The COVID-19 pandemic has accelerated the preference, and hence the demand for Ayurveda and ayurvedic products in the past year. Not surprisingly, most consumer companies, large and small, have also started launching more products under this vertical.
One such company capitalising on this opportunity is FMCG major Dabur. The firm, which calls itself a science-based Ayurveda company has always had a presence in this segment. With COVID-19 increasing the demand for this segment, Dabur said it saw an increased interest in its products in the past year. Capitalising on this opportunity, the company is now launching a slew of products under its existing brands, with a special focus on its healthcare business segment.
"During COVID-19, we found that we're in a space where we can address the gaps and offer the consumer something that is missing today in modern medicine. Dabur has the knowledge, the know-how, and the competency in this space," Mohit Malhotra, CEO of Dabur told CNBC-TV18.
Dabur has three verticals under which it operates its brands: food and beverage (F&B), healthcare and home and personal care. In the January-March quarter of FY21, healthcare contributed 33.9 percent to Dabur's revenues, while HPC contributed 51 percent and F&B 15.1 percent. For the full fiscal of FY21, healthcare contributed 39 percent to revenues, up from 33.9 percent in FY20.
"In the last year, with consumers shunning discretionary purchases, the F&B vertical went down a bit, and so did personal care, while healthcare shot up to nearly 40 percent,” Malhotra added.
The company now expects the healthcare pie to increase to 40 percent, sustaining at those levels for the next two years. In five years, the company expects 50 percent of its revenues to come from healthcare.
Malhotra told investors during the Q4 results call that in a single year, the company added Rs 500 crore to its health supplement portfolio, which includes brands such Dabur Honey and Dabur Chyawanprash.
For its ayurvedic specialties segment in the healthcare vertical, the company is aiming to become the market leader by increasing its market share from 25 percent currently to 50 percent.
Dabur aims to achieve this with a slew of new product developments (NPD) across its eight power brands: Dabur Real, Dabur Lal Tail, Dabur Chyawanprash, Dabur Honey, Dabur Amla, Dabur Red, Dabur Pudin Hara, and Dabur Honitus. The expansion will be focused on product extensions and adjacencies within these brands, Malhotra said.
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Under Dabur Chyawanprash, for example, the company is looking at extending it's beyond the current paste-like format to more formats like a capsule or tablet form. For Glucose, it is looking at launching a capsule format. It has recently also launched it in a sachet form targeting rural markets.
Also, Honey will see the addition of value-added variants. Over the past few months, the company has launched a few variants like Dabur Honey Tulsi, and organic honey variants on e-commerce. It is now looking to launch a Sitopaladi Honey variant soon.
With cough being one of the significant symptoms of COVID-19, the company also sees demand for its cough syrup product Dabur Honitus. In fact, it expects Honitus to become a Rs 100 crore brand soon.
A similar expansion approach will be adopted under its other power brands as well. While some of its power brands like Amla, Real, and Red (Oral care) are already Rs 1,000 crore brands, the opportunity for the others is what defines the power brand, Malhotra said.
"For brands like Pudin Hara, the opportunity defines the power brand. Healthcare presents a multimillion-dollar opportunity and so we see a huge opportunity to take market share here. While the Pudin Hara brand is currently around Rs 50 crore, I feel the potential is huge. Under Lal Tail, which is our baby care brand too, our presence is limited, but the space is huge. So we have launched several products in this segment on e-commerce," Malhotra added.
Beyond power brands, the company will also be expanding its ayurvedic specialties portfolio, where Malhotra said Dabur already has around 400 products that offer solutions for various health issues from heart health, blood pressure, to fungal infections.
"We only have 25 percent market share in this space and there are a lot of small regional players in this segment. We want to expand to become the market leader here. So in every sub-segment, we are launching product expansions in this vertical. We also launched Churnas recently. Currently, there are 7 and we have a huge plan to expand the portfolio," Malhotra said.
The company aims to expand its share in the ayurvedic specialties space to at least 50 percent to build a formidable presence and become the market leader in this segment.
"The basic idea here is to use innovation, distribution, and higher visibility to make Ayurveda mainstream," he said.
(Edited by : Jomy Jos Pullokaran)