The Wealth Tonic

Hundreds of years ago, court physicians served Rajput rulers with a secret herbal potion. The brew was believed to not only maintain the royals' youth but also enhance their sex drive. In more recent times, chyawanprash has been quietly adding zing to corporate bottomlines for decades. But now suddenly, this placid Rs 350-crore market is resounding with battle cries. There are determined new deep-pocketed entrants, innovative new variants, increasing and tighter segmentation, enhanced advertising budgets.

Dabur is the undisputed leader with over 60 per cent marketshare, followed by a host of others including Shree Baidyanath Ayurved (which has been making the product for 80 years), Zandu Pharmaceutical Works, the Emami group and several players in the unorganised sector. And newcomers like Himalaya Drugs, which launched its chyawanprash last month, are being lured in by the lucrative business. Explains Ravi Prasad, president and CEO, Himalaya, "Chyawanprash is known to Indian consumers. All we have to do is reach the product to them."

In fact, Prasad goes so far as to claim that chyawanprash is going to become his company's mainstay in the near future. His recipe for success is based on the fact that the segment could have grown faster than the current 15 per cent if the manufacturers had focused more on product innovation. Himalaya hopes to do that and, according to a confident Prasad, "Himalaya will grab a 5 per cent share in the first year itself."

For that, Himalaya—which shot into prominence with its "Ayurvedic Concepts" ad blitz a few years ago—has already signed on young cricketers Zaheer Khan and Yuvraj Singh as brand ambassadors. It will make the product just the way it was made in olden times but it has also invested in the latest technology to ensure the main ingredients are not burnt and the final chyawanprash is brownish, not the customary black. In addition, at Rs 110 for 500 gm, Prasad has priced his product higher than Dabur's (Rs 95 for 500 gm) and Zandu's.

How will the premium pricing strategy work? On the one hand, it could restrict Himalaya in cutting too deeply into the existing pie. But the higher price could also be seen by the customer as the stamp of higher quality, as happens often in healthcare. Dabur is gearing up for the challenge. After all, chyawanprash accounts for nearly 20 per cent of revenues and probably a higher share of profits. The same is true for Baidyanath, 30 per cent of whose revenues come from this product. "We are watching Himalaya's strategy closely," says a senior Dabur manager.

But when questioned further, Dabur managers are tight-lipped. Its head of the healthcare products division, D. Garg, would only say that it is too premature to think about competitors and he'll have to watch how Himalaya fares in the marketplace. But going by current indications, it seems that the leader has hiked its advertising spends in the last month or so. Plus, it is pushing the product into newer markets to increase volumes.

Baidyanath, surprisingly, is not too bothered about either Dabur or Himalaya. Its president, Dhananjay Sharma, says he believes in niche presence and does not wish to play the volumes game. "Ours is the oldest and most premium product and we have a dedicated customer base," he says.

What is probably good news for all the players is that the segment is far from saturation; penetration levels are as low as 4 per cent. "With awareness about herbal health foods going up, chyawanprash is set to see far higher growth in coming years," says Sharma. Adds Dabur's Garg, "The market can easily accommodate a few more genuine and quality-conscious players."

Probably true. But marketers have also started segmenting the broad chyawanprash market to increase penetration and usage in different demographics.Traditionally, chyawanprash has been a one-size-fits-all product that can be used by all family members. But a number of variations have been launched in recent months, with more in the pipeline. Says Baidyanath's Sharma, "Some products are targeting the old consumers, while others are looking at only children." Plans are afoot to even launch a chocolate-flavoured chyawanprash now!

In addition, new products like Bal Chyawanprabha and Amritprash are now being offered as substitutes. These don't have all the ingredients chyawanprash has but are positioned to cut into the latter's market. For instance, Emami's Amritprash is being offered as a summer health food. Most chyawanprash is sold during winters, so the idea is to reduce seasonal sales fluctuations.

It will only be a matter of time before Dabur and Himalaya realise the advantages of having a multi-product stable that can appeal to different kinds of consumers. So expect a cluttering of shelves soon by many chyawanprash variants offering narrow-spectrum benefits. But that will be the second round of the chyawanprash battle. And the third and final one? That's when the makers gain enough confidence to take on mnc brands like Horlicks and Bournvita.