Start-ups reviving Indian medicine with Ayurveda 2.0
Published Date | 2018 October 8
A small band of young consumer firms riding the Patanjali wave is repackaging the ancient healing system for health-conscious Indians and forcing investors to take note.India: The Mumbai-based venture isn’t the only consumer start-up looking to cash in on the growing Ayurveda market, presently estimated at USD 3 billion. An emerging segment of the food and beverage-focused start-ups has launched Ayurveda-based products including ready-to-drink juices, capsules and nutrition powders. Arjun Vaidya decided to revisit his roots. He launched Dr. Vaidya’s in 2016, the eponymous Ayurveda focused start-up. “We see ourselves as a consumer products company. While Ayurveda may not be seen as sexy, it can be brought into the 21st century,” said, Vaidya. “The organic revolution was taking place in the West, and the whole Patanjali wave towards building interest in Ayurveda had also started.” Dr. Vaidya’s manufactures its own products from its wholly-owned facility in Silvassa, sourcing its raw materials from more than 20 vendors across the country and selling its products through a mix of offline and online distribution channels. The Mumbai-based venture isn’t the only consumer start-up looking to cash in on the growing Ayurveda market, presently estimated at USD 3 billion. An emerging segment of food and beverage-focused start-ups has launched Ayurveda-based products including ready-to-drink juices, capsules and nutrition powders. The segment has been dominated for decades by legacy players such as the ₹79,000-crore Dabur India and the privately-held Baidyanath Group. Start-ups have begun to crash the party with their concept of ‘Ayurveda 2.0’—their USP being their ability to combine the vital herbs that could number up to 5,000, with modern nutritional practices. Dr. Vaidya’s is in discussions with multiple investors for its first fundraise, a process that could accomplish by the end of the year. Kiva counts Zomato cofounder Pankaj Chaddah and Max Healthcare CEO Rajit Mehta among its investors. Matrix Partners India invested about USD 4,00,000 in Bengaluru-based &Me, which makes and sells Ayurveda-based nutritional beverages for women. According to BlueWeave Consulting, people across the world are moving towards healthier lifestyles and India is no exception. Indian brands are positioned uniquely to use our heritage of Ayurveda and combine it with modern science to create truly efficacious, world-class products. Ayurveda, or the ‘science of life’, is a 5,000-year-old system of traditional medicine and healing, having its roots in India. But start-ups such as Dr. Vaidya’s, KIVA, &Me, and Kapiva have all seized upon the opportunity to manufacture, repackage and sell products modernized for the 21st century to increasingly health-conscious Indians. Ayurveda, as a concept, has always enjoyed huge awareness and trust but suffered from low adoption, particularly among millennials. Patanjali has played a strong role in reviving that interest and driving (Ayurveda) into the mainstream. The impact of Patanjali Ayurveda, Baba Ramdev-promoted company that over the past four years has shaken up the country’s USD 50 billion consumer product sector, comes through loud and clear. There is an opportunity to build a brand around Ayurveda, given its legacy and acceptance. The founders are putting together a multipronged strategy identifying a niche, doubling down on their supply chain and distribution networks, and building on the Ayurveda brand. For any consumer company, supply chain and distribution are possibly the most important, yet most difficult, aspect to set up in order to not just scale but also compete with bigger, more established peers. But the Ayurveda start-up sector still doesn’t have a well-established supply chain or logistics network coupled with other complexities of claim validation, building trust, and creating the right sources and manufacturing processes. &Me sources its raw materials from about 40 vendors across India and Nepal. The raw materials then get refined at a facility in Nagpur. KIVA also sources raw materials from diverse locations including Sirohi, Jalgaon, and Sikkim. The raw materials are then processed and manufactured in two factories, situated in Hoshiarpur and Jaipur. The distribution channels are a mixture of both online and offline. The companies not only sell its products through their websites and major online retailers such as Amazon but have also tied up with big-box retailers. KIVA has tied up with Spencer’s, Big Bazaar and Godrej Nature’s Basket, apart from online retailers HealthKart and 1mg. &Me has a different distribution strategy. They are not working with national retail chains yet, but with well-known city-specific retail stores like MK Retail, Sowbhagya, FreshOne, which have seven-eight stores each in the city. Thus, there are ample opportunities for this start-up business for establishing a global footprint in the foreseeable future.