Unilever admits to new competition in Patanjali

MUMBAI: Unilever, the parent of India’s largest consumer goods firm Hindustan Unilever (HUL), has for the first time acknowledged competition in the herbal segment in the country and said the company has been launching products in the “natural” space to fight it.
There are “a couple of great examples” in India in the herbal segment: “Patanjali, which everybody is looking forward to with lot of interest”, and Himalaya, which is “sitting in the natural segment” in the personal care space, Andrew Stephen, head of investor relations at Unilever, said in a conference call with investors last week.

This is the second instance of a global consumer giant publicly acknowledging the growth of yoga guru Baba Ramdev’s Patanjali Ayurved. Colgate-Palmolive in May said the so-called natural segment in India has been growing rapidly and that the company needs to capitalise on it.

Increasing health consciousness and awareness among people about the benefits of using Ayurveda have driven the demand for herbal products in the market.With Patanjali’s rise to become a Rs 5,000-crore company in less than a decade, MNCs, too, have shifted focus to Ayurveda — Colgate, for instance, launched Vedshakti toothpaste, while L’Oreal introduced a hair care range under Garnier Ultra Blends made with natural ingredients.

For HUL, several of its new launches have been in the personal care portfolio, a business that contributed about half the company’s Rs 32,000-crore revenue in fiscal 2016 and about two-thirds of its net profit.

“What we are doing there incidentally is launching several brands... we bought Indulekha, which is a natural positioning in hair oil.

Ayush, which is a brand we’ve had for a long time but very strong in naturals … and Fair & Lovely has got Ayurvedic offerings in the portfolio now,” Stephen said.

HUL has been reporting slowing volume growth in India, largely due to a severe slowdown in rural demand.

During its September quarter performance call with analysts, the maker of Dove, Lux and Rin also said market conditions have softened in India and volumes in skin cleansing segment have suffered from price increases necessitated by rising commodity costs.

In April, Baba Ramdev claimed Patanjali Ayurved had the potential to upstage consumer product multinationals, including, Unilever, Colgate and Nestle.