India: Yoga guru Baba Ramdev's company set to compete with Nestle and Nike

Consumer goods company, Patanjali Ayurved Ltd, founded by yoga guru Baba Ramdev is expanding its presence across the country with a long list of products, ranging from herbal tea, fruit juices to toiletries. Founded in 2006 in association with Ramdev's confidante, Acharya Bal Krishna, the company is set to compete with some global brands such as Nike and Nestle that operate in India.

Patanjali this week launched a noodle brand to take on Nestle's Maggi, which was earlier banned in the country because of high lead content. In August however, the ban was lifted by the Bombay High Court. The yoga guru's company is also planning to introduce a yoga-wear collection, which could give direct competition to sportswear brands like Nike and Adidas, according to Quartz.

Patanjali's products are available in over 177,000 retail stores and the company is looking forward to partnering with retail giants to reach a larger audience. The yoga guru has in October this year, inked a partnership with the Kishore Biyani-owned Future Group for the distribution and promotion of his company's products.

After the alliance he told reporters, "Our effort is to promote 'swadeshi' [made in India] and give a tough fight to MNCs." Future Group with a presence in more than 95 cities is one of India's largest retail chains.

The 50-year-old yoga teacher also said that his company would cater to India's growing middle class, which is developing a taste for western flavours, by launching new products like packaged pasta, oats, muesli and juices.

"When we crossed the Rs 2,000 crore [£197m], we created waves. In this fiscal, we may cross even Rs 5,000 crore," Ramdev said in an interview. Meanwhile, Arvind Singhal, managing director of Technopak, a management consultancy, said that if Ramdev's company were to reach its estimated turnover of Rs 50bn (£495m, €707m, $756m), it would be among the top five FMCG companies in the country. "With its recent announcement to enter more product categories — yoga apparel, baby and children's nutritional foods etc — it is poised to enter the top three in the next two to three years if its current spectacular growth rate continues."

Branding

Advertising and marketing is an important driver for brand creation with a typical FMCG company spending about 10-15% of its revenues on the same. However, Patanjali had negligible spending as "[it] relies mainly only on endorsement by Baba Ramdev and his disciples and instructors," according to Investment banking company CLSA.

The Haridwar, Uttarakhand, headquartered company has the potentials to reach an audience of more than 200 million people who are directly or indirectly linked to Ramdev's yoga programme, CLSA stated.

About Baba Ramdev

Born in 1965 to a poor family of farmers. In the late 1990's he and his friend Acharya Bal Krishna, started conducting yoga lessons and performed religious ceremonies in clients' homes. They used to travel around on bicycles.

Today, the yoga guru's empire in the city of Haridwar alone spans an ayurveda medical school, a hospital, a food park, a research institution and a cosmetics manufacturing unit. He has also reportedly purchased an island in Scotland for £2m to set up a wellness centre.