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The one reason why I believe Patanjali can’t be a strong brand forever

Patanjali has been a well known name for many households for being the Baba Ramdev brand. As the comedian Kunal Kamra puts it, Baba came in with Yoga agenda, and then suddenly before anyone realised he started selling Patanjali branded items as “made in India”, healthy alternatives to MNCs. Whatever values that people associated with Baba Ramdev as the Yogi, the health expert, the all natural baba, they got extended to the products that he represented as the brand ambassador.

The circumstances under which Patanjali grew are unconventional and the growth, of course, was phenomenal. Its interesting how they rode on the ayurveda wave and managed to sweep up market share after market share across categories. In a short while, they managed to launch over 20 new FMCG products, ranging from toothpaste, shampoo and other personal care products to noodles, cornflakes and other food products.

This just goes to show the latent demand in the country for products deemed “natural”. When Patanjali entered, finally the consumer had an “all natural”, “herbal” option. Now, herbal or not, Patanjali made a lot of product promises which I have not validated, and I do not endorse those products here. But my point here is that Patanjali made a lot of promises as a brand and spread itself across various categories, without much thought.

Usually, when brand equity is formed, it means you hold some space in the mind of the consumer. It is like real estate of the mind. And that space looks like something to the consumer. The consumer has an image of your brand and a perception about you. What Patanjali took advantage of as a herbal product image, was now extended to processed foods like noodles, cornflakes, etc. It is debatable as to how products like Noodles and cornflakes fall into a herbal brand umbrella. The consumer is bound to be confused with the image. There is a strong dissociation.

This is a classic case of brand dilution. And this is the one reason why I believe the brand Patanjali is not here to stay.

Now, Patanjali woke up the latent demands, and created this new category. It would be a gross mistake if one believed that all other giants would take it lying down. All other FMCG biggies, woke up too, albeit late. So, now you see a huge rush in a category which was deemed niche earlier. The big spenders and big brains have started rolling out their big guns. The results are already looking to show.

The company which has been doubling its revenue 2013, has finally shown signs of slowing down. Its growth tapered down to a single digit sales volume growth of 7%.

I believe it would only be a matter of time till other brands sweep in and take back what Patanjali snatched from them while they were sleeping.

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