Jyothy Laboratories Ltd (JLL) is embarking on an aggressive pan-India Ayurveda strategy to meet a ₹500 cror
e revenue target by 2021
Jyothy Laboratories Ltd (NSE: JYOTHYLAB | BSE: JYOTHILAB) is embarking on an aggressive pan-India Ayurveda strategy to meet a ₹500 crore revenue target by 2021. Neem and Margo to play a big role in the company’s newly e
xpanded portfolio. With a series of new launches in the Ayurvedic space slated in summer 2019, FMCG major Jyothy Laboratories is looking at more than doubling its revenues from personal care space by 2021. It is targeting revenues of ₹500 crore by 2021 from its Ayurvedic and naturals portfolio.
To do so, the company has charted out a large-scale strategy and is working on a two-fold organic and inorganic roadmap. The company is extending its Margo and Neem brands within their respective segments while developing a slew of new products under new labels. Jyothy Labs is aiming to achieve ₹100 crore revenue in FY20 with the help of these new categories. The Ayurvedic range will contribute 10 per cent of total revenues by 2021.
Connecting the dots
With fabric whitener Ujala being its flagship brand, Jyothy Labs does not have the legacy of a pure Ayurveda player. However, with Margo and Neem, two brands acquired from Henkel a few years back, the company is connecting the dots between the herbal – natural – Ayurvedic tag and aiming to ride the current Ayurvedic wave in the Indian market.
Thus far, the company has been launching variants in Margo as well as Neem, which account for ₹200-220 crore revenue, with a CAGR of 18 per cent year on year, the company is seeing further scope for expanding the basket and increase the points of engagement with consumers. At present, the personal care segment accounts for 12 per cent of the overall business for the company.
The company will roll out the first phase of its new products namely, a liquid face wash and hand wash and variants of these, between April and May 2019, with the launch likely to be under the brand Margo. The products will be manufactured at the company’s Guwahati facility and will be made available in South India and East India in the first phase. Currently, the company spends more on advertising Ujala than it does on Margo and Neem, but that could also change as it will adopt a different advertising strategy for its new range. The brand communication will be distinct from the rest of the products portfolio.
New ambition: Haircare
Jyothy Labs is also looking at an acquisition in the hair care space. It is exploring options to buy out a Kerala-based Ayurvedic company that specialises in niche categories (hair oil) so as to gain quick entry into newer segments and have a product that stands out against the competition. The company has set aside about Rs 200 crore for acquisition in the Ayurveda space.
Ayurveda has not been a part of the company’s brand identity; Margo and Neem are acquisitions and are part of the portfolio that came from Henkel as part of its seven brands. The company has a portfolio of six power brands which contributed 87 per cent to total revenue in FY17 — Ujala, Exo (dish bar), Maxo (insecticide), Henko (detergent), Margo and Pril (dish wash). The company has steadily increased its market share with the power brands, with Margo and Neem, pegged as the fastest growing brands.
Challenging the giants?
When Patanjali’s Ayurveda products set the ball rolling in the natural personal care category in India, MNCs responded by bringing out Ayurvedic variants of existing products. The growing preference for all things naturals has large big players such as Hindustan Unilever Ltd (HUL), Colgate-Palmolive, Emami, Himalaya, Dabur, and other local brands focus more on nature-based products.
For Jyothy Labs, the transition to Ayurveda will have its challenges and it will be critical for the company to create a truly differentiated offering to convince consumers.
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