‘We Are Competing Neck And Neck With HUL’
We are working on organic cultivation, where we are planning to work with farmers and do cluster farming as well
Patanjali ayurved has been rated among the top 10 most influential brands in the country by global research firm Ipsos. Incepted in the year 2006, PAL is moving aggressively to depose country’s largest FMCG player, Hindustan Unilever. The man behind the drive is Acharya Balkrishna, the CEO of PAL and also the eighth richest Indian. In an exclusive interview with Himani Chandna, he speaks on an array of issues including allegations of being backed by the ruling party, Bharatiya Janata Party (BJP), company’s expansion plans and growing competition around ayurveda products. Edited excerpts:
You have made ‘avurveda’ a fashion. What is your next target?
Our next target is organic food. We are working on organic cultivation, where we are planning to work with farmers and do cluster farming as well. We are working on new fields. I am pretty sure no company, till date, has focussed on the segment. We will start our own cultivation of organic food by creating clusters of farmers and also under co-operatives.
It is alleged that you are backed by ruling party Bhartiya Janta Party, which makes marketing your products a lot easier or you?
This is false. The truth is, our strength was made during the Congress regime. The only difference between both parties is that the government’s work is not to create hurdles when an organisation is doing good work and for a good cause. Congress tried to malign our image, and created obstacles in whatever we tried to do. We haven’t taken any favour from the BJP government and nor do we believe in favouritism. This government believes in creating ease of doing business. Now citizens have understood that we were being trapped by the UPA government and hence, they are showering love and trust on our products.
The word in the market is that PAL is not run professionally and that your staff offers ‘seva’ instead of following professional ambitions…
This thought is absolutely baseless. We were not hiring from business schools till now as we wanted to first create world-class infrastructure, and then hierarchies. Now we are done with the process of creating organisational structure and we would start filling freshers into the system.
Only the top-level leadership, including 10 to 15 leaders, does not draw salary, otherwise everyone takes home decent salaries. Our monthly salary budget is Rs 20 crore to Rs 25 crore. At PAL, the culture is ours, but we have hired many people from MNCs who are free to follow their own professional ethics. We have a well-built team of professionals, probably one of the finest in the industry.
You are among the top five advertisers on television. In several surveys you have surpassed biggies such as Ponds and Reckitt Benckiser in terms of commercial presence on television. What is your ad budget?
This is a trick. We are taking help from agencies and channels and they know we are serving the nation. We manage to get discounted rates after harder negotiations. We are competing neck and neck with the biggest advertiser, HUL. Strangely, our ad budget is much less. Multinational companies spend about 15 per cent of their revenues on promotions, but our budget is just 2 to 2.5 per cent. I am directly involved in slot buying, and we take care of timings. We are contributing towards society and operate in a simple environment. We get benefit as we are working for the society, and we ask channels and agencies to work for the same motive.
After Nestle’s Maggi fiasco, sales of Patanjali Noodles gained momentum. However, it seems to have lost its sheen now. Are you planning to eliminate some of your products that aren’t very popular?
The demand for our noodles exceeds supply. We are leading in most of the categories and will continue to lead. We have not eliminated even a single product from the market as all are doing fine. About 99 per cent of our products are manufactured in our own factories, and in the coming years, we will eliminate loan licence arrangements as well.
Are you scared of the growing competition around you?
In fact, I laugh at the half knowledge of these multinational companies that are trying to survive the ayurvedic fad. They must understand that we have a very strong basic knowledge. The only thing we wanted to do is to build a strong research and development team. But we cannot hire people randomly, as this field needs specialisation. It is not easy to gain vast knowledge of herbs and their active compounds, identification and the analysis of these compounds. It is a very tough job, and I wish these MNCs good luck.