Brand Patanjali rides on the ‘Made in India’ swadeshi sentiment, but Acharya Balkrishna, CEO, Patanjali Ayurved Ltd, soon expects the company to write a success story abroad too
By Srabana Lahiri and Neeta Nair
At the recently concluded Goafest, Acharya Balkrishna, CEO of Patanjali Ayurved Limited (PAL), took centrestage on Day 1 of the festival to make a powerful plea for a return to our Indian roots – seasonal foods, local produce and a wholesome lifestyle – and drive home Brand Patanjali’s simple philosophy of helping the people of the country to live a better life. Calling it an antithesis to the stress of modern day life, he outlined the role Brand Patanjali is playing by bringing to the masses healthy and competitively priced local products and giving them an alternative to buying products from MNCs. But for all the marked swadeshi sentiment shown by Patanjali, and the Acharya’s own public declarations criticizing multi-national companies operating in India, Patanjali itself has ventured beyond Indian shores, setting up a manufacturing unit in Nepal, and preparing to export goods to China. According to the Acharya, so far, Patanjali was busy catering to the increasing demands of people in India; but now that it has set up so many manufacturing units here, the plan is to focus on other countries too. He justifies his tirade against MNCs by saying that if Patanjali operates in another country, the difference is that it would give back to that country in full measure. “If we establish a unit outside of India, like in Nepal, then we would use 100% of the profits we get there for the betterment of that country. And we will only expand to countries which don’t have many resources so that we can contribute to the education and health of masses there. If the MNCs operating in India do the same here, then we will be happy to welcome them,” he says.
THE GLOBAL AMBITION
The dhoti-clad Acharya Balakrishna is at the helm of a multi-crore business empire, but earns no salary from the organization he serves. He doubles up as its brand ambassador and claims to spend all profits on socially responsible initiatives. Not only does he defy all norms of traditional marketing and advertising to take on giant competitors, but also dreams of building his brand into an international name. While stressing on the brand’s global ambitions, he talks about the meteoric rise of a company which flexed itself, much like the Yoga positions its mentor Baba Ramdev excels in, to suit the market needs. A memorable anecdote he relates is the story behind one of Patanjali’s first launches, Patanjali amla juice. “One day, a bunch of farmers approached us to sell their produce of amla as they wanted to uproot their unprofitable amla plantation. The aggrieved peasants wanted to replace amla with some other money-fetching crop because since 1993, the market rate for amla had not gone up from Rs 3 per kg. To our surprise, Baba Ramdev said he would buy their entire produce to help them out. Suddenly, we were left with tonnes of amla, no storage space and no knowledge or mechanism to extract juice. Some quick thinking made us realize that Punjab Agriculture department had a few machines lying around that could be used to extract juice.” And so began Patanjali’s journey of extracting amla juice, bottling it and selling it in the market. Baba Ramdev used his yoga camps for word of mouth publicity about the health benefits of amla juice, and suddenly they had a hot product on their hands, available at an affordable price. The Acharya says Patanjali didn’t look at the market size for amla juice before launching the product, and today the brand sells more than 50 tonnes of the juice every day and the biggest beneficiaries of that are the farmers who are now getting close to Rs 16 for a kilo of the same amla. That is the philosophy Brand Patanjali thrives on.
BENEFITING THE INDIAN BUYER
Then onwards, Patanjali created a niche for itself in the sea of MNCs, soaring like an eagle clutching in its talons the power of ayurveda, traditions and the swadeshi sentiment. Explaining how the brand regulated the price of the once elitist aloe vera juice, the Acharya says, “We saw that the imported brands were selling aloe vera juice for as high as Rs 1300 a bottle, we decided to check for ourselves and realized that at the most we would need Rs 200 to produce the same juice and sold our product for as much. As a result, these imported brands had to bring down their price to around Rs 300.” Equating Patanjali with a national movement, he states, “Patanjali is a movement to build a new India. The idea is to build a formidable brand that has a strong Indian identity and benefits the consumers in a real way. Our products have resulted in a disruption of a different kind which has forced other players to rationalize product pricing and this directly helps the Indian buyer.”
Keeping it affordable has been Patanjali’s mantra since the beginning, owing to which it has found resonance with the masses. The Acharya says, “Revenue-wise, we may not be on top when compared to the other companies, because we price our products low. But volume-wise we are way ahead because at a lesser rate we produce more.”
ON ADVERTISING RIGHT
Acharya Balkrishna has a strong view on the way brands today craft their advertising communication. He is particularly amused with a recent toothpaste ad. In his words, “Aap toothpaste kyun use karte ho, daato ko safed rakhne ke liye, unhe mazboot banana ke liye…but aaj kal toothpaste ke ads main yeh sikhate hai ki ladki patane ka kaam bhi toothpaste karta hai, bolo bhala woh kaise sambhav hai.” (The qualities of a toothpaste is strengthening and whitening teeth, how can it be useful in impressing girls!).
Crediting Patanjali with creating new advertising trends, he says, “I remember when Patanjali started advertising its products, we used to feature all our products in one ad, which according to many marketers was not the right approach. Our aim was only to inform the buyer. However, when I look back, I see the same marketers now following the Patanjali approach by showcasing more than one product in their ads.”
He goes on to elaborate how Patanjali decided to keep things simple and informative in all its ads. “We talk about the qualities of all our products in our ads simply because we are not here to give people hopes of a different world or any illusions through our product. We sell products, not dreams or fears.”
His mantra clearly seems to be working, considering that the company is aiming at doubling its revenue of Rs 5000 crore in 2015-16, has found takers in almost every household and has launched products in nearly every category thinkable at lightning pace. He also banks on the fact that after a generation that gravitated towards all things ‘phoren’ there is a new pride among Indian youth for things ‘Made in India’. He promises to make ‘Make in India’ the best in the world with the collective might and vision of Brand Patanjali: “Every organization needs a visionary and a missionary, Baba Ramdev is the visionary and I am the missionary,” the Acharya declares.
‘If we have a unit outside India, then we use 100% of the profits from there for the betterment of that country’
Balkrishna Suvedi, better known as ACHARYA BALKRISHNA, the low profile CEO of Patanjali Ayurved Ltd, talks to NEETA NAIR, answering questions with ready repartee and a great clarity of thought that has clearly been instrumental in taking Patanjali Ayurved Ltd to where it is today. He discusses the company’s expansion plans, aspiration of becoming a multinational company, and of course controversies
Q] Tell us why you decided to open a manufacturing unit in Nepal and are you planning to start one in Bangladesh or Pakistan soon?
We manage to do a fairly good level of production in our recently opened Nepal unit. We want to expand Patanjali Ayurved Ltd to other countries slowly. So far, we were occupied with catering to the increasing demands of people in India; now that we have set up so many manufacturing units here, we plan to focus on other countries too.
Q] Patanjali Ayurved has waged a war against MNCs by extensively using the ‘swadeshi’ card in India, why do you think Patanjali will then get acceptability outside India? Isn’t that contradictory?
There are two things I’d like to say here. One, if we establish a unit outside of India, like in Nepal, then we would use 100% of the profits we get there for the betterment of that country. And we will only expand to countries which don’t have many resources so that we can contribute to the education and health of masses there. If the MNCs operating in India do the same here, then we will be happy to welcome them. In fact, we want them to do this in India and mend their ways. Through Patanjali, we have just given the Indian population an alternative, when earlier they had no choice but to buy products made by the MNCs.
Q] So would you say that the MNCs in India don’t do anything for the population here?
Yes, they do pay taxes and people often argue that the MNCs are thus contributing to our country’s revenue. But everybody does that, even the Indian firms. What we are doing is go beyond that for the betterment of people in the countries in which we are setting up units, through our various welfare activities. Most importantly, we are not in any way trying to change or take people away from their traditions, we will do all we can to preserve it.
Q] You are also planning to export Patanjali goods to China - which of your products do you see clicking there?
Interestingly, just a couple of days ago, I found that several Patanjali products are finding their way to China illegally, through the backdoor. It means there is a demand, a craze for Patanjali products in China. These products are sent via Nepal and other routes. We have our network there. China has been dumping their substandard products in India. We are in fact going to do a good turn to them by providing good quality products. I am positive China will welcome us wholeheartedly.
Q] But time and again questions have been raised about the quality control aspect of Patanjali products. Additionally, your company was also fined Rs 11 lakh by the Haridwar Court for misbranding products…
As far as the misbranding case is concerned, it was a non-issue. They had a problem with regard to the labelling on the packets. For example, they said we can’t use the word ‘lychee’ on our product ‘Patanjali lychee honey’. Also, in the same case, three out of five products were cleared but two weren’t simply because of pressure from the Government. There is nothing wrong with the quality of our products. Patanjali has a research lab with more than 250 scientists, and also a Bio-safety Level 3 lab set up with modern equipments and top-level scientists along with our own knowledge of tradition. This combination is something only Patanjali Ayurved can boast of in the whole world. No one can challenge us there.
Q] According to the same Court order, your company was found guilty of releasing misleading advertisements by selling certain products made by other companies under PAL’s name… what do you say to that?
Your information is wrong, you can visit us in our unit, where more than 20,000 people are working. These are very old rumours, but they fell flat because they are lies.
Q] You started Patanjali Ayurved about a decade ago, but started advertising only in late 2015, after which Patanjali became a brand to watch out for. How much credit do you give to advertising for your success?
There are two types of advertising - one which is done for the sake of it and the other to dispense information. Our strategy has always been to make informational ads which only focus on the product benefits. People needed to know that Patanjali makes so many products now and thus advertising had a big role to play in it. But we don’t put out ads that would make any fake promise to the consumer or show them wrong dreams or false illusions. We shall never ever make such ads to fool our consumers.
Q] How much of your total revenue is dedicated to advertising?
We don’t spend a lot on advertising, just two-three percent of our annual turnover.
Q] You had claimed last year that you would double your revenue and even leave Colgate behind by the end of 2016, is that on track?
I am not aware of Colgate’s revenue this year. But we had an aim of reaching Rs 10,000 crore revenue by the year-end and I think we are almost there.
Q] Patanjali has always advertised aggressively on Television; but of late you are turning focus to Digital, why?
Patanjali has a very strong youth following, we wanted to reach out to them via the Digital medium.
Q] A lot of MNCs have started their own herbal line of products after Patanjali’s success, do you feel vindicated?
In MNC’s ne desh ko bahut saara chemical khilaa karke logon ki sehat ke sath bahot khilwaad kiya hai, ab jadi-bootiya khila kar ke usi sehat ko theek karna chaahte hai, toh khushi ki baat hai (These companies for years have fed chemicals to our countrymen, playing with their health. Now if they want to set it right by giving them herbal products instead, then it is a good development.) I am proud to say that we set the trend and now that we are successful, many have come to follow our footsteps.
Q] Do you think celebrity brand ambassadors help a brand grow, considering that you have Sushil Kumar and Hema Malini on board promoting Patanjali now?
Hema Malini has endorsed our product for free, wrestler Sushil Kumar had himself approached us and shown interest, we told him you are a wrestler whose lifeline is ghee, so why don’t you endorse Patanjali ghee… But we don’t believe we need celebrities to sell our products.
Q] Do you think controversies help a brand - Baba Ramdev is known to make statements like ‘Patanjali will make Nestle’s bird fly away’ and ‘shut Colgate’s gate’?
You are a better person to comment on that than me.
Q] Patanjali doesn’t carry out any external market research before launching products. Has that ever backfired?
So far, not a single one of our products has failed in the market.
Q] Tell us about some new products that are going to be launched next.
At the moment, we are strengthening our existing line of products. Yes, there are plans to launch some new products like herbal tea and Patanjali jeans, but the research is still going on, so it will take time.
Q] Now that Patanjali has really branched out, to what extent are you involved in the day-to- day operations of the company?
I have nothing else to do and am thus involved in every step along the way – be it making policy decisions or day-to-day operations. I try to personally interact with every single person in our organization and hear their views out.
Q] You are such a successful CEO, why do you prefer to keep a low profile?
Aadmi zameen pe rehta hai toh zameen se neeche nahi girega. Upar hota hai toh gir sakta hai, isliye zameen pe rehna achha hota hai. (One can’t fall if he is grounded).