Patanjali Ayurved, maker of ayurvedic consumer products, is the fastest growing consumer company in India.
Patanjali Ayurved Limited, located in the industrial area of Haridwar, is an Indian industrial company. This unit was established for manufacturing pure quality and scientifically developed mineral and herbal products.
A report by investment banking company CLSA, Wish you were listed: Patanjali Ayurved, shows that Patanjali is bigger than Emami and Jyothy Labs, is perhaps the fastest growing fast-moving consumer company in India, and had revenue in excess of INR2500 crore(US$370 million) for 2014–15.Patanjali Ayurveda’s annual turnover for the year 2014-15 increased to INR2500 crore (US$370 million) as compared to previous turnovers of INR1200 crore (US$180 million) (2013-14), INR850 crore (US$130 million) (2012-13) and INR450 crore (US$67 million) (2011-12)
Acharya Balkrishna established Patanjali Ayurved Limited in the year 2006 taking inspiration from Yogrishi Baba Ramdev for the objective of establishing science of Ayurveda in accordance and coordinating with the latest technology and ancient wisdom.Patanjali Ayurved was first started by manufacturing medicinal products. Gradually they have expanded their range from medicines to food items and cosmetics.
Baba Ramdev chose the path of swadeshi and by establishing Patanjali Ayurved he presented an indigenous option to buyers, on the other side he gave competition to different FMCG companies.
Patanjali Food and Herbal Park is the production unit of Patanjali Ayurved situated at Padartha on Haridwar-Laksar road.
Patanjali Ayurveda has a plan to build various units in India as well as in abroad, in this context work has already been started in Nepal.
Patanjali Ayurved has increased their outlet from 150-200 in 2012 to 4000 in 2015. Patanjali is also selling their products online.The company is also planning to open Patanjali Ayurveda outlets at Railway Stations and Airports
Here 10 takeaways about the company:
1. What is Patanjali Ayurved: This is a company formed by Baba Ramdev in 1997. He collaborated with Acharya Balkrishna, a scholar of Ayurveda, Sanskrit and Vedas in 1990s to manufacture ayurvedic medicines. Ramdev focused on Yoga while Balkrishna assumed responsibility of spreading Ayurveda medicine.
2. Revenue: Patanjali Ayurved is perhaps the fastest growing fast-moving-consumer-goods firm in India with annual revenues reportedly at more than Rs 2,000 crore. Ramdev is reported to have said in one of the interviews ithat he expects to take the revenue to Rs 10000 crore.
3. Discount and profits: Credit Lyonnais obersves that most of Patanjali products are available at an attractive discount to competition. The company sources products directly from farmers and cuts on middlemen to boost profits. It makes 20% operating profit. This is the difference between total income and expenditure.
4. Ownership: Baba Ramdev does not hold any stake in Patanjali Ayurveda Ltd. Balakrishna is believed to own 92%. The balance 8% stake is held by Sarwan and Sunita Poddar, a Scotland-based non-resident Indian couple. The two are associated with the UK Trust of Patanjali and have donated land in UK.
5. Food park: Patanjali Food and Herbal Park was established in 2009 under the food park scheme of the Indian government. The company reportedly commissioned one of the largest food parks in the world at a total investment of Rs 500 crore. The food park is spread across 100 acres and provides employment to over 6,500 people.
6. Distribution: Patanjali products are sold through three types of medical centres. These include Patanjali Chikitsalaya which are clinics along with doctors, Patanjali Arogya Kendra which are health and wellness centres and Swadeshi Kendra, non-medicine outlets. A typical Patanjali centre is 500 to 1,500 square feet in size. The group has 15,000 exclusive outlets across India. They plan to grow to 1,00,000 outlets in next few years. They also distribute through general retail stores.
7. Store profits: Patanjali has 5,000 franchisee stores. Retailers told CLSA that their average gross turnover is Rs 25,000 every day. Profit margins for retailers are 10-20% across product categories.
8. Word of mouth publicity: Consumer companies typically spend 12-20% of revenue on advertising and promotions. When a new company gets into the business, this spending is significantly higher. Patanjali has followed a unique word of mouth publicity model and the entire revenue is without any advertising.
9. Advertising agency appointed: Things are changing though. Patanjali has hired two top advertising agencies McCann and Mudra to prepare the business for the next phase of growth.
10. FMCG competition: The company is privately held and profitable. The revenue for 2014-15 of Patanjali Ayurved is bigger than Jyothi Laboratories, the maker of Ujaala and Emami. These brands have been in business for decades.