Nothing explains the situation of big FMCG firms than two ColgateNSE -0.35 % ads separated by decades. In the late ’70s and early ’80s, Colgate was trying to convert charcoal users to tooth powder. It had launched a commercial that said ”
khurdare padaarth” (abrasive substances) can spoil enamel, the outermost covering of the teeth. In 2015, it came out with a commercial for its new toothpaste ‘Colgate Total Charcoal Deep Clean’ that contradicted the multinational’s earlier claim.
Babas are targeting the huge desi segment which was ignored by the multinational FMCG companies. In an interview to ET a few months ago, Rakesh Kapoor, global chief of British consumer goods maker Reckitt Benckiser said that Baba Ramdev’s Patanjali had made the entire fast moving consumer goods (FMCG) industry “better”, illustrating how India’s cultural roots could be harnessed to build a scalable business “The role of competition is not to eat your lunch; it is to make you better. Patanjali is making everyone better because it is making everyone deliver better value, not only in price but also in benefits,” Kapoor told ET.
The success of Patanjali Ayurved forced multinational FMCG companies to acknowledge the segment they had ignored so far. Colgate’s Cibaca Vedshakti and HUL’s Ayush toothpastes were clearly nods to Patanjali’s Dant Kanti toothpaste which is a flagship product of the desi company.
“There are companies like Patanjali which are trying to show that the way to reach Indian consumers is through their cultural roots and not operate at superficial levels. It will make companies better because they will be forced to understand Indians in a way that perhaps they would not have; and provide innovation and value,” Kapoor said. He said it was going to make other FMCG companies realise what India was all about at the grassroots.
Unlike multinational FMCG companies, Baba entrepreneurs know what India is all about at the grassroots. Patanjali Ayurved Limited has been ranked as India’s most trusted Fast Moving Consumer Goods (FMCG) brand in the TRA’s Brand Trust Report 2018. Patanjali’s runaway success has inspired spiritual guru Sri Sri Ravishankar to scale up his own business of desi products. His FMCG brand Sri Sri Tattva plans to ramp up its marketing spend, earmarking about Rs 200 crore for advertising and promotion. The new entrant in the field of ayurveda and herbal products will spend this amount on mass media advertising, outdoor campaigns and below-the-line marketing across the country to support its expansion plan of opening 1,000 stores in the country. The Bengaluru-based firm was among the largest advertisers in the FMCG category during the recently concluded India Premier League (IPL), spending Rs 10 crore on television advertising. Within the personal care and food category, Sri Sri Tattva will focus on face wash, creams and lotions, shampoo, and ghee, range of rice, special products such as organic version of coconut oil and organic jaggery, respectively.
Sri Sri Tattva aims to achieve a turnover of Rs 500 crore by financial year 2019-20 through its retail stores. According to Tej Katpitia, CEO of Sri Sri Tattva, the company plans to roll out 1,000 franchised stores by March 2020, of which around 600-700 stores will be opened by the end of March 2019 itself. The company will have three type of stores — Sri Sri Tattva Mart, Sri Sri Tattva Wellness Place, and Sri Sri Tattva Home and Health.
Sri Sri Tattva Mart, the first format, will showcase and sell its packaged food, personal and home care products, while Sri Sri Tattva Wellness Place will focus on health and wellness, and will have healthcare practitioners who will provide a detailed diagnosis and prescribe lifestyle and ayurveda medicines to patients. The third format, Sri Sri Tattva Home & Health will retail the entire range of daily use products and medicines apart from also having ayurveda doctors.
In the wake of Patanjali’s success, Sri Sri Tatva aiming at capturing the desi consumer segment and even multinational FMCG companies rolling out desi products indicate a consumer segment has now started emerging which was never explored by big companies.