Although growth was not visible during the period, CEO Acharya Balkrishna believes that customer faith, along with capacity expansion in the Patanjali brand, will continue to drive the growth of the company.
Even as peer companies posted double-digit growth in sales in the last financial year 2018, Baba Ramdev’s FMCG company Patanjali recorded almost flat sales. Although growth was not visible during the period, CEO Acharya Balkrishna believes that customer faith, along with capacity expansion in the Patanjali brand, will continue to drive the growth of the company.
As for the sale of herbal products, Balkrisha said in an interview to ET Now that Patanjali’s edge comes from its deep knowledge of Ayurveda, as compared to the other companies selling such products through marketing. He said that consumers trust Patanjali as an Ayurveda brand.
“Selling products as ‘Ayurveda’ is one thing and having knowledge of Ayurveda is another. Ayurveda is not only soap and shampoo. Ayurveda is medicine,” CEO Acharya Balkrishna said to ET Now. “I don’t think any other big company working in the Ayurveda or herbal sector has NABL label international labs… We have not chosen any field that we do not know. We are already associated with Ayurveda,” he added.
Patanjali has been a disrupter in the FMCG industry and has posed a challenge to the incumbent behemoths. It manufactures a line of mainstream FMCG products ranging from toothpastes, shampoos and other personal care products to modern foods such as cornflakes and instant noodles.
The company had recorded a 100% compound annual growth rate for the past four years. Notably, Patanjali faced flat sales for 2018 fiscal. A Credit Suisse report said that among the factors responsible for the Patanjali brand’s fatigue were a drop in advertising spending and media buzz. The report said the company’s honey and hair-care products were not doing as well, and even strong categories such as toothpaste were plateauing.
“All the raw material for herbal products are produced in rural India. But, as per my information, the bigger companies are not working with proper strategy or planning towards backward linkage, cluster farming or buyback agreement. We are planning to do that,” Acharya Balkrishna added.
“‘Farm to fork’, that is providing farm products to households, has already been our aim and we are working towards it. We aim to deliver good products not only in urban areas but also to the rural households by processing the rural products in a proper manner,” he added.