Rooh Afza maker Hamdard plans revamp to boost sales
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New Delhi: Hamdard Laboratories founder Unani practitioner Hakeem Hafiz Abdul Majeed, who created Rooh Afza, once retraced its advent to the time when “the motor car was on its way in and the horse buggy on its way out”.
The rose-flavoured cooling drink, introduced in 1907, has survived the partition, the era of the licence raj, carbonated drinks and Tetra Pak juices.
But it hasn’t been “cool” among the millennials—people who reached adulthood around 2000. Sales suffered because of outdated packaging, indifferent marketing and limited distribution, centered in north India.
The Waqf (Islamic irrevocable trust) that manages Hamdard Laboratories initially didn’t want to accept this thesis, until the younger generation joined the Islamic trust.
Hamdard Laboratories, maker of Safi blood purifier and Cinkara tonic, besides Rooh Afza, is finally set for an overhaul.
Its new buzzwords are modern packaging, smaller pack sizes, ready-to-drink beverages, natural personal care products, aggressive marketing and distribution, coupled with disruptive communication. The agenda is to be relevant to young consumers while leveraging its more than century-old legacy.
Hamdard wants to establish itself as a company that sells food and personal care products made of “only natural ingredients.” The aim is to cross Rs.1,000 crore in annual sales by March 2019 from Rs.610 crore in the year ended 31 March 2016.
“It’s all about positioning. People, essentially the youth, are turning to natural products. And they are more health conscious,” said Mansoor Ali, Hamdard’s chief sales and marketing officer.
“For more than a century, we have been selling products made of natural ingredients. What they need is proper positioning through marketing and modern packaging. We need to position ourselves to be more relevant for the young,” he added.
Hamdard’s best bet, naturally, is Rooh Afza.
“By March 2019, it will cross Rs.500 crore (in sales). We are targeting Rooh Afza to touch Rs.300 crore sales by March 2017. Safi is estimated to reach Rs.100 crore sales by the end of this fiscal year,” said Ali, who joined Hamdard in January 2015.
Ali has earlier worked with companies like Procter & Gamble Co. and Reckitt Benckiser of India Ltd, among others. He hired people from other packaged goods companies to run Hamdard’s day-to-day business.
“The company is now run by seasoned professionals,” he said.
Over the next couple of quarters, Hamdard will launch smaller packs, ready-to-drink variants like milkshakes, new flavours, even a sugar-free version of Rooh Afza, and energy drinks, which will be sold in PET bottles and Tetra Pak containers. “We will also be pushing our products through modern trade and e-commerce channels. We need to establish Rooh Afza as a season-agnostic beverage,” said Ali.
Not just Rooh Afza. There will be new products under all the brands of Hamdard—Safi, Roghan Badam Shirin (almond oil), Sualin (cold and cough remedy) and Cinkara (health tonic).
“For instance, we are planning to bring personal care products under Safi. Plans are being finalized,” said Ali.
At present, about 45% of Hamdard’s revenue comes from the northern India, primarily Uttar Pradesh, Punjab and Haryana.
The company has started tapping markets in the eastern region and is gearing up to enter the west and south.
Its manufacturing plants are located in Delhi, Manesar (Harnaya) and Ghaziabad (Uttar Pradesh). The company is looking to increase capacity at these plants and may set up a new production unit for personal care products.
Investments, said Ali, would not be an issue. “About 85% of profit still goes to charity. And the Board (Waqf) has agreed to invest as required,” he added. At present, its products are available across 450,000 retail outlets.
Its heritage may be an advantage but it needs greater visibility, said Sachin Bobade, a Mumbai-based equity analyst.
“...Hamdard’s products need to be seen—not just in stores, but also across mass media. Today’s generation is unlikely to have any knowledge about the brand. Without a doubt, Hamdard has good potential for growth. But it needs to be visible first..,” he added.
This year, Hamdard will spend about 15% of annual revenue on advertising. “We are not going for celebrity endorsements. Differentiated, disruptive communication without shift away from the core, more focus on digital and consumer engagement is the way forward,” said Ali.
The firm has engaged Rediffusion Y&R as its creative agency while Delhi-based Sterco Digitex has been given the mandate for digital communication.
Santosh Desai, brand expert and chief executive and managing director, Future Brands Ltd, said that to stay relevant and connect with young consumers, heritage brands often commit a common mistake of trying to appear to be cool.
“It doesn’t work. Companies must have belief in their heritage instead of running away from it. Baba Ramdev’s Patanjali Ayurved, for instance, is not trying to be a cool brand, and its popularity shows its relevance,” he said.
Hamdard should find a way to frame its timeless appeal in the current context. “Clearly, there is a consumer shift from aerated to health drinks. Hamdard’s Rooh Afza can be relevant if the company manages to tap into the modern health discourse and leverage it,” added Desai.
Hamdard, meanwhile, is setting up wellness centres to popularize Unani as a nature cure method. “We have already set up six wellness centres. We’ll have 10 by end of the year across the country. These wellness centres will sell all company products— medicines, personal care products and beverages, besides offering remedies and therapies by qualified doctors,” said Ali.
Desai said heritage works in the wellness sector, citing the example of the ayurvedic Kerala massage that is an extremely old therapy, yet remains popular in contemporary times. “A wellness centre, in Hamdard’s case, should be a way to amplify its past, not escape it,” added Desai.