Yoga guru Baba Ramdev and Patanjali Ayurved make for a winning brand: Here's why

In the days leading up to June 2015, an officer of the Uttar Pradesh Food Safety and Drug Administration asked for a test on a few samples of packaged Maggi noodles, to check on its claim that it contained ‘no added MSG’. The test at both the state’s Gorakhpur laboratory and a repeat one at the Central Food Laboratory in Kolkata found that the noodles did contain MSG; in addition, CFL reported that there were ‘very high quantities of lead’ in the samples as well.

What happened next is well known. From June 2015 to November 2015, Maggi noodles – which entered the Indian market in 1983 – were ‘banned’. Nestle India had to pull its product from shelves all over the country, and could only restock it once the Bombay High Court ruled that the ban was untenable.

The controversy over Maggi caused consumers no small amount of consternation – and not least because the ubiquitous ‘two-minute’ snack was no longer available. Take a look at online searches and posts of the time and there are several variations of the ‘is there lead in my food’ and ‘can lead in my food cause cancer’ type of queries.

The Maggi issue was for many a sort of confirmation of what they had suspected, but not ‘faced up to’ – that in our ever increasing reliance on packaged products, we do not actually know what it is that we're using or ingesting, and that in choosing convenience, we were also choosing harm. Our colas had pesticides, our beauty products had harsh chemicals, and the milk we drank was adulterated. Who could you trust?

 Yoga guru Baba Ramdev and Patanjali Ayurved make for a winning brand: Heres why

Wrestler Sushil Kumar in the ad for Patanjali ghee

How about a yoga guru, who abided by the simple, natural life and the wholesome principles of Ayurveda?

The Patanjali story – which is closely tied with its brand ambassador Baba Ramdev’s story – has been written about a lot in recent times. The main reason for it is the nearly Rs 5,000 crore earnings that Patanjali Ayurved Ltd (the company was set up in 2006) reported in March 2016 – a steep rise over the Rs 2,000+ crore amount for the previous year. Ramdev’s announcement that their next target is to hit Rs 10,000 crores, and the threat that might pose to other companies in the FMCG sector have been other headline-grabbers.

But this isn't just a story about phenomenal growth in revenue – this is the story of the phenomenal growth of a ‘brand’ and its guru.

Going back to 2015, when the Maggi row was at its height, Baba Ramdev announced that Patanjali Ayurved would be launching its own brand of noodles. These would be made of atta, and would most definitely not have any of those toxic ingredients that other packaged products did.

Jhat pat pakao, befikar khao” was the tagline for Patanjali noodles, at once taking on the benefit of being not just quick, but also healthy. But noodles weren't the only thing the brand had to offer – in 2015, it launched several other products, including flour, ghee, biscuits, honey and toothpaste.

Patanjali Ayurved Ltd, set up in 2006, reported earnings of Rs 5,000 cr in March 2016

Patanjali Ayurved Ltd, set up in 2006, reported earnings of Rs 5,000 cr in March 2016

The brand simultaneously also stepped up its advertising. Previously having relied on word of mouth, and of course a mention or two by Ramdev during his televised yoga appearances on the Aastha channel, Patanjali began to buy up print and TV ad space. A Mint report from December 2015 states that the company intended to spend around Rs 360 crore on advertising, for the period leading up to March 2016.

By the first week of July 2016, Patanjali had become the brand with the most TV ad insertions, according to a report by BARC (the Broadcast Research Council of India), with a little over 26,000 ‘insertions’. It is followed on the list by Dettol, then Honda, Colgate, Pond’s, Airtel, Vodafone, Dove, Fair and Lovely, and Lifebuoy, in that order.

Advertisements for Patanjali were mostly focused on Baba Ramdev extolling the products’ virtues or smiling benevolently on; some ads had simple but catchy jingles like “bas do ghoont ki baat hai” (for the gooseberry juice that is believed to have several health benefits on daily consumption) while others roped in celebrity endorsers –wrestler Sushil Kumar for Patanjali ghee, and actress and BJP MLA Hema Malini for the biscuits.

Incidentally, a Credit Suisse report released this year states that the ghee is Patanjali’s main bestseller, followed by its toothpaste (Dant Kranti; it is believed to be the leading rival to Colgate in the rural Indian market). Shampoo, honey and soap are Patanjali’s next highest sellers, while its malted foods and skin creams have been described as “laggards”.

But for the most part Patanjali hasn't needed to rope in celebrity endorsers – why should they when in Ramdev, they have the biggest brand ambassador they could possibly want?

Baba Ramdev and Acharya Balkrishna in an ad for Patanjali. Balkrishna is the MD of Patanjali Ayurved Ltd, and is said to own more than 90 percent of its equity. He is also Ramdev's closest aide.

Baba Ramdev and Acharya Balkrishna in an ad for Patanjali. Balkrishna is the MD of Patanjali Ayurved Ltd, and is said to own more than 90 percent of its equity. He is also Ramdev's closest aide.

Baba Ramdev isn't the only spiritual leader to have his name associated with an ayurvedic or herbal products line. Sri Sri Ravi Shankar, for instance, has Sri Sri Ayurved. Sadhguru Jaggi Vasudev has the Isha Arogya line. Neither of these, however, have focused on the kind of expansive, aggressive growth that Ramdev’s Patanjali has (although the Sr Sri line is looking to change that over the coming year).

Nishad Ramachandran, who handles technology driven marketing at Hansa Cequity, points out that Ramdev has a massive ‘mass connect’ and that has worked in Patanjali’s favour.

There is also the fact that he embodies the philosophy behind the products he helps sell.

“When you see Shah Rukh Khan selling Lux soap, you know he is a star who's being paid to promote a product. But when Ramdev (sells a product) you know he is living that lifestyle,” says Ramachandran.

A senior business journalist Firstpost spoke to echoed the sentiment:

“I think there is a high level of cynicism about products from MNCs. They also sell herbal based products -- Colgate is an example. Fundamentally, Patanjali is perceived as a brand that is good without over promising... Ramdev is not only viewed as a trusted voice but doubles up as a brand ambassador. This compares to a SRK or Virat Kohli selling muesli or honey. I cannot think of another example where the promoter/owner is the brand ambassador as well. The consumers are more inclined to believe Ramdev uses his products as compared to SRK driving a Santro or the Hyundai I-20.”

Ramachandran points out that brands expend an enormous amount of time, effort and money to “manufacture influencers”. “In Ramdev, you have a genuine influencer; look at the way the recent photos of him playing football went viral on social media,” he says.

Both the business writer we spoke to, and Ramachandran, point to another factor in the improved visibility of Patanjali as a brand – its ability to secure good distribution networks. This is an aspect that comes up in most reportage on Patanjali as well: with giants like the Future Group and Reliance offering retail space, the products are now available across India. They're also available online, and in 'Swadeshi' franchise stores across towns and villages. Add competitive pricing to the mix, and you have a very tempting product.

The Patanjali brand story isn't without its issues.

There have been allegations that Patanjali copies the packaging of its rivals’ products (or basically creates spin-offs of their most successful ones); most recently, the brand reached a mutual settlement with Emami, which said Patanjali had copied its Kesh King concept for its own hair oil, Kesh Kanti. Then,there has been an ongoing dispute with the Advertising Standards Council of India, which has rapped Patanjali’s knuckles for ‘grossly exaggerating’ shortcomings in its rivals’ products (such as Dabur’s line of juices) and for presenting unsubstantiated claims about its own (such as Dant Kanti’s ability to cure gum problems). And the spectre of contamination/adulteration that has brought down bigger brands could haunt Patanjali too – there was the row in 2005-06 when Brinda Karat accused Ramdev of not disclosing that his medicines contained human and animal bone particles (he denied the allegations); and in December 2015, worms were found in packets of Patanjali noodles.

Those who use the beauty products too point out that they are not really "all-natural": the Kesh Kanti Reetha Shampoo, for instance, does contain Diazolidinyl urea (a formaldehyde releaser found in many cosmetic products).

However, these seem to be minor hiccoughs in the Patanjali story.

Baba Ramdev, and his brand, are ready to write the next few chapters in the Indian FMCG sector – and for now, they are in complete control of the narrative.

Updated Date: Jul 30, 2016 12:42:41 IST



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