Spurred by Patanjali’s success, Jyothy Labs builds on ‘herbal’ equity

Patanjali Ayurved’s success is giving confidence to rival FMCG firm Jyothy Labs to enhance its presence in the herbal products segment.

The latter plans to extend the portfolio of its heritage brands like Margo and Neem it acquired from German company Henkel a few years back.

The growing popularity of brands like Patanjali has made Jyothy Labs make brand extensions to build on its existing ‘herbal’ equity.

“With the success of Patanjali, we have to work harder to make sure that brands like Neem toothpaste and Margo soap have bigger scale. Both are heritage brands from the Henkel portfolio and been around for almost 80-90 years,” said K Ulhas Kamath, Joint Managing Director, Jyothy Labs.

While Neem Active toothpaste will soon extend itself as a face wash with an-all India distribution network, Margo will also witness a range of soaps, having created a niche in the glycerine category.

“Neem toothpaste is a ₹25-crore brand from the Henkel portfolio and now it will have an all-India presence,” said Kamath. Meanwhile, with growth slowing down in the rural markets, Jyothy Labs intends focussing on the premium segment in the urban markets to drive better margins. For instance, in the detergent category, it has decided to introduce a premium variant in the bucket wash category since it continues to comprise 80 per cent of detergent users.

“There will be a premium bucket wash variant under Henko which will be targeted at the urban markets. The Henko franchise already has variants likes Stain Champion in the mid segment and Henko Matic for the washing machine or matic segment.

“Since demand continues to be soft, we have to be present in all the segments,” Kamath added.

Magic card

Despite the presence of large MNC players such as HUL and P&G in detergents, Henko has managed a 6 per cent market share, with the matic variant growing the fastest, at 27 per cent. Even in the household insecticide category, Jyothy is now increasing its presence in the “magic” card category, which is dominated by Godrej Consumer Product’s Goodknight.

“There is one player dominating the card segment, which is estimated at ₹327 crore today. However, now there are others like Mortein, All Out and us entering it with Maxo cards which will being launched nationally,’’ he said.

The ₹1,550 crore Jyothy Labs reaches out to 5 lakh outlets through direct reach with 60 per cent of its sales coming from the urban markets.

It expects to grow its distribution by another 25 per cent this year.