Brands feel compelled to take the natural and ayurvedic route to appeal to a new consumer market
Fast moving consumer goods (FMCG) behemoths are lapping up grandma’s wisdom. Recently, two global brands, Nestle and HUL introduced breakfast products for the India market using native ingredients like jowar, millets and cow’s ghee. The messaging by these brands has focused around the indigenous ingredients often consumed in any Indian household and signifies the increasing pressure that FMCG and food brands are facing towards 'natural', 'ayurvedic' and 'herbal'.
It is not a niche anymore, says Harminder Sahni, founder and managing director, Wazir Advisors, referring to the market for natural and ayurvedic products. “Natural, herbal, organic and ayurvedic constitutes the mainstream market today, be it in urban centres or in the smaller towns.” HUL, in fact, has been taking huge strides in the Ayurveda category, through its Lever Ayush brand, bringing out personal care products containing neem, turmeric, saffron, clove, ghee and shikakai. Colgate-Palmolive meanwhile has introduced toothpaste brands containing native herbs and ingredients like tulsi, neem, clove, amla, etc.
This sudden thrust by the MNCs towards natural has to do majorly with the rise in home-grown FMCG brands that vouch by Ayurveda and herbal. Experts say brands like Himalaya, Dabur and mainly Patanjali identify with natural as their core with their entire product lines derived from herbal and ayurvedic ingredients.
According to Sahni, although Himalaya, Baidyanath, Vicco Labs and Dabur have been around for decades, the aggressive marketing and growth by Patanjali and Baba Ramdev have forced MNC brands to bring out natural products, or else lose market share.
“Typically, brands use celebs to promote products. In Patanjali’s case, the brand’s founder Baba Ramdev was already a celebrity. This also worked in Patanjali challenging established MNCs head-on,” says Sahni.
Secondly, consumers today are increasingly scouting for herbal and ayurvedic products to stay fit and healthy and to keep chronic ailments at bay. This is another factor positively impact the natural play.
A report by market research firm Nielsen states that the natural segment constituted 41% of the Rs.44, 790 crore personal care segment in India in 2016, up from 37% earlier. Naturals, which includes herbal, ayurvedic and organic products, is growing at 6.6% annually.
“The consumer behaviour certainly shows a movement towards natural and ayurvedic products. This is connected with the conscious attention towards improving health. The overall increase in awareness about Ayurveda, yoga and wellness is more than just a trend and is here to stay,” says Tej Katpitia, CEO, Sri Sri Tattva, a natural FMCG brand of spiritual guru Sri Sri Ravi Shankar.
A third reason that’s compelling MNCs to embrace natural is the surge in new-age brands and startups in India like Kama Ayurveda, SoulTree, KivaShots, Yoga Bars, which are focused around natural and are creating ripples in the market. A brand like Sri Sr Tattva, for example, is not only selling its products through modern retail and e-commerce but is also launching its own retail stores of about 1, 000 (by 2018 end) through the franchise route.
“This is a double whammy for MNCs. Products such as toothpastes, shampoos, soaps and food products, etc. from home-grown brands can easily displace their MNC counterparts; especially if these products are available both online and offline through modern retail and special outlets,” says brand strategist Harish Bijoor. According to Harish Mohan, founder of Sipwise Beverages, a startup that makes beverages from “natural’’ ingredients like brahmi, ashwagandha and gotu kola, the market is set for explosive growth. “Over the past few years, Ayurveda has seen a revitalisation due to the fact that carries no side-effects. We are seeing great demand for our herb coolers. Customers are thrilled to find herbs infused in their drinks.”
THE TRICK
- A sudden thrust by the MNCs towards natural has to do majorly with the rise in home-grown FMCG brands that vouch by Ayurveda and herbal
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