company acquired ayurvedic hair oil brand Indulekha from Mosons Group last year, which it is rapidly expanding across markets.

Other domestic and multinational FMCG firms, too, have been aggressively entering the herbals space. Godrej Consumer Products, for instance, plans to launch herbal variants across product categories, according to market sources.

It has already launched neem-based household insecticides and a toilet soap variant with neem and coconut oil.

France’s L’Oreal launched the Ultra Blends natural shampoos last year and Colgate Palmolive is aggressively pushing oral care products with charcoal, salt, neem and cloves.

Even Emami has been rapidly scaling up its portfolio in the healthcare space under its Zandu arm, where it is aiming to “grow aggressively”.

The Indian herbal products market that is estimated to be around $6.4 billion in 2016 may grow to $7.6 billion by 2020, according to a FICCI-PWC study.

“The segment is growing at almost twice the rate of the overall FMCG market,” said Kaustubh Pawaskar, analyst at Sharekhan.

Patanjali, too, is not sitting idle, and has drawn up a ₹5,000 crore capital expenditure plan for 2017-18.

“We are doing lot of studies on new herbal formulations,” said spokesperson SK Tijarawala.