While both Dabur and HUL have been aggressive in the ‘naturals’ market with new launches across its portfolio, unchecked distribution expansion and inconsistent quality of products have also been at the heart of Patanjali’s problems.
Once a hero brand on television, daring multinationals with a combative, in-your-face advertising narrative, Patanjali Ayurved, whose brand ambassador is its co-founder Baba Ramdev, has been quietly ceding ground.
It is barely visible on TV or in print and its sales, as recent numbers indicate, have begun to take a hit for several product categories, in urban and rural markets.
Once Brand Patanjali was impossible to miss.
A regular on the weekly top 10 advertiser lists for TV, it regularly made the headlines.
But Patanjali has been missing in action for a while now.
Weekly data by the Broadcast Audience Research Council (BARC) shows that Patanjali, credited for bringing the focus back on natural ingredients, no longer figures in its top ten list of advertisers.
It fell off the charts sometime in 2018 after being in the top 10 consistently for two previous years, media planners and buyers reveal.
Instead it is the likes of Hindustan Unilever (HUL), Reckitt Benckiser and Procter & Gamble, companies that Ramdev targeted pointedly through Patanjali’s advertising, who are on top today.
A recent report by ratings agency CARE shows Patanjali’s sales slipping from Rs 10,000 crore in fiscal 2017 to Rs 8,135 crore in fiscal 2018 to Rs 4,701 crore in the first nine months of fiscal 2019.
Contrast this with its performance between fiscal years 2016 and 2017, when sales doubled from Rs 5,000 crore to Rs 10,000 crore, and the picture becomes clear.
Patanjali’s slide down the brand ladder, say experts, has come as rivals steadily advance in the ‘naturals’ space and consumers in general look for options beyond Patanjali.
“There is a visible fight back by companies such as HUL and Dabur in the naturals space,” says Abneesh Roy, senior vice president, research (institutional equities), Edelweiss.
“Both Dabur and HUL have been aggressive in the ‘naturals’ market with new launches across its portfolio, pushing consumers to take a long hard look at them,” he says.
During the release of their first quarter numbers for fiscal 2020, both Dabur and HUL said they continued to launch products on the ‘naturals’ platform.
Mohit Malhotra, chief executive officer, Dabur India, said that the naturals segment constituted nearly 25 to 30 per cent of the overall Rs 8,000-crore oral care market in India.
It is growing at 18 per cent per annum, three times the rate of growth of the non-naturals segment, which stood at 6 per cent per annum, he added.
This prompted Dabur to relaunch toothpaste brand Babool last month and it is expected to do the same with Meswak (toothpaste), playing up its ayurvedic credentials, sector experts said.
HUL, meanwhile, said Sanjiv Mehta, chairman and managing director, HUL, has a three-pronged approach for its ‘naturals’ portfolio.
It plans to launch variants of its existing brands in personal care (including hair care and skin care) to meet the growing demand for natural products.
It is also focusing on flagship brands such as Lever Ayush and paying attention to specialist brands such as Indulekha, acquired by the company a few years ago and introducing new brands such as Citra in the marketplace.
“This strategy allows us to cover our bases well,” said Mehta during the company’s post-results press conference last month, adding brands such as Lever Ayush were tracking well among consumers.
Patanjali however has remained steadfast in its denial of all talks of its receding presence in the market.
Ramdev has countered talk of a slowdown, saying his company will bounce back as its core promise of providing chemical-free products remains intact.
But analysts remain bearish, saying unchecked distribution expansion and inconsistent quality of products have been at the heart of Patanjali’s problems.
While Patanjali has been in the news for acquiring the debt-ridden edible oil company Ruchi Soya for Rs 4,350 crore, its core FMCG business, say experts, is languishing with no big launches, barring the rollout of a few dairy products in May.
It is also getting aggressive in apparels with the launch of Patanjali Paridhan in November.
All of this has done little however to help the brand.
And the spotlight that it had turned firmly upon itself, a few years ago, seems to have lost its power.
Photograph: Amit Dave/Reuters