When Dabur India announced that it was entering the malted food drinks (MFD) market in October last year, it took many by surprise. For one, Dabur’s healthcare portfolio comprised products that were mainly Ayurvedic in nature and MFD was a more ‘modern’ format. For another, the company was hoping to take on multinational rivals such as GlaxoSmithKline Consumer Healthcare, Cadbury India, HJ Heinz Co and Nestle India that had a firm foothold in the market besides being hard nuts to crack. But then, Dabur is no pushover and has already set sights on capturing 10% share of the Rs 1,900-crore MFD market in the next two years with Dabur Chyawan Junior, that went national late in December 2008. And spearheading the campaign is KK Rajesh, executive vice-president, marketing (healthcare). In this interview to Alokananda Chakraborty of FE, he talks about the demands of the new Indian consumer and lays down the company’s plans to negotiate the tricky waters of healthcare products marketing. Excerpts:
What was the reason behind segmenting the Chyawanprash market on the basis of age? What is the key differentiator for Dabur Chyawan Junior and what kind of brands is it pitted against?
Dabur is not segmenting the Chyawanprash market on the basis of age. Our effort is to make Chyawanprash relevant for all age groups and our campaigns have always been aimed at establishing this universal relevance of Dabur Chyawanprash. For ages it has been believed that Chyawanprash is used either by the old aged or by kids; so we are trying to make it more relevant across age groups by bringing in teenagers into the fold.
Chyawanprash has always been known as the health giver and the elixir of life. Consumers see Chyawanprash as a problem solving product and an age-old Ayurvedic remedy that improves immunity. While mothers feed their kids Chyawanprash, the kids—once they grow up and reach their teens—generally move away from the product, and come back into the fold once they cross the thirties. While they know that Chyawanprash helps in overall development and building immunity, there was a perceptible disconnect with the product in their teens, and we have tried to address that in two ways.
First, we have signed on India’s youth icon and Indian cricket team captain Mahendra Singh Dhoni to endorse Dabur Chyawanprash. Dhoni, we are confident, will help bring a lot of teenagers and pre-teen consumers back into the Chyawanprash fold.
That said, kids mostly find the sharp taste of Chyawanprash not very palatable. So, we have expanded the range with the introduction of Dabur Chyawan Junior, which offers similar benefit of immunity but in a tasty chocolate-flavoured granular form. This helps address the taste barrier among kids.
Chyawan Junior contains more than 35 active Ayurvedic herbs; it has ingredients such as amla, which is rich in vitamin C and antioxidants, energy providing draksha and malt and pippali, which is known to provide resistance against everyday ailments. Dabur, with its Ayurveda expertise, has been able to combine the power of herbs in a format and taste that children love. This will bring about radical changes in the way the MFD category operates.
How do you think this launch will help the mother brand? Is there a fear of cannibalisation? The market has many players, big and small in any case...
The launch will expand the market for Chyawanprash by brining a whole new set of consumers into the fold. This, as I mentioned earlier, is part of Dabur’s efforts to offer the benefits of Chyawanprash to a wider audience. There would not be any cannibalisation with the mother brand. Also, since Dabur Chyawan Junior is a malted food drink, it will compete with the existing health drinks in the market and not with Chyawanprash.
The malted food drinks category is more than five times the size of the Chyawanprash category and hence the recruitment of consumers through Dabur Chyawan Junior would be almost entirely incremental for Dabur.
You have done extensive test-marketing of Dabur Chyawan Junior in key states such as Maharashtra and West Bengal last year. What were the most important findings of this exercise? Did you tweak your product based on these findings?
The test market revealed that the modern day consumers demand more from their energy drinks than just taste and modification through flavours. With its deep-rooted understanding of herbs and Ayurveda, Dabur is well-poised to meet this unmet demand with Chyawan Junior. The results of the test marketing exercise were highly encouraging, which led us to introduce the product nationally within a year of the test launch. No changes have been made to the product.
In the past one year, the company has also introduced Chyawan Prakash, a sugar free variant of Chyawanprash. What is the need for the sudden aggression in this market?
The introduction of these variants is part of our effort to expand the Chyawanprash category as also the consumer base. The market penetration of Chyawanprash as a category is only 5 % and there is a huge scope for growth here.
The growing consumer shift towards natural and Ayurvedic products coupled with Dabur’s efforts to increase the relevance of Chyawanprash in today’s world through the introduction of newer variants and a high-decibel campaign, is helping expand the Chyawanprash market. With health consciousness growing, there has been increasing demand for sugar-free products, so it was natural to launch a sugar free variant.
How big is the overall market for Chyawanprash in India? What is the rate of growth? With so many new players coming in, how has the market evolved over the past few years?
The market in India is estimated at Rs 300 crore and is growing at 3-4% (by volume). Chyawanprash is still a low penetration category and there’s a lot of scope for newer players to enter and expand the market. I am confident that the entry of new players and introduction of newer variants, along with our high-decibel campaigns will help improve the penetration of this category in the future.
Now come to the market for healthcare products in general. Ayurveda is the new buzzword and Dabur has a considerable presence and equity in this segment. How do you plan to beef up your consumer healthcare business?
With almost 125 years of experience in Ayurveda, Dabur is India’s most trusted name and the world’s largest Ayurvedic and natural healthcare company. While today’s generation is aware of the benefits of Ayurveda, they find it difficult to connect with the same and are seeking modern-day validation of these benefit stories. So, the therapeutic properties of Ayurveda are now being scientifically tested because today’s consumer wants proof of efficacy.
Thus science is helping reaffirm consumer belief in Ayurvedic products and also helping improve the sensorial delivery of many of these products.
As a first step, the benefits of Ayurveda were scientifically tested and proven and the same are now appearing on our packs. Laboratory and clinical trials conducted on our Ayurvedic products also prove the benefits and claims.
As a second step, we are making the products themselves look more contemporary. So, packaging of all products has undergone a facelift with the dual objective of making them look modern and to showcase the benefit stories more clearly. Dabur has engaged an international design house for revamping the look and feel of Dabur Chyawanprash and many other brands.
Which are the so-called ‘power’ brands in the healthcare portfolio of Dabur? Which are your stronger markets?
Dabur Chyawanprash, Dabur Honey, Hajmola and Dabur Glucose are the power brands in the healthcare portfolio. For Dabur Chyawanprash, the key markets are the north, east and west India, while Honey sells across India with urban and metro cities being the big drivers of growth.
Consumers have become more discerning and refuse to be swayed by lofty advertising messages these days. Do you see any skepticism in them given the pressures on non-mainstream products from food activists and lobbyists?
Not really. Most of our products are based on authentic Ayurveda and are backed by clinical trials. Of course, consumers are seeking a proof of efficacy of natural and Ayurvedic products and our clinical trials offer them scientific evidence or proof for all claims. So, every claim we make is backed with adequate data and vetted thoroughly before it is made.
What is the turnover of Dabur’s Healthcare business and where do you see it headed over the next two/ three years?
Our healthcare business is around Rs 1,000 crore. We are targeting a growth rate in excess of the sectoral growth rates in the areas we operate in.