Patanjali struggles to meet demand for products

Retailers complain of poor fill rates; company sprucing up supply chain, storage

Even as Baba Ramdev’s Patanjali Ayurved aims to double its turnover in the current financial year, it is struggling to meet the demand for its products.

Patanjali has signed exclusive deal with Future Group and sells its products through large hypermarkets such as D-Mart, Star Hyper and Reliance. Apart from this, Patanjali products are sold through a large network of shops, Ayurvedic stores and pharmacies. For instance, a store executive at Star Hyper, run by Trent-Tesco combine, said they had planned to set up a separate section for Patanjali products but couldn’t do so because of erratic supplies. “There’s no point in having a separate rack and displaying a few products on it,” said the executive.

According to a senior executive at a large retail chain, the fill rates of Patanjali products are in the range of 40-50 per cent. On the other hand, multinational consumer goods companies such as Nestlé and HUL have a fill rate of 85-90 per cent.

Fill rate in this case means the rate at which the goods are supplied by a manufacturer against a retailer’s order. To put it simply, if a retailer orders 100 products and the manufacturer supplies 90, then the fill rate is 90 per cent.

“Patanjali is a hyper start-up. It wants to grow from Rs 5,000 crore to Rs 10,000 crore but is realising that systems and processes are not geared up. Every retail chain is facing supply issues with them,” said an executive at a Mumbai-based retail chain.

Smaller Ayurvedic pharmacies, which stock Patanjali products, are also facing similar issues.

When asked, Patanjali spokesperson S K Tijarawala accepted that retailers were facing supply issues.

He said, “There is a huge surge in demand for our products whereas we are facing constraints in procurement of raw materials and production. We are doing our best to resolve the issues.”

Tijarawala said the company has leased 1.2 mn sq ft warehousing space in the past three months and it planning to add another 800,000 sq ft space by the end of current financial year. “We are improving our supply chain and logistics,” he added.  

“They don’t supply products on time. It is odd for us to tell our customers that products are not available,” said an Ayurvedic shop owner in Thane.

Founded in 2007 by yoga guru Ramdev, Patanjali Ayurved is targeting Rs 10,000-crore revenue in 2016-17.

The company has a network of 4,000 distributors, 10,000 stores and 100 mega marts.

Patanjali will invest Rs 1,150 crore this financial year to set up six processing units and one research centre.