Is Baba’s charm waning on the Indian Consumer?

With India’s go-to yoga guru Baba Ramdev as its face, Patanjali blew apart the FMCG market baffling ever-present giants. But in 2019, the swadeshi fervour is dipping in connect with the customer.


  1. Ramdev-led Patanjali scaled exponentially and became the biggest player in Indian FMCG segment and targeted doubling to Rs. 200 billion in FY 2018.
  2. But reality came biting back as Patanjali’s sales slumped to 81 billion rupees, a dip of 10% as per its annual fiscal report.
  3. As per Reuters reporting, the number dropped even further in 2018 when its sales stood at a Rs. 47 billion in 9 months.
  4. Patanjali’s unhindered, but unstructured ambitions without a long-term vision resulted in a number of wrong business moves.

Ramdev seen here promoting his own version of instant noodles on the lines of Nestle’s successful Maggi label. | Credits: QZ

Unprecedented domination within a decade saw India’s favourite yoga guru Baba Ramdev become the entrepreneur behind the fastest growing FMCG company. Basing products on a strong swadeshi sentiment, Patanjali resonated with the middle and lower-middle class which gave up the brand value to trust the Ayurveda tag.

The empire that Ramdev co-founded with his old ally Acharya Balkrishna rode high on the nationalistic sentiment that took over the country post BJP coming into power in 2014. Ramdev asked his loyal following of millions to denounce the factory made, researched and developed by MNC products for his made in India breed of elixirs for mind, body and home.

The products were not just touted as better than the conventional FMCG for the natural ingredients but it created disruption with dynamic pricing which was affordable and appealed to sections across the society.

Yoga-inspired jibes from the brash Baba

The frugal and ascetic Baba Ramdev came out mocking the traditional structure of the FMCG industry and took a jibe at the MNC giants in the sector. The saffron-clad yoga guru had said in 2017, “Turnover figures will force multinational companies to go for kapalbhati.”

Ramdev-led Patanjali climbed the ladders of ambition multiple steps in single strides and put out a sales target that would double to Rs. 200 billion in FY 2018. But reality came biting back as Patanjali’s sales slumped to 81 billion rupees, a dip of 10% as per its annual fiscal report.

Patanjali’s sales slumped to 81 billion rupees, a dip of 10% as per its annual fiscal report.

As per Reuters reporting, the number seems to have dropped further in the last year when its sale in 9 months till December 31st 2018 stood at a modest Rs. 47 billion based on information from Patanjali to CARE Ratings in April.

The men behind the ‘elixirs’

Baba Ramdev emerged in a different avatar from the traditional godmen who’ve been revered traditionally in India. He became a celebrity with millions of middle-class families attending his seminars on yoga and watching them on TV.

Naturally, he became a highly successful brand ambassador for Patanjali, which needed no other face as it spread to every nook and corner of India. Baba’s unassuming bearded face with an, innocent smile attracted millions to his flagship standalone stores and dedicated aisles in supermarkets. His customer base spread across metropolitans, tier 2 & 3 cities and villages alike.

DKODING | Acharya Balkrishna (far right) holds 98.55% of Patanjali’s shares, as per 2018 filing. Seen here at a Yoga Book launch with Baba Ramdev and current Home Minister Amit Shah. | Credits:

Ramdev might be now categorized as an entrepreneur, but his friend and business partner is the main man behind the empire and also the name on paper – Acharya Balkrishna owns 98.55% of Patanjali’s shares, as per it’s 2018 company filing. His net worth stands at $4.9 billion, as per Forbes.

The dip in Product worship

As per Patanjali, it boasts 3,500 distributors supplying 47,000 retail counters spread all over the country. Initially concentrating on Ayurvedic pain relief and skin care products, Patanjali exponentially expanded its range to foods like instant noodles, breakfast cereals, to kitchen stores, home products, cosmetics and clothing.

The expansion which now sees the brand offering over 2,500 goods has affected quality as scaling was based on third-party outsourcing of production. A number of products available in Patanjali stores and aisles are partially or wholly manufactured by third party Indian firms.

In Reuters’ interviews with current and former employees, suppliers, distributors, store managers, and consumers tell the tale of how Patanjali’s unhindered, but unstructured ambitions without a long-term vision has resulted in a number of wrong moves.

Patanjali’s unhindered, but unstructured ambitions without a long-term vision has resulted in a number of wrong moves.

DKODING | Patanjali’s annual revenue dipped to INR 81 billion in 2018 after touching INR 100 billion in 2017. | Source: Statista

In spite of Baba Ramdev being a huge patron of the BJP government, the construction of Patanjali’s factories were dogged by delays in the Make in India era. As per the company, a food unit in Maharashtra which was scheduled to be operational by April 2017 and an ayurvedic products factory near Delhi due by 2016 have now been pushed to dates in 2020.

Microorganisms for health?

The inconsistent quality and lack of testing was brought forth in a 2017 incident where Nepal’s drug regulatory authority Department of Drug Administration tested six Patanjali medical products as containing microorganisms above the maximum levels.

In 2017, Nepal’s Drug regulator found six Patanjali products contained microorganisms above maximum permitted levels.

Patanjali has denied this, citing that its Central Lab is approved by India’s national laboratories accreditation board.

Patanjali’s products come under the regulatory radar of two different categories. Its Ayurveda range is under the Ministry of Ayush, which was established by the NDA in 2014 as an organ of bringing in and promoting alternative therapies and indigenous medicine.

Its range of processed foods come under the regulatory purview of Food Safety and Standards Authority of India (FSSAI) which states that tests and assessments are only undertaken when it perceives clear safety concerns.

Impending issues and unpaid partners

In lieu of interviews and letters reviewed by Reuters, there are partners and product suppliers who are moving away from partnerships with Patanjali due to delayed payments which has accrued substantial sums that Patanjali now owes to them.

Patanjali, reportedly started deferring payment timelines in 2017 and delays in some cases reached almost six months in 2018.

Shop owners and supermarket employees point out a drop in Patanjali stock orders noting that there is a decreased demand among customers. A big factor here is also the entry of major FMCG players like Hindustan Unilever and Colgate Palmolive India into the ayurvedic segment, giving customers much needed choices.

DKODING | Patanjali’s television ads dipped from being 3rd highest in India in 2016 to out of the top 10 in 2018. | Source: BARC

The effect of decreasing market share after a sudden but short-lived domination has also affected the companies spending on advertisement and publicity.

With consistent advertisements starring Baba Ramdev on TV, Patanjali emerged as the third highest spender on TV ads in 2016. But in 2018, it did not even feature among the top ten advertisers. Patanjali employs roughly around 25,000 people but as per sources, it has axed hundreds of employees since mid-2017.

The Political Gambit

Ramdev has been a vocal supporter of PM Modi, since his first-time election in 2014. Yoga became a common ground of affection between Ramdev and PM Modi who himself practices yoga and enthusiastically asked the country to endorse the form of exercise in TV appearances performing ‘Aasans’.

Ramdev’s backing and messaging aligned with the BJP’s narrative factored in turning his loyal followers into voters for the NDA. As per a Reuters report from May 2017, Patanjali Ayurved benefited from discounts in land acquisitions in BJP-controlled states worth an estimated $46 million.

DKODING | PM Modi and Baba Ramdev share a mutual affection for Yoga. Ramdev is also a vocal supporter of BJP. | Credits: Reuters

But seeing diminished returns, Patanjali expressed unhappiness around the economic policy of NDA, stating that demonetization had impacted consumer spending while at the same time the new tax framework hit costing and pricings of inputs and products.

Ramdev still backed BJP politically and endorsed the party during the 2019 Lok Sabha election campaign urging people to vote for Narendra Modi, whom he called “the pride of mother India”.

Diversification isn’t working

After rising in different aspects, Patanjali planned to  sell SIM cards, solar panels, bottled water, phones and even jeans. Balkrishna revealed in a statement that the diversification is working as expected, where he said,
“Solar is good. Our apparel division is going… We have big plans for bio-organic products,”

Patanjali’s Indian-made messaging app Kimbho which planned to rival widely used messaging application Whatsapp came as a big flop and was inspected for number of privacy flaws which forced Patanjali to halt the venture in between. Patanjali said that the project had not been dropped but only stopped for the time being.

But with dipping revenues, quality related issues influencing customers to look at other options, the entry of FMCG giants with their own Ayurveda product lines, and unsuccessful diversification has marred Patanjali’s ambitious targets. Baba and his ally need a new game plan to resonate again but prospects of similar Swadeshi-inspired domination are unlikely.


  1. Patanjali’s rapid expansion which relied on outsourcing of products to other manufacturers has affected the quality standards.
  2. The inconsistent quality was exemplified in 2017 when Nepal’s drug regulator found six Patanjali medical products contained microorganisms above the specified levels.
  3. As per a Reuters report from May 2017, Patanjali benefited from discounts in land acquisitions in BJP-controlled states worth an estimated $46 million.
  4. Despite diversification, a number of Patanjali ventures have failed to live up to market hype and some like Kimbho messaging app have been stopped indefinitely.

By: Chitresh Sehgal, Senior Editor, Dkoding Media

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DKODING as the name suggests is on a crusade to bring out the ‘OTHER SIDE OF THE STORY’ in a world drowning in fury and frenzy. It provides deeper insights and perspectives beyond NEWS.

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