Baba Ramdev Expands Empire Beyond Yoga To FMCG

It may be an unlikely com bination -yoga for inner peace and FMCG for external beauty -but Baba Ramdev appears to have struck the right pose in both. The guru whose `easy yoga' has won him a mass following is also cornering the FMCG market with daily use products ranging from soaps to cornflakes.

Baba Ramdev's brands seem to have scaled up quite rapidly . For 2013-14, Patanjali Ayurved, the company that manufactures the products, clocked a turnover of about Rs 1,200 crore, up from about Rs 850 crore a year earlier and Rs 450 crore in fiscal 2011-12, company filings and industry sources said. 

And in the current fiscal, Patanjali is expected to clock a turnover of Rs 2,000 crore, according to Aditya Pittie, CEO, Pittie Group. This marks a 67% jump from the previous fiscal.

Pittie is the Mumbai distributor for Patanjali's general trade business and a pan India distributor for its modern trade segment.

Patanjali is present in almost all categories of personal care and food products -soaps, shampoos, dental care, balms, skin creams, biscuits, ghee, juices, honey, atta, mustard oil, masala, sugar and much more. Going by turnover projections of Rs 2,000 crore, Baba Ramdev’s FMCG business could rival Emami’s (Rs 1,700 crore), and be nearly half of Marico’s (about Rs 4,000 crore).

Baba Ramdev’s FMCG business, Patanjali Ayurved, has expanded rapidly despite most of its products being priced lower than its competitors. What gives the company an edge is its very low expenses on advertisements. In comparison, leading FMCG compa nies spend about 20-30% of their sales on advertisements.

With the Patanjali brand’s growing reach and popularity among consumers, it’s now being discussed in corporate boardrooms as well. This is in sharp contrast to its quiet beginning in 2007. At that time the existing FMCG brands didn't quite take note. Started through the franchise route in large cities, as the demand for his products grew, Baba Ramdev realised the huge scope within the FMCG sector and started building the range, taking on deep-pocketed multina tionals. 

The franchisee model has grown exponentially: From about 150-200 dedicated outlets in 2012 to almost 4,000 now. The initial success of the franchise route also prompted Patanjali Ayurved to make its FMCG range available in the open market. This opened up avenues for the company’s distributors who were now allowed to sell to other kirana stores in general trade.

Now some of the Big Bazaar, Hyper City and Star Bazaar stores in Mumbai are also stocking its FMCG products. In modern retail, the company’s turnover has grown from Rs 5 lakh from five stores a month to roughly Rs 5 crore now, with same store closing annual sales growth of 20%. “Modern retail currently contributes about 3% of total Patanjali sales with only 30 SKUs (stock keeping units),'' said Pittie.

The next step is online – Patanjali’s products have just started retailing at e-commerce site BigBasket. “I am talking to Amazon which has started a new food and grocery gourmet category,'' said Pittie.