Has 2016 been Patanjali's year?
Right from announcing a turnover of Rs 5,000 crore during FY16 to becoming one of biggest FMCG advertisers on television and then stirring up controversy with ASCI and legal bodies, 2016 has turned out to be quite a year for Baba Ramdev’s Patanjali Ayurved
In 2015 yoga guru Baba Ramdev had said that his company, Patanjali Ayurved will be India's biggest fast moving consumer goods (FMCG) player in five years. Given the current scenario, it’s already there. In April, Patanjali Ayurved declared a turnover of Rs 5,000 crore during FY16, a 150 per cent growth from a year earlier and was looking to double it to Rs 10,000 crore during the current fiscal. At the same time it stated that it will invest Rs 1150 crore to set up six processing units and one R&D centre. The company has 4,000 distributors, 10,000 stores and 100 mega-marts. Last year, Patanjali Ayurved also tied up with retail chains Future Group and Reliance Retail.
When it comes to advertising, in January TVCs of products under Patanjali outnumbered those from other big consumer good brands such as Cadbury, Parle and Pond’s according to TV rating agency BARC. Its commercials played across channels in many genres across India, both nationally and regionally. At that point in time it was reported that it has earmarked Rs 300 crore on ad spends. It was not a surprise as Baba Ramdev’s brand started appearing in the BARC chart of top 10 advertisers, even leading at times, almost every other week. To think of it, Patanjali was not even in this list till last year. At one point it even took on its multinational rivals by comparing them to the East India Company in its advertising campaign released in October leveraging ‘swadeshi’ sentiment. With that campaign it became the biggest television advertiser in the first week of August according to BARC.
This year also saw Patanjali testing waters in sponsorship of numerous television properties across entertainment, kids and sports through its products. For instance, Patanjali Kesh Kanti was the presenting sponsor for Star Plus’ ‘Prisoner of War’ and &TV’s ‘Waaris’ while Patanjali Powervita chose to sponsor Sony’s ‘Super Dancer.’ Star had earlier roped in Patanjali Special Chyawanprash as the co-presenting sponsor of the Kabaddi World Cup that was held in October.
In production, Patanjali Ayurved declared to clock Rs 1 lakh crore by 2020. According to Baba Ramdev it’s not an impossible feat as Patanjali has been registering 100 per cent growth for the last four years. The current objective is reported to be Rs 50,000 crore in the next two-three years for in-house production. With its continuing investment on food and herbal parks across India (including Noida, Andhra Pradesh, Maharashtra, Assam, Jammu and Kashmir and Madhya Pradesh) this production number doesn’t seem impossible. The company was putting its money for mega shelter for cows, Ayurveda research and Rs 2,000-plus crore project in Uttar Pradesh for integrating farmers to the markets and wider world.
Baba Ramdev said Patanjali will also venture into garments and launch 'swadeshi jeans’ early next year. International markets are also in its radar as it’s reported to work with US e-commerce giant Amazon. If the deal falls through, Patanjali Ayurved’s products will be reaching to nine overseas markets like the US, the UK, France and Japan that account for 300 million shoppers on Amazon’s site. Earlier it even mentioned about entering Pakistan and Afghanistan in the future (if political conditions allow).
From looks of it, has 2016 turned out to be the year for Patanjali? Here’s what brand experts have to say:
N Chandramouli, CEO of TRA, and a self confessed fan of Patanjali products, agrees as he says, “We have been watching the brand for a couple of years from the sidelines. It has always been selling to a closed community of Baba Ramdev’s followers. Nobody realised how it entered. Now Patanjali has climbed up in the top 100 most trusted brands in the country. It has gained through product strategy. It’s only speaking because of its quality of product. Its Dant Kanti has eroded the Colgate brand. So in 2016 more people started to acquire the brand. After clocking Rs 5000 crore, Rs 10,000 crore is no mean feat for them. It will become 20,000 crore in next couple of years. So overall, I don’t think there could be a better year for Patanjali till now but 2017 will only get better. They will become wiser.”
However Chandramouli feels that things were stretched too far with the announcement of ‘swadeshi jeans.’ “It (Patanjali) has to realise that there needs to be a product strategy that’s different from branding. It’s not a good idea to extend the Patanjali brand to jeans because it should also cater to aspirations. It shouldn’t follow a FMCG strategy.”
Harish Bijoor, brand-expert and Founder, Harish Bijoor Consults Inc, says, “2016 has been a defining year for Baba Ramdev, Patanjali and everyone associated with it. Patanjali has challenged the biggies dramatically. It’s doing things differently. Another reason why 2016 is the year for Patanjali is that it has shaken and stirred FMCG to a level that MNCs have started reacting. Most MNCs in India have introduced ayurvedic products like toothpaste and tea among others. So even though Patanjali Ayurved had Rs 5000 crore turnover this year, in terms of mindset it is occupying Rs 15,000 crore. In advertisement they are using a language of credibility in a world where everybody is click and blink. That’s their differentiation.”
On a similar note, Jagdeep Kapoor, CMD , Samsika Marketing Consultants, puts his point across, “2016 was a strong year for the brand. Patanjali , the mother brand , along with its sub brands like Dant Kanti and other sub brands that have done extremely well in 2016 , expanding and strengthening its brand equity, sales and image not only locally , regionally and nationally but even gaining international awareness. On analysis one finds an impressive combination of celebrity (i.e. Baba Ramdev) and credibility (Ayurveda) in the brand. From high end to middle class, modern to traditional, literate to illiterate, Patanjali addresses and caters to all segments. Hence it’s a huge brand in terms of revenue because it has not missed any avenue. It has made competition rethink their strategies and react across categories. Also due to brand and sub brands strategy it saves a lot in media spends. This is because the entire category gets advertised through the mother brand Patanjali. 2017 will be a stronger year for Patanjali with wider acceptance, apart from early adopters, the laggards will also accepting the brand due to strong pull and positive word of mouth,” says Kapoor.
Kapoor also points out the areas of improvement for the brand. “It can definitely improve its distribution in neighbourhood kirana stores. Regarding product acceptance, competitive pricing and relevant awareness, it is doing fine.”
But the year also saw the company stirring controversy with regards to its intermittent feud with self-regulatory body for advertising ASCI and also legal bodies. Recently its five production units have been instructed by a court in Haridwar to pay up a fine of Rs 11 lakh for ‘misbranding and putting up misleading advertisements’ of their products. ASCI also kept pulling up the Ayurvedic company for misleading ad campaigns (which denigrates other products) for its sub-brands like Jeera Biscuit, Kacchi Ghani mustard oil, Kesh Kanti and Dant Kanti from time to time. This propelled the yoga guru to threaten to sue the body for defamation. But interestingly, brand experts feel controversy is part of life when it comes to any FMCG brand.
As Kapoor says, “They are part of any growing brand. It is a reflection of the strength of the brand.”
Bijoor agrees, “Anybody involved in FMCG would understand that these things happen. Controversies are a way of life. Having said that, Patanjali is a clever nifty player and as good as any big MNC. ”
Chandramouli also trivialises the controversy factor as he adds, “The feud with ASCI is a small thing. Ramdev is known for his commentary. He doesn’t have the sophistication the ad world requires. He is like the first time advertiser. He has made some wrong claims. I am sure he won’t say it again. I think it’s a matter of learning. Controversy is nothing for the brand. Now you will see this brand becoming stronger with knowledge.”
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