Patanjali is the 'most overhyped brand' in India: Marico chief

Coming down hard on consumer goods market rival Patanjali Ayurved Ltd, a brand spearheaded by Yoga guru Baba Ramdev and Acharya Balkrishna, Marico Ltd Chairman Harsh Mariwala has said in an interview to financial daily HT Mint that 'Patanjali' is the most "overhyped brand" in India.

He noted that the impact of Haridwar-based Patanjali's growing product line -- ranging from herbal tea, spices, candy and cow milk powder to anti-aging creams, jams, soaps and sweets -- on Marico's fortunes has been "low".

Mariwala said that in most cases, Patanjali products are still struggling with a market share of 2-3 percent. "Their impact on us is very low. Looking at the future, they cannot succeed in all the categories, they will succeed in some categories. Patanjali, according to me, is the most overhyped brand in India," he said.

The brand war

Mariwala, however, credited his rival's achievement of covering the entire gamut of products in every segment of the FMCG (fast moving consumer goods) basket within a short period of time. "(Patanjali) Products which have stronger association with the brand have done well like ghee, atta, toothpaste," Mariwala noted.

Patanjali reported revenues of Rs 9,346 crore for 2016-17, a 100 percent growth over 2015-16. The company did not disclose its profit for the year.

Patanjali claimed that its hair care brand Keshkanti generated sales of Rs 825 crore in fiscal 2017, while the oral care brand Dant Kanti reached a value of Rs 940 crore. The company expects revenues to hit the Rs 20,000-crore mark in 2017-18, though analysts feel this target is too steep considering that rural demand is yet to fully revive.

Patanjali sells its products primarily through its own outlets and plans to increase these to 12,000 in 2017 from about 6,500 currently. It has also stepped up sales pitches for its products in the online marketplace.

Acharya Balkrishna is the managing director and primary stakeholder of Patanjali Ayurved. Ramdev has stated that profits from Patanjali Products go to charity.

Edible oil maker Marico has down the years developed bestselling brands like cooking oil Saffola and hair oil Parachute.

Marico's consolidated profit after tax rose 26 percent year-on-year to Rs 169 crore in the fourth quarter of 2016-17, with its business slowly returning to normal after demonetisation. Consolidated revenue for the quarter was at Rs 1,322 crore, up 2 percent year-on-year.

Infosys and Tata group tussles

With reference to the management vs promoter tussle at the Tata group and Infosys, Marico Chairman Harsh Mariwala told HT Mint that there should be perfect alignment between the promoters and the management. "In this case, I don't think there was an alignment. There is a way to resolve the entire tussle, one need not go public and declare everything. A mediator could have helped in this case," Mariwala said.

Comparing present-day customers with customers during the 1990s, Mariwala noted that there is more demand and competition in the market today to grab the customer's attention. "Due to urbanization, there has been an increase in nuclear families which further increases different types of demand. Earlier families, used to prefer one single brand but now due to changing consumption pattern, demands are also different and changing eventually. Now there are individual brands," he said.

He opined that as wealth grows, there is a movement to higher value-addition products. Every individual wants different things. Therefore we have varieties of products to cater to such demands for example, hair gel, hair serum, etc. "Customers are going up the value chain with wealth rising," Mariwala said.

Asked if he would be looking at selling his own business at some point, Mariwala told Mint, "I will not sell out. That is why I am making the board very strong so that even if I am not there, the board will be running the company and hopefully it will not be sold in the next 50 years."