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Patanjali’s thrust pushes FMCG rivals into ayurveda mode

Well-entrenched FMCG companies are having to rethink their strategy due to Patanjali Ayurved’s runwaya commercial success

business Updated: May 11, 2016 01:35 IST
Nachiket Kelkar
Nachiket Kelkar
Hindustan Times
Patanjali Ayurved patron and yoga guru Baba Ramdev shows the company’s FMCG and aurveda products at a press conference in New Delhi on April 26, 2016. Well-entrenched FMCG companies are having to rethink their strategy due to Patanjali’s commercial success(Hindustan Times file photo)

With Patanjali Ayurved growing aggressively in the fast moving consumer goods (FMCG)space, rivals Emami and Himalaya, with their own strong Ayurveda focus, are now planning to speed up their plans to enter new segments and expand distribution and retail reach across the country.

Baba Ramdev-promoted Patanjali, which reported `5,000 crore sales in the fiscal year ending March 2016 and has doubled its revenue within two years, has spurred even Hindustan Unilever, the largest consumer goods maker in the country, into taking action with CEO Sanjeev Mehta admitting that as HUL is under represented in ayurveda it needs to grow there.

“Naturals is a global phenomenon and not a trend playing out only in India. That’s a trend that is clearly being picked up, and recognising that trend, we are upping our game in naturals,” Mehta told reporters on Monday.

Read: Patanjali Vs Dabur. The ad war for your attention

Emami, which is already a strong player in the natural/ayurvedic space through its Zandu brand, is targeting rising cases of lifestyle diseases such as diabetes, joint pains and digestion problems, to launch new products. “We plan to launch natural healthcare products for lifestyle diseases and are test marketing a few products,” said Naresh Bhansali, CFO, Emami. The company has seen a 30-35% growth and will continue to grow aggressively, added Bhansali.

Bangalore-based Himalaya Herbals is charting plans to expand into the men’s grooming segment, to counter measures to build a presence and rival Patanjali. “Men’s grooming is a `5,000 crore segment and there are a lot of white spaces where we see opportunities,” said Himalaya business head Rajesh Krishnamurthy.

The company has also increased advertising and marketing spends to around 13% of sales, from 10-11% and recently launched a marketing campaign for men’s facewash range roping in players from IPL franchise Royal Challengers Bangalore. Himalaya sells its products through 1.5 million outlets and is expanding to reach 2 million outlets in two years. It will also expand its own company-owned stores to 200 from the current 150.

Analysts say the Ayurveda segment is growing ahead of the market, so its natural that more companies will look to enter this space. “Companies with herbal positioning are growing 1.5 times the industry,” says Percy Panthaki of brokerage house IIFL. “Focus on health and wellness as a category will increase since it remains under penetrated,” he added.

Another multi-national Colgate Palmolive, which is facing the heat from Patanjali’s Dant Kanti in the toothpaste segment, is also upping the ante. “The natural segment in India has been growing rapidly. And to capitalise on this, we’re revitalising our Active Salt toothpaste. We’re also launching Colgate Sensitive clove essence toothpaste,” said Ian Cook, chairman of Colgate Palmolive.

Read: Patanjali’s turnover growth at 150%, Ramdev targets Rs 10,000 crore revenue