CavinKare plots a new route

The Chennai-based company is taking its best-selling brand national, taking on stalwarts in the hair care sector

Twenty five years ago he broke into a market that was dominated by unorganised players. And then within six months, C K Ranganathan, also known as sachet king for his innovative packaging methods, had led CavinKare into its biggest success so far. Brand Meera, a herbal hair wash powder, overtook its only other rival in the organised category and expanded beyond Chennai into markets in Andhra Pradesh and rural Tamil Nadu. After that however, Meera did not expand too fast and restricted itself to being a regional player. This is about to change as the company plans to make it a pan-Indian brand valued at close to Rs 500 crore.

But the question is whether Meera can find a place at the main table? Experts believe that this is an example of an ethnic brand and if the company can market it accordingly, it could find new buyers. However, the company must be aware that ethnic brands cater to a unique consumer group that wants to combine traditional features with modern day convenience. Meera started life as a herbal hairwash powder and from there transformed into a hair oil and later, a shampoo. It plans to expand into a range of skin care products too. Currently available in Tamil Nadu, Karnataka and Andhra Pradesh, Meera shampoo has 6.3 per cent of the market share in South India with 75 per cent of the revenue coming from urban markets.

C K Ranganathan, chairman and managing director of CavinKare whose idea of packing sachets with hair powders had once revolutionised the industry admits that original idea was not his. Shaw Wallace had already done it, but the product was marketed poorly. "They showed the concept, but we perfected it. We improved the formulation dramatically and the product delivered a wow effect," said Ranganathan. He is also known for introducing sachets to the shampoo market in 1983 with Chik shampoos for Rs 1.

CavinKare adopted a similar strategy for Meera, pricing it at Rs 1 for a 6 grams sachet. The target was to overtake the competition in two years.

But Ranagnathan claims they did it in two months; and in six months, Meera had 95 per cent share of the market. For CavinKare which was begun with just Rs 15,000, Meera was a big success story and has been instrumental in its growth over the years. While CavinKare's top line was flat in 2014-15, it clocked Rs 1,200 crore as turnover the previous year, with the Meera brands contributing Rs 135 crore. The company earned nearly Rs 75 crore from shampoos, Rs 33 crore from the powder and Rs 25 crore from coconut oil.

Still Meera remains a regional brand and has had to battle perception issues. Customers were unhappy because they found that in the powder form, the product turned lumpy inside the sachets. Ranganathan said that they spent considerable time investigating the problem and were able to rectify the issue.

Ranganathan points to the feisty history of the brand. He says the Meera took on the market leader and withstood the attack from an army of home-grown brands soon after its launch. A few years later it was threatened by Raaga, launched by a breakaway faction led by Ranganthan's brother C K Kumaravel. Ranganathan says "they were doing about Rs 25 lakh, when Meera was doing Rs 1.5 crore. It was a distant second competition." But soon "Raaga had become sick since Kumaravel over borrowed and stretched himself," says Ranganathan and was bought over by CavinKare.

Another challenger by another break-away group was Ganga, again a Shikakai based hair wash. It was launched by a group of ex-employees but soon fell by the wayside. Meanwhile Ranganathan launched an in-house competitor, Karthika, a cheaper alternative to Meera. Karthika was launched at 50 paisa which has gone up to Rs 1 while Meera launched at Rs 1 is now available within the range of Rs 3 to Rs 65. Meera, therefore, is ready to don the national colours.

The company expects, it will also be helped by the brand's extension into herbal hair oils which is among the fast growing hair oil categories (the value added hair oils market is slated to grow at close to 20 per cent according to a report by research and Markets). Besides, the company believes that the brand can't stay static. "We don't want to become a dinosaur, we should adapt to changes - so from Shikakai powder the company went into shampoo version" and similarly it will now make the transition from being a regional brand to a national one.

The company will begin with West Bengal and Maharashtra. It has already restructured its distribution structure and created two verticals: food and personal care products so that is sales teams are able to focus better. It has also increased its brand spend nearly 50 per cent to Rs 200 crore. Now time for Brand Meera to lace up for the trek ahead.