Dabur's speedy Ayurvedic launches to help offset other loss, as consumers seek Covid remedies | CEO Interview

Dabur India’s quick product launches in the Ayurvedic segment will help the company to offset any loss in business of discretionary items if a worsening Covid wave brings a slowdown. Dabur launched 50-60 Ayurveda products and drugs within months of Covid outbreak, as the pandemic prompted people to seek immunity boosters. The firm has increased R&D spends to launch more immunity-boosting products and to offer age-old Ayurvedic remedies that are quick to market. Dabur India reported its fiscal third quarter consolidated net profit rose 2.3 per cent on-year to Rs 503 crore, topping the Rs 500-crore mark for the second time in a row. Its Ayurvedic Ethicals business grew at 8.3 per cent during the quarter. Dabur India CEO Mohit Malhotra shares the company’s plans around Ayurveda and immunity boosting business with Tanya Krishna of FE Online.

Excerpts from the interview…

How has the demand for ayurvedic or immunity boosting products increased in recent years? Why?

In the wake of the rapid spread of COVID pandemic in early 2020, Ayurveda-based preventive healthcare gained prominence in the consumer mindspace. People became more inclined to prophylactic health remedies, especially immunity boosting products. In view of this changing consumer behaviour, we revamped our portfolio mix with immunity boosting healthcare gaining prominence.

Dabur has introduced a slew of innovations under the immunity umbrella to cater to this growing consumer need. We have not only increased our R&D spends but are also ensuring that innovations are targeted and quick to market. This shift in our innovation strategy is the reason why we have been able to roll-out 50 to 60 new products within months of the COVID outbreak. We continue to add more products to our portfolio and offer age-old Ayurvedic remedies in convenient and modern formats which will not only increase our repertoire but also provide a better connect with Millennials and Centennials.

Demand for Ayurveda-based Preventive Healthcare and immunity boosting products has grown at a steady pace over the past two years with health-conscious young adults, senior citizens and even millennial and centennial consumers adopting these healthy products for their holistic well-being. This also led to an improvement in penetration levels of these healthcare products, particularly Chyawanprash and Honey. Dabur’s share in the Chyawanprash category improved by 200bps to 63.6 per cent. In the Honey market, Dabur reported a market share gain of 180bps.

What products, in this category, are you offering and what are your best-selling products?

We have a range of Ayurvedic and immunity-boosting products like Dabur Chyawanprash, Dabur Honey, Dabur Chyawanprakash (sugar-free), Dabur Tulsi Drops, Dabur Haldi Drops, Dabur Amla Juice, Dabur Giloy-Neem-Tulsi Juice, Dabur Giloy Ras, Giloy Ghanvati tablets, Dabur Aloe Vera Juice, Dabur Wheatgrass Juice, Dabur Ayush Kwath Kaadha, Dabur Ashwagandha Capsules, Dabur Himalayan Apple Cider Vinegar, Dabur Himalayan Organic Apple Cider Vinegar, Amla Churna, Ashwagandha Churna, Dabur Vedic Suraksha Tea and a range of single herb tablets, to name a few.

Are you expanding your range of ayurvedic or healthy food products in the coming days?

Going forward, we will be further strengthening the current portfolio with the launch of a string of Ayurveda-based products in modern, ready-to-use formats. Our aim is to make Ayurveda mainstream. Some of our recent introductions in this space include the Dabur Vita (a power format), Dabur Chyawanprakash tablets, Chyawanprash SS and Honey Tasties to help increase consumption and penetration.

How are you ensuring adequate stock supplies and better distribution (in case of restrictions due to the Omicron surge)? What are the measures being taken in this regard? How better are you prepared in this regard, as compared to the last year and the year before that?

We have ramped up our product supplies to stockists and increased pipeline inventory in anticipation of any disruptions in the supply chain due to the rapid spread of the Omicron variant. We are also applying learnings from last year on streamlining the supply chain to ensure minimal disruption in supplies, and have already begun building requisite inventory to avoid any supply and commodity disruptions due to the ongoing wave.

What are your strategies to tackle inflation? Will consumers see a rise in the prices of these products?

The inflation in the third quarter of 2021-22 was truly unprecedented at over 13 per cent. There is continued inflation in hydrocarbon derivatives, paper-based packing material, raw honey, edible oils and some key spices that we use. We have offset part of the inflation impact through calibrated price increases of around 5 per cent in key products across Health Supplements, Ayurvedic OTC, Ethicals, Hair Oils and Toothpaste, besides through cost-saving initiatives. Going forward too, we will be taking calibrated price increases in addition to cost optimization to mitigate this impact. Inflation, in fact, remains a concern over the short term.