Campaign India Team
May 09, 2018

Blog: Is brand Patanjali cooling?

Brand Patanjali's ad spends seems to be waning. What's happening?

Blog: Is brand Patanjali cooling?
I am actually missing Baba Ramdev. The media savvy Baba is nowhere quite as visible on TV as he was until a few months ago. Data shows that out of the first 16 weeks of 2018, the Baba’s Patanjali brand was not on the 'Top 10 advertisers list of BARC' for at least 6 weeks. In nine other weeks, Patanjali was between ranks 5 and 10 while in the Week 16, the data shows Patanjali at rank 10, no better.
 
From an average of about 25,000 spots a week across channels a year ago, and sometimes even more, Patanjali now has on an average about 16,000 spots a week, or sometimes even a little less than that. There was a time when it was rumoured that Patanjali was in the market to buy 25-33 per cent of all advertising inventory across all major Hindi news channels. Somehow the Baba seems to have lost some of that insatiable hunger, and much of that famed appetite. Almost around the same time 2 years ago, while Patanjali had 24,050 insertions on TV in the week ended March 25, 2016 (as per BARC), Baba Ramdev himself appeared 234,934 times across TV channels in that week, which translates into being on air every 30 seconds on one channel or the other! Somehow much of that ubiquity and omnipresence seems to be on the wane. Is the Baba and his brand cooling? 
 
Baba Ramdev has always intrigued me. Born Ram Kishen in 1968 in Saidalipur village in Haryana to farmer Ram Niwas Yadav and his wife Gulabo Devi, the young boy suffered a paralytic attack that affected the left side of his face and left him with a visible squint in the left eye. In his early youth, Ram Kishen left for the Himalayas in search of moksha and spent three years near the Gangotri. He returned to Haridwar as Ramdev in 1993 and started teaching yoga.
 
The turning point however came in 2001 when Ramdev started to appear in a yoga programme on Sanskar TV. He was an instant hit despite being slotted at 6:45 am in the morning. In 2004, Ramdev shifted loyalties to Aastha TV which broadcast his yoga sessions live every morning. 15 years later, today, Baba Ramdev owns both Aastha and Sanskar and is the tallest name in yoga by far. There have been babas and gurus aplenty over the years, but what makes Ramdev unique is the ease with which he has managed to seamlessly blend together three very different streams – religion, business and politics. In fact in a cover story two years ago, India Today said, “His political spectrum grows because of the authority he commands in the realm of spiritualism and yoga, which in turn forms the springboard for his business empire. Ramdev is today India's most televised guru, with an FMCG product line that directly connects with the masses - capable, at the same time, of influencing hearts, minds, votes and skin tones”. How true. 
 
Back to our discussion on the relative hiatus in Patanjali spends on advertising, it is possible that having created enough brand salience and more than adequate brand recall, the Patanjali team could well be conserving ad-dollars to support newer launches later in the year. There have been public utterances by people close to the Baba that Patanjali has plans to enter four new domains very soon, and surely within this year: packaged drinking water (tentatively branded 'Divya Jal'), milk and milk products, sanitary napkins, and apparels for women, men and kids. These categories will have their own challenges, and varied target audiences. For example, sanitary napkins will need to go on to GEC channels which is traditionally not where Patanjali has pumped money as it has till date dominated the news genre. Also, apparel will not be easy to market especially if the Baba wants to simultaneously go after women, men as well as kids. Different media choices may need to be looked at. Some of that is already visible with Patanjali buying a lot of digital ad inventory on Hotstar for IPL while it has kept away from TV spots on Star TV.  
 
As it is market watchers were surprised by Patanjali’s entry into atta noodles, lip balm, mixed fruit jam, choco flakes, shaving gel, mango drinks and detergent powder, not categories that followed any linear logic for introduction. Not all new product lines have in any case been adequately supported in advertising. So, there is obviously something quite not right with the Baba’s advertising master plan. He is either over-stretched in the number of product lines he needs to support, or his think tank believes that all categories under the Patanjali banner cannot and should not receive ATL support. It may of course all be in the realm of rumour and fake news but there have been pieces in media talking of Patanjali entering mobile phones as a category. While this may scare some of the Chinese giants who currently dominate this space, such a move currently looks highly unlikely. 
Patanjali’s current advertising spend is around Rs. 600-700 crore, though it looks and feels like double that amount. They say the Baba and his partner Balkrishna are the toughest media negotiators, far tougher than any media-buying agency. However, despite the large spend and the tough-as-nails negotiations, brand Patanjali is starting to get into a penumbra of below-par visibility. 
 
There is also new competition on the horizon. The Baba’s more up-market spiritual rival Sri Sri is suddenly very visible on the IPL matches these days. Market estimates are that Sri Sri’s Tattva brand has bought inventory worth about Rs. 30 crore on cricket this season. The ads themselves are pretty ordinary but the very presence of the brand on a high decibel media vehicle like IPL means that the Sri Sri camp is getting serious about the FMCG business. Of course, the Tattva offering still has a long way to go since the brand has very low market penetration and distribution. But Sri Sri can afford to spend monies from his vast spiritual empire to build the Tattva franchise.
 
So, Baba Ramdev has a potential competitor from his own domain, going forward. 
 
Patanjali has been a disrupter in the FMCG space ever since it first appeared on the scene in 2009. Its turnover zoomed from Rs. 450 crore to almost Rs. 7,000 crore this year. In comparison HUL sales have grown by a mere 4-5% every year during the same time. ITC sales too have remained in the 7-8 per cent range for its FMCG products. Patanjali today has a 6-7 per cent market share nationally and India Infoline Finance Ltd (IIFL) Institutional Equities report estimates that Patanjali will be at 13% all-India market share by 2020. IIFL was not very kind to HUL in its report, saying that 11% of Patanjali’s top-line would have been obtained at the cost of HUL alone. It is also true that Patanjali has hit the sales fortunes of Colgate. For 10 years from 2005 to 2015, Colgate witnessed double digit annual growth till Patanjali’s Dant Kanti toothpaste halted the juggernaut and brought the growth rate down to a paltry 3.7%. The ban on Nestle’s Maggi noodles of course was a God-sent for Patanjali as it eased the launch of its atta noodles. God obviously favors the devout! The Baba does have God on his side: a committed bank of 10 million Aastha/Sanskar devotees are said to be hardcore Patanjali loyalists. And, now that Patanjali has substantially added to its initial self-owned distribution chain and signed up Future’s Big Bazaars, Reliance’s Retail and other partnerships, its market outreach is getting close to those of its FMCG competitors.
 
It will be interesting to watch how Patanjali marshals its resources, conserves its funds, yet fuels its growth. Patanjali already has over 350 products. New launches will impose further demands on the brand. Also the brand-stretch itself needs serious attention as sanitary napkins and mobile phones may not be able to be sold in one brand bouquet. But the Baba has consistently proved marketing pundits wrong. He seems to have a Midas touch. The trough in ad-spends may only be temporary and no indication of what the Baba has in mind in the months to come. Till the political climate stays Baba friendly and till his spiritual charm continues to bewitch millions, Patanjali will continue to flourish giving all the MBAs at HUL, ITC, Britannia, Dabur and other corporate sleepless nights.
 
(Sandeep Goyal looks at market movements very closely. Changing patterns, changing trends always catch his eye.)     
 
     
 
Source:
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