Health, wealth and herbal

rashmi pratap | Updated on November 28, 2014 Published on November 28, 2014

Himalaya Drug Company’s CEO Philipe Haydon

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From toothpaste and diaper-rash cream to shampoos and India’s largest-selling liver support medicine, Himalaya Drug Company offers something for everyone. But that’s not all. It also sells calcium supplements for animals and herbal feed for fish. In conversation with BLink, CEO Philipe Haydon reveals what defines the company and why its competitors are not Dabur or Charak but Cipla and HUL. Edited excerpts:

With 200 products across pharmaceuticals, personal care, baby care and animal health, what is the one thing that Himalaya stands for? Would you call yourself an FMCG or wellness company?

We stand for well-researched herbal healthcare products. We put science in herbal healthcare. It would be right to say that we are several companies in one. We have always been a pharmaceutical company and are also a personal care, animal care and baby care company. We stand for wellness — internal as well as external — through herbal healthcare.

Our pharmaceutical products are researched for 8-10 years on average and three to four years for personal care.

Haven’t you spread yourself too thin by being in four verticals and opening yourself to competition from everyone — from Dabur to HUL and P&G? What is your focus area?

We would have spread ourselves too thin if we were a single division. But we have separate, focus-driven divisions, each being a profit-loss centre functioning independently. In pharmaceuticals, my competition is not Dabur or Charak. My true competition lies (not in the herbal market but) in the Indian pharmaceutical market — Glaxo, Astra-Zeneca, Cipla etc. If they have products for cough and cold, or acidity or diabetes, so does Himalaya. The difference is that their API (active pharmaceutical ingredient) is of allopathic nature and mine is herbal, but our products are being sold alongside theirs in pharmacies. Our Liv 52 is the number one brand in the hepatic segment.

We have more than 50 brands and the entire range is prescribed by allopathic doctors (out of nearly 4 lakh doctors in India, 2.5 lakh are allopathic). All our clinical trials are done at allopathic hospitals, based on allopathic protocols, like KEM, JIPMER, Tata Memorial. In the personal-care segment, the competition is L’Oreal, HUL and Garnier, as our products are placed on the same shelf.

Himalaya started as a healthcare company. Why did you get into personal care? And the other categories?

Himalaya always had personal care products, but those were only for staff gifts. We had to write to the head office and they would send us shampoos and hair-restoring products. These products were brilliant and there was a lot of internal pressure on the chairman to take it to the market. That’s what led to the genesis of Ayurvedic Concepts — our first foray into the personal-care segment, in 2002.

You spend little on branding and marketing compared to the other players. Why?

As far as baby care is concerned, we genuinely believe that a mother should seek a doctor’s guidance on what is best for her child. We promote our products to doctors. In personal care, our ad spends, at 18-20 per cent of our revenues, will be much more than most other players’ (though not in absolute terms). We have been growing at over 35 per cent in personal care. Our distribution system is robust and we gained a lot of leverage when we launched our personal care division, as there was immediate acceptance for Himalaya, which is a trusted brand.

What changes in consumer trends — spending/product choices and so on — have you witnessed in the last decade? And how has it affected Himalaya?

Today, we have extremely aware customers who know exactly what they are looking for. They are information-seeking and you cannot take the consumer for a ride. Your product has to stand on three parameters — results, safety and brand equity. Also, we have seen a great acceptance of herbal solutions.

More and more people now want to use herbal, organic, natural and gentler products. We are the right people in the right place at the right time.

How do you manage the supply chain — from sourcing to distribution — for this vast product range?

It is pretty simple. We have 300 clearing-and-forwarding agents and they supply products to more than 6,000 distributors across India, who then supply to retailers. We source raw materials from all parts of the country.

We have a three-year forecast ready at any given point of time. It is shared with the production department, which ensures we have enough raw materials. We have also tied up with 4,000 farmers, who grow crops based on our requirements and adhere to good agricultural practices. We buy 100 per cent of their produce at better-than-market rates.

Why have you taken only the organic route to growth? And do we see that changing in the near future?

The kind of battle we fought has been different from other companies. We fought to establish that herbal medication can be backed by scientific research. That is why we refused to launch any product that was not backed by our quality and research standards. That stuck, and has remained a part of our DNA. We don’t offer any product that does not meet the stringent standards of research we have set for ourselves.

Published on November 28, 2014
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