Patanjali Ayurved Limited is India’s fastest growing FMCG company. In May 2017, the company announced that it had doubled revenues in just a year to over Rs 10,000 crore, becoming India’s second largest consumer goods company, second only to Hindustan Unilever. In a single year, Baba Ramdev’s company has leapfrogged past giant companies such as ITC, Nestle, Godrej, Dabur and Tata. So Patanjali is certainly a corporate high performer.
Like any other big FMCG company, Patanjali may have an impressive food park, stretching across acres and acres of land, with state-of-the art machinery imported from around the world, and the factory floor may be governed by intricately detailed standard operating procedures with workers in hair nets and gloves. Yet, I discovered, while working on my book on Ramdev, some fascinating facts that showed a very different culture of work, one that’s completely unique in Indian corporate life.
No Mean Feet
The first — feet-touching. When the saffron dhoti- and shawl-clad Ramdev enters the complex, workers abandon their posts, rush out and queue up to touch his feet. The same treatment is given to Acharya Balkrishna, Ramdev’s short and stocky, white-robed deputy who notionally owns 96% of Patanjali’s shares, and Ram Bharat, Ramdev’s tall, strapping and mustachioed brother who manages the company’s monies.
While it is ordinary for people to touch the feet of a sanyasi like Ramdev as a mark of respect, it certainly isn’t the regular practice in an ashram to revere a brahmachari like Balkrishna or a householder like Ram Bharat.
All major decisions about Patanjali products are taken by Ramdev himself.
Little over a year ago, I witnessed Balkrishna walking into his offices on the first floor of Patanjali’s ayurveda hospital in Haridwar. The hospital staff, administrative officers and guards all rushed to greet him. They touched his feet and he tapped their backs in blessing, occasionally saying, “Khush raho”, be happy.
Not only do employees touch the feet of the leadership team but meetings aren’t the standard round-table affairs. “During meetings, Ramdev sits on a high seat. Everyone else — from the CEO to factory workers — is expected to sit on the floor, below him,” says SK Patra, Patanjali’s CEO between 2011 and 2014. As a result, Patra says, there is a gurubhai culture at Patanjali, a sense of brotherhood — and equality — as disciples of the same teacher.
For the IIT and IIM-educated Patra, the man who laid the foundations for the company’s meteoric rise, and who had a proven track record working with blue-chip firms owned by the Birlas and the Bangurs, this was a source of some tension: it meant that his subordinates viewed him as a gurubhai rather than as their boss. This was one of the reasons why Patra says he eventually left the company in 2014.
Reverence for the guru is just one facet of work life at Patanjali Ayurved. The other is the missionary zeal with which the company is run. More than the man at the helm of a nearly $4 billion commercial enterprise, Ramdev is a man on a swadeshi mission. And so more than a conservative corporate CEO, Ramdev sounds like a colourful crusader.
Will any other CEO say something like, “Colgate ka gate bhi band hoga, Pantene ka to pant gila hone wala hai, Unilever ka lever bhi baithega aur Nestle ki chidiya bhi udegi (The gate of Colgate will shut, Pantene will wet its pants, the lever of Unilever will break down, and the little Nestle bird will fly away),” as Ramdev said about his competition in 2016? Or, even that, “Patanjali has become a great brand, I hear. But you’ve seen nothing yet. There are two things that I have to do. Make all foreign companies do sirshasana (headstand) within five years, and put Mother India on the throne of the world. Kitna mazza aayega (What fun it’ll be)”.
While Ramdev may be an entertaining, and, for India Inc, an unconventional, public speaker, there is no doubt about his business canny. All major decisions about which products Patanjali should produce, and what they should look and feel like, are taken by Ramdev himself, based on instinct, not endless focus groups and data analysis.
Patra recalls that Ramdev’s dream is for Patanjali to make every product that the average Indian uses from dawn to dusk. “He would try out every new product himself — put it on his beard, on his face, use the shampoo himself. He cared deeply about how it looked, how it smelled. He would give the final seal of approval on all new products,” recalls Patra. Patanjali today produces over 500 FMCG products — from biscuits to shampoo, and from ghee to body lotion.
Ramdev try out every new product himself. He would give the final seal of approval on all new products.
Ramdev is personally involved in pricing, too, says Patra. “Baba never cared about what the market prices were. For any product pricing, he was personally involved. He would ask how much it had cost to produce something. Then with a slim margin — he just wanted to sell.” So while 1 kg packet of Tata salt costs Rs 20, Aashirwad Rs 18 and Saffola Rs 31, Patanjali sells it for just Rs 12.
Ramdev has no inherent advantage in salt. In fact, under Patra, Patanjali Ayurved tied up with a salt producer in Gujarat and began to buy in bulk from them, iodize and pack the salt and sell it. But because Ramdev is not too fussed with margins, he is able to underprice the competition in some segments.
Gunendar Kapur, a leading retail and consumer executive who had worked for over a decade at Unilever before joining as CEO and president of Reliance Retail, agrees: ‘He (Ramdev) doesn’t seem to care much about the money, he cares about his own legacy. His margins are very, very low. For formal companies, a profit after tax of less than 15% is too low. Their investors will not be happy with that kind of a performance… Ramdev does not have such a limitation.”
Work is Worship
Ramdev’s willingness to endure low margins is one of the secrets of Patanjali’s ability to keep prices low. But the other ingredient for keeping prices low is the recasting of work or labour as spiritual seva. Ramdev terms working for Patanjali as service, for the benefit of the nation, of swadeshi, of “Indian heritage”, of yoga and ayurveda.
He plays on deeply embedded insecurities about multinational colonisers and so his employees are made to feel like crusaders fighting against foreign companies, not mere workers. The ordinary rules of the labour market don’t apply at Patanjali. And what if an employee wants an annual increment?
The average Patanjali worker on the factory floor earns just Rs 6,000 per month for twelve-hour shifts, six days a week.
Conversations with Patanjali workers, past and present, reveal that Ramdev’s recasting of work as seva of the guru and his larger mission cleverly make it more difficult to demand pay hikes. In the pervasive seva culture at Patanjali only a “selfish” person would ask for an increment. If anyone does manage to overcome their inhibitions and ask for a raise, they are promptly reminded that there are many others willing to take their place in the assembly line, says a worker on the condition of anonymity. And so the average Patanjali worker on the factory floor earns just Rs 6,000 per month for twelve-hour shifts, six days a week.
Haridwar is an unlikely place for a multibillion-dollar homegrown company to have come up. A saffron-robed sadhu an unlikely captain of the ship. But perhaps what sums up Patanjali’s exceptionalism is what Ramdev said: “The purpose is not to accumulate any great wealth for myself. Look, there is an empire worth crores, no, hundreds of crores around us today, but even today, I sleep in a hut on the floor. Whatever I have got from the country, it is for the country. The wealth of Patanjali is not for any one person — it is for the country. It is all for charity.”