When 110-year-old FMCG brand and traditional medicines player Hamdard Laboratories launched a cutting-edge and disruptive social media campaign — #IHateYouMom– for its legendary brand Safi, the idea was not just to attract a few eyeballs. The big picture was to get under the skin of young consumers who today, have become the center of strategy for various FMCG brands in India.
Over the last one-and-a-half years, the company has been on an overdrive to revamp and innovate its Rs 600 crore business by keeping wide product offerings and modern-day consumers in mind. The company is on transformation mode, overhauling its products portfolio, packaging, distribution, marketing and communication. It has a portfolio of around 600 products of which nearly 580 are medicinal products and the remaining are FMCG.
A few iconic products include Rooh Afza sharbat, Safi blood purifier, Roghan Badam Shirin, Joshina, Sualin and Cinkara tonic, among others.
Of Legacy & Heritage
While transformation is a must, the company has set its focus on keeping the heritage and lineage of the brands intact in the form of the very nature of the products as it keep on reaching the new set of consumers; playing around the communication and the position of its products.
“So, we are not only changing products but also the perception of the products. The idea of the campaign (IHateYouMom) was to generate the sense of familiarity with younger generation who keep on asking their mother as how they got such great skin. It depicts a sense of comparison that a child has with his/her mother in a healthy spirit. The campaign got lot of virality on social media and the brand Safi grew 25 per cent last year,” Chief Marketing and Sales Officer, Hamdard India, Mansoor Ali, says.
“At a time when FMCG industry has been growing by just 4-5 per cent. Hamdard, as a brand, grew by 21 per cent last year. Which means we are doing something right!,” he adds.
For this perception change, the company has considerably increased the spends on social and digital marketing. “Our spends on social and digital marketing has gone up by ten times in the last one year. We have hired a digital company for social media marketing,” tells Ali.
The company, which from over 100 years, is by default sitting on top of the natural and herbal products portfolio, witnessed a tremendous shift towards herbal and ayurveda space from synthetic chemical products among consumers. And that was when it realise that its time to capatalise on its existing product portfolio in a way that they hold relevance, both amongst young consumers and those who are gradually shifting towards natural products.
“So if you look at all the changes that we are undertaking from past one and half years- brand transformation, communication ideology, channel strategy, expansion into the overseas or a retail initiative (wellness centres)- are based on this consumer insight,” Ali explains.
Giving Rooh Afza a Facelift
For the company, the major spotlight moment will occur just a few months away, when its iconic Rooh Afza brand which enjoys a 40 per cent market share in the Rs 750-800 crore powdered drinks and rink single-serve Tetrapaks or PET bottles, in diffesyrups segment will be sold in ready-to-drent flavours like lemon or orange. The move is in tandem with company’s vision to make it products look relevant and ‘cool’ to young consumers.
“It is our flagship brand and the largest contributor (Rs 300 crore in sales) to our overall revenue. So we are not toying with the original product but extending it into newer formats. It will be the same Rooh Afza but with a fruit twist and of course a brand new packaging and communication. There will be four- five variants, ” says Ali.
“We will also be changing the brand name of these ready-to-drink Rooh Afza’s, albeit the main branding will remain the same. The brand launch will be followed by a completely youth based, jazzy communication, ” he adds.
While making it relevant for younger generation is one, the makover will also factor in company’s aim to make Rooh Afzha a season-agnostic drink. Over the last one year, the company is trying to reduce sales dependence from its key markets — North and centre India — by launching smaller packs in the markets likes West Bengal, Andhra Pradesh, Telengana, Gujrat, among others, where consumption could be more perennial.
“While in the main part(of weaker markets) Roohafza is there but when you go down in to the interiors its bit low. We launched small packs there with a sheer motive of people picking it up. This was followed by lot of ATL, BTL activities in these areas,” tells Ali.
The aim was to convert these small bottle buyers into the loyal Rooh Afza consumers, he adds. “The launch was just like investments as we knew we were not going to get back anything as return in the same year. But it helped us in establishing our products in these markets. People were picking it up and we were able to convert those Rs 50 bottle buyers to the large consumers. Both small and large pack sales have started picking up in these areas with no canabalizing of products.”
With the launch of ready-to-drink format, the company is confident of ending all the seasonal barriers. “The moment you enter a ready-to-drink format you are in any case crossing all the seasonality issues. Because a ready-to-drink today is a an all year consumption. So the ready-to-drink, small pack, large pack and a 1.5 liter value pack. All will help us making an all year consumption drink.”
Besides Rooh Afzha makeover, entering the new segments like cosmetics are also in a pipeline but Ali says “they are the phase II considerations.”
The transformation cuts across the value chain. In addition to product innovation, Hamdard is also realigning its distribution base. The company has appointed a special project team for the same which is just mapping the distribution channels for the company’s products.
The company currently reach out to 5 lakh outlets directly on the back of constant push in modern trade reach.
“Today modern trade, which is based on sheer relationship with the retailers as against the strength-based reach of general trade, is growing significantly. We were little slow with former and over the last few years, we have strengthened that,” Ali says, citing a recent Nielsen data which has listed Rooh Afza as one of the top-selling beverages across modern trade in the first six months of this calendar, piping brands like Coca-Cola and Pepsi.
“We have even beaten Coca-Cola in terms of volumes in Walmart as well,” he added.
The company is also scaling the institution channels. They have started selling products in Canteen Stores Department (an army supply) and the police canteen. “Institutional channels are a different ball game and its too early to divulge any plans for them,” Ali says.
It has also recently forayed into retail with the launch of its flagship wellness centre in Delhi which sell all company products, besides traditional medicines, and have therapy rooms and doctors. In the first year, the company plans to set up ten wellness centres, with an average size of 1500 sq ft. All these stores will be company owned.
“We want to make sure that the first phase is controlled by the company therefore these ten stores will be owned by us. Once we see success and stabalize the model, we will think of the franchisee stores but that will be in the year two or three,” Ali says.
Along with modern, general and own stores, e-commerce has also emerged as an important channel for Hamdard. The company’s products are currently present at all the big marketplaces and hyperlocal players including Amazon, Snapdeal, Grofers, among others.
And now its mulling to host its own e-commerce platform. “It is not in the absolute near future as I believe every business needs to kick-in when you reach a certain scale and a mass. We want to first embed in all the websites and aggregators before launching our own platform,” informs Ali, adding that the day is not far off.
“We have recently revamped our website and I think it is capable of hosting an e-commerce channel and we are in the process of talking to some back-end vendors as well.”
Internally Funded Moves
With the overhaul of the product portfolio and changes in marketing and distribution strategies, Hamdard targets to maintain a growth above 15 per cent, which, according to Ali, is challenging to maintain in today’s environment.
On monetising all the bold changes the company is undertaking Ali says, ” Hamdard will never ever need to raise funds. We are an unlisted company and we are a very cash-rich organisation and all the developments will be internally funded.”
Innovating While Maintaining Essence
When a legendary brand tries to shell out it old-age image to cut through the newer consumers and market there always remain a risk to tip over on the either side. Ali, however, is making sure they don’t.
“In the excitement of doing new things one tends to forget that they have to maintain the legacy and heritage the brand has. So I think its all about balance and clarity of thoughts. You have to maintain that sanity while you keep reaching out to the new consumers and start transforming your products and communication strategy,” says Ali.
“The Good thing that we have with consumers is trust. So we are playing on that trust and just transforming the way we do business,” he concludes.