Patanjali started its operations with Patanjali yogpeeth in Hardiwar, Uttarakhand. Patanjali yogpeeth is one of the largest yoga institutes in the country. Swami Ramdevji Maharaj and Acharya Balkrishanaji Maharaj set up Patanjali Ayurveda Pvt Ltd for treatment, research and development and for the manufacturing of ayurvedic medicines in Yoga and Ayurveda.
Patanjali Yogpeeth offers treatment and scientific research and has brought a revolution when it comes healthcare in the country with the combined approach of Yoga and Ayurveda.
The infrastructural facilities at Patanjali Yogpeeth includes an OPD for free medical consultation, IPD of thousand beds, laboratory for test investigation of radiology, cardiology and pathology, a yoga research department, free yoga classes, high quality ayurvedic medicines manufactured by Divya pharmacy, facilities of library and reading room along with a cyber café, a huge auditorium, apartments for senior citizens, a grand museum and a sale outlet of 11,000 square feet for literature related to yoga and Ayurveda.
Patanjali Ayurveda- Entry into FMCG
Patanjali started off manufacturing bulk ayurvedic medicines later branching its operations into FMCG markets as well. Since, the FMCG market has low entry barriers, Patanjali soon established itself as a major consumer goods’ manufacturer. The recent trends clearly imply that the company’s priorities are shifting from medicines to consumer goods, perhaps because the net revenues earned through FMCG are on par with ayurvedic medicines.
Patanjali Ayurveda – Current Market Insights
Patanjali as a brand currently has more than 350 products from Soap to Toothpaste and from Oats to Health drinks. The 2014-2015 revenue of Patanjali Ayurveda crosses Rs. 2000 crore figures. In January 2016, IIFL said “Patanjali Ayurveda Ltd has, in a short span of less than a decade, recorded a turnover higher than what several companies have managed to achieve over several decades. There is no doubt that Patanjali is a disruptive force in the FMCG space and is a credible threat for the incumbents.” The industrial data indicates that the brand has a market share of 4-5%.
Patanjali Sales (2012-2015)
Focus on revenue over profitability
As per the report by edelresearch “The company is well on course to achieve its targeted revenue of ~INR50‐60bn in FY16 (INR20.2bn in FY15). Even though the thrust is not on profitability, the company managed to clock ~20% EBITDA margin in FY15, aided by better cost management (latest machinery and strong R&D capabilities) and lower A&P spends”
Proactive moves in Innovation
Patanjali Ayurveda is aggressively planning to enter into every consumer category. Currently Patanjali Ghee is expected to be at INR 12 billion in the financial year 2016 and if it gains solid distribution expertise, it could pose a serious threat to its competitors. An innovative R&D facility equipped with latest technology, Patanjali has also launched a mobile app which helps the consumer to locate retail outlets and for online ordering of Patanjali products
Patanjali’s Supply Chain Management
The three phases of patanjali’s supply chain are product flow, information flow and cash flow. Patanjali has recently completed a tie up with Future group to sell the products. They also sell their products through their own outlets opened in almost every district/city of India. Each outlet has to send their demand to central office at Hardiwar. Then as per the demand, various products are gathered from various units of Patanjali. The items are delivered to outlets majorly through Patanjali transport.
Sales and Distribution – Patanjali
- Patanjali provides sale of products online and can also be procured through post by sending the money through demand draft
- Patanjali herbal products are available at Post Offices across the country
- Patanjali also has “Patanjali Chikatsalayas” and “Patanjali Arogya Kendra” in almost all the cities of the country
To strengthen the distribution Patanjali is also implementing ERP which will help them in managing the inventory.
Patanjali‘s R&D facility
Patanjali’s R&D center has all the advanced technology and machinery required for testing the products. The company also has a separate R&D department for each of its production units. The company also has a high-end central R&D facility.
Products at R&D level :
- Butter milk in powdered form
- Weight gain and loss products
- Masala Oats
Patanjali Products in the Market
Patanjali has a very strong pipeline, thanks to their innovative and huge R&D setup.
The new products include:
- Patanjali yoga wear (Vastram)
- Dant Kanti Advance
- Sugar free Chyawanprash
- Seabuck thorn dietry supplement
Pricing of Patanjali products vs its competitors
- Spiritual connect with the consumer en masse.
- Herbal products with natural ingredients
- Strong and Innovative R&D
- Baba Ramdev – face of the brand
- Controversies like noodles not approved by FSSAI at the time of launching
- Products like putrajeewak which creates negative impact on the brand
- Strong competitors and low exports
- There is a large domestic market for FMCG Products
- Low entry barrier for new and innovative herbal products
- Competitors keeping a close eye on the growth of Patanjali Ayurveda
- Controversies around the Patanjali group
- Weak supply chain as compared to the competitors
This article is authored by Mr. Manan Sethi and published by Varun Mishra.