Baba Ramdev and Acharya Balkrishna's fairy tale growth story (Patanjali Ayurved claims to have become a Rs 20,000 crore FMCG major this year) is coming under the scanner a little too often. While its Amla juice was suspended by the defence canteen stores a few months ago for not meeting quality standards, its hero products such as ghee and noodles were also under the scanner on charges of being impure a while ago.
The latest controversy, however, is the Directorate of Revenue Intelligence seizing 50 tonnes of red sandalwood from a Patanjali representative. The issue here is the suspicion that the company was trying to export Grade A sandalwood when it had permission to export only Grade C sandalwood. The 44-year-old head honcho of Patanjali, Acharya Balkrishna is quite accessible at his office in Haridwar. He meets at least 200 people everyday from different walks of life, but what he spends maximum time on lately, is answering questions on the authenticity of brand Patanjali. He calls it 'shadyantra' or conspiracy by the competition. "Patanjali's strength is purity and authenticity...we offer value for money products without compromising on quality. Consumers are not questioning our purity. Had they done so our products would not have even sold. This is a conspiracy by competition which is finding it difficult to corner Patanjali through rightful means," Acharya Balkrishna had said in an earlier interview with Business Today.
But why is Patanjali consistently in the eye of a storm? The glaring reason that comes to the forefront is lack of transparency. Ask any brand expert or consultant, the spontaneous answer would be that nobody knows enough about the brand and that there is lot of ambiguity.
The company claims to have complete control right from sourcing to manufacturing of all its products and is constantly in the news for setting up state of art manufacturing facilities across the country. But when the label on a Patanjali product shows that it has been manufactured by a contract manufacturer, it obviously raises eyebrows. In fact, the CEO of a leading modern retail company says that the sale of Patanjali products at his stores have dipped by over 30 per cent in the past 6-8 months. The reason for the same is not just quality issues but the company's inefficiency in replenishing the products after they are sold. "Their fill rates are poor and they don't replenish despite reminders," says the CEO of this modern retail company.
The company's fairy tale growth has also made it high-handed, points out a retail industry expert. If you walk into any modern retail store, Patanjali invariably has an exclusive counter where all its products are displayed. The surprising bit here is that Patanjali doesn't pay a penny for this exclusive branding. The retailers have voluntarily given them that space as Patanjali got them footfalls. But no longer, says this retail expert, the Patanjali branded aisles are gradually becoming smaller.
Again, is brand Patanjali over dependent on the Baba and the Acharya? You walk into any room at the Patanjali Yogapeeth or at its food park at Padartha near Haridwar, you are bound to find huge portraits of the duo, even their advertisements have a larger than life presence of the Baba and Acharya, and is not so much about the product per se. Brand experts say that these are issues which further make the brand mysterious and make it vulnerable to controversy. Though the company claims to have hired talent from the best of FMCG companies, Patanjali is unable to come out of the shadow of Baba Ramdev and Acharya Balkrishna. Nobody knows who is the marketing or finance brain in the company. In fact, the company doesn't seem to be going through the conventional route of using executive search firms to hire talent. Most of its top talent claims Balkrishna have been hired informally. "We work like a family...you won't find the typical corporate culture. We hire professionals but when we hire them we tell them about our culture...I have 20,000-odd resumes of people seeking jobs across categories," Acharya Balkrishna had remarked.
Experts feel that Patanjali's long-term brand value could be hampered if the company doesn't re-look at the way it's doing business. The company urgently needs to fine-tune its areas of focus, say experts. Instead of doing so many things, they should only focus on their hero products. But the company is already looking beyond its FMCG business. Patanjali Paridhan, it's apparel brand will be launched later this year and the company is also venturing into solar energy.
Acharya Balkrishna's response to doing too many things in a short time was, "We achieve turnover on the back of our work. Companies work for turnover, our approach is to work hard without a turnover goal. When the turnover happens we plough that money into our various charitable activities, hospitals and universities."
The Acharya says that his growth target is 100% and not 10%-20% which most companies set for themselves. But isn't it a wise idea to have conservative growth targets? Aren't these aggressive targets putting them into uncalled for trouble?