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How to build a FMCG brand

31 October 2017

Dibyajyoti Sarma reviews Priyanka Pathak-Naraina's book about one of India's most successful gurus

Like it or loath it, Baba Ramdev is a brand name, someone akin to Steve Jobs, perhaps more for his legion of followers. In India, being a popular yoga guru is not a tall order, if you are smart and savvy and are willing to experiment. This is what Baba Ramdev did, when from being a small-time yoga instructor in Haridwar, he metamorphosed into a TV star in 2002, first in Sanskar TV and then Ashtha TV.

ramdev Patanjali Ayurveda multiplied 15 times from Rs 317 crore at the end of 2010-11 to Rs 5000 crore in 2015-16

Fast forward a few years, Baba Ramdev now owns both the TV channels. This is a small achievement compared to what Baba Ramdev has achieved with Patanjali Ayurveda, a purportedly home-grown FMCG brand, giving established brands like Unilever, Colgate and Nestle a run for their money.

The numbers are enviable. Revenues at Patanjali Ayurveda multiplied 15 times from Rs 317 crore at the end of 2010-11 to Rs 5000 crore in 2015-16. In May 2017, the number was a staggering Rs 10,000 crore. The target is Rs 20,000 crore by May 2018.

So, how does a son of a poor farmer from Said Alipur, Haryana, born Ram Kisan Yadav, with no available date of birth and little to no formal education, manages to amass this massive wealth? And, not to forget that he is a sanyasi in saffron.

This is a classic rag to riches story, rivalling another brand name Dhirubhai Ambani, with controversy, court cases, political manoeuvring, and studied silences thrown in equal measure. In the book Godman to Tycoon: The Untold Story of Baba Ramdev, author Priyaka Pathak-Narain attempts to untangle the mysteries surrounding the rise of Baba Ramdev and his Patanjali brand with journalistic flair. The book reads like a fast-paced thriller with the inscrutable figure of Baba Ramdev at the centre with the people who knew him in the past narrating the story while his own voice remain conspicuously absent.

This is understandable. It is understandable that Pathak-Narain’s story has a few gaping holes, which perhaps cannot be filled considering the immense influence Baba Ramdev wields. Still the book gives us a fascinating account of his rise and founding of a business empire and introduces some of the other key players, especially Karamveer, his early mentor who helped Baba Ramdev secure a foothold in Haridwar and Acharya Balkrishna, once his junior in gurukul, now his closest aide and the 26th richest Indian, with a personal wealth of Rs 25,600 crore, according to the Hurun Rich List 2016.

Yet, as the book ends, you remain clueless how Baba Ramdev did it. There are some hints and lot of hearsay. But look beyond the purported ideology of Patanjali Ayurveda as a company manufacturing made in India products, you will witness a man’s unwavering ambition to reach the top and his willingness to go to any lengths to achieve it. There’s is also Baba Ramdev innate common sense and his ability to charm people. Anyone who has seen him in television will vouch for it. Along with it, what strikes you the most is Baba Ramdev’s ability to associate himself with people who can help him achieve his ambition.

So, Baba Ramdev arrived in Haridwar and together with Acharya Balkrishna, joined Karamveer, a yoga teacher. He mastered the art and in 1995, all three started Divya Yog Mandir Trust, with the mission to teach yoga to the masses. This was the beginning.

THE CEO

This uncanny ability of Baba Ramdev to find the right person for the right job is evident in the chapter titled The CEO. Patanjali Ayurveda Limited was established in 2006 and in the next five years, the company moved up from yoga and Ayurveda medicine company to a food processing company, manufacturing everything from spices and soaps. In 2011, the company reported the first doubling of its revenues, from Rs 167 crore to Rs 317 crore.

But the company hit a roadblock when on April 2011 the top brass managing the Patanjali food park resigned en masse. To add that, there was the Ramleela maidan fiasco and investigations, including one against Acharya Balkrishna regarding a fake passport. To combat the dire situation, Baba Ramdev hired SK Patra, the then CEO of Bhanu Firms, a food processing venture.

When Patra joined, Baba Ramdev had four trusts, thirty four company and large landholdings. The whole thing was a mess with CBI breathing down the neck. The way Patra narrates the events and how he changed the workings of the company makes for a fascinating reading. It is a lesson for all packaging converting companies in India.

The company had money and they were itching for investments. So they had set up many plants, some yet to be opened. They had also purchased top-of-the line manufacturing equipment which were yet to put into service.

The first problem Patra noticed was the lack of professionalism, as if the company was built from top up. They had a generic FMGC plant without a clear idea about what to manufacture and how.

Patra’s first job was to bring in professionalism. He invited experts from multinational companies and gave them targets to build standard operating procedures (SOP) for each machine in each plant, directing plant managers about the smallest of details. It took a year.

Then there were infighting. Soon, Patra set up committees covering every aspect of business from purchasing to production to market research, and created schedules from mandatory meetings.

Patra’s next task was marketing and sales. Until then, Baba Ramdev was reluctant to advertise his products. Patra convinced him. Even though actual ad spend of the company did not start until 2015.

Pathak-Narain writes part of the secret of Patanjali’s success is its threefold distribution network that Patra helped build. He analysed the distribution contracts of the large FMCG multinationals and finally created Patanjali’s own model.

Patra’s efforts began to pay almost immediately. Patanjali’s turnover increased to Rs 446 crore in 2012 from Rs 317 in 2010-11.

By 2013, Patanjali had more than 500 products. Then Patra introduced the cheapest honey and it swept the market. Soon they started thinking about ghee.

Yet, it was a Baba Ramdev show through and through and by 2014, Patra had left the job, which is a rather unpleasant tale.

The rise of Patanjali brand, as of today, looks unstoppable. 

Goodman to Tycoon: The Untold Story of Baba Ramdev

By Priyanka Pathak-Narain

Juggernaut, 2017

Pages 238

Price 299

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