As Dabur invests in a germ-kill soap, we interview ex-CEO Sunil Duggal, who has led the company for 17 years. "Dabur’s future is far more in the immunity space than sanitisation" he says.
Dabur has had a busy year. In February, Chyawanprash was trending after comedian Vir Das brought up the ingredient list in one of his sketches. In March, while India was in the first stage of lockdown Dabur entered the hand sanitiser category. In June, it launched an immunity kit, which included Dabur's Chyawanprash, Honey, Honitus, and Honitus Hot Sip.
In July, Dabur marketed honey’s immunity-boosting benefits with an initiative called 'Cha with Immunity Benefits of Dabur Honey’ in Kolkata. They distributed complimentary immunity kits to tea drinkers in a bid to boost immunity and encourage them to follow a healthier lifestyle.
In late July, Dabur launched a soap named ‘Sanitize’. Ever since the coronavirus pandemic began affecting India, Dabur focussed on immunity, but with the launch of ‘Sanitize’ soap, it appears to be attempting to foray into the hygiene space.
We spoke to Sunil Duggal, former CEO, Dabur India, to closely analyse the stake that the company is attempting to claim in this segment. Duggal has been with Dabur for 24 years (since 1994) of which, he has worked as CEO for the past 17 years (from 2002-2019.) He has previously worked in companies like Wimco and PepsiCo.
When he stepped down, Mohit Malhotra was appointed in his place. Duggal oversaw Dabur’s transformation from an Ayurveda company to an FMCG-led diverse company with a range of products, including personal care and home care, in its portfolio.
In the context of the Coronavirus pandemic, Duggal mentions that both hygiene and immunity have been far more salient in the consumers’ minds today. So, Dabur’s product focus is shifting towards the hygiene area.
“Immunity was always important, but the need gap for immunity is higher than ever before. That’s why immunity products are doing well, as far as I can see,” he says.
“In the past, Dabur didn’t focus on sanitisation so much. We had a couple of brands in that field, but it was not the most important part of Dabur’s portfolio. But with the need for sanitisation, sanitisers, and other germ-killing products, it’s natural that Dabur would want to extend its portfolio in that direction,” he added.
Duggal says that Dabur’s equity can play well in this sector, since it’s entrenched in the health and wellness space. “Dabur’s ‘Sanitize’ brand is a logical extension of the portfolio, which is something that may not have happened, if not for the pandemic.”
"Dabur has always had sanitisation products in the form of toilet cleaners, sani-sprays, etc., but now the management has decided to bring sanitisation under the Dabur platform. Both hygiene and immunity led products serve different purposes. Immunity building is a slow, long-term process, but germ killing vis-a-vis sanitisation is a quick solution. I think Dabur’s future is far more in the immunity space than (in) the sanitisation space, which is easily replicable and anybody can do it,” says Duggal.
He explains that there are some brands that are deeply entrenched in the sanitisation space – players like ITC’s Savlon, RB’s Dettol, etc. He opines that the immunity platform is something that Dabur should leverage because it’s a long-term platform which is unique to Dabur.
"Immunity building is a longer term, slower process but germ killing and sanitisation is a quick solution. I think Dabur’s future is far more in the immunity space than in the sanitisation space which is easily replicable - anybody can do it."Sunil Duggal, ex-Dabur CEO
“Sanitisation is something that’s offered by a whole lot of companies and everyone is trying to get into that space right now. I don’t see any big consumer facing company which is not doing it right now. Many of these brands are already quite salient in this space, unlike Dabur,” he says.
Duggal elaborates on this thought, “Everybody’s getting into sanitisation, and right now, it’s a bit of a bubble. The interest in this category has gone up from pre-Corona levels, in terms of the number for companies that are not already in this space.”
“I think the Dabur management is better off investing in the immunity space since it has heritage in this field. It’s a more natural platform for it. Getting into sanitisation can be done as a tactical measure, by leveraging supply chain and networks to get some quick gains. But, I don’t see it as a long-term value proposition.”
"Getting into sanitisation can be done as a tactical measure by leveraging supply chain networks to get some quick gains, but I don’t see it as a long term value proposition."Sunil Duggal
Duggal also adds that in a post-COVID world, sanitisers may not be as frequently available as they are right now. “The need for health, hygiene and sanitisation right now is much higher than pre-COVID levels, and there is a fundamental shift in people’s thinking. But, I think it’ll remain higher than pre-COVID levels, even in a post-COVID world.”
"I think the Dabur management is better off investing in the immunity space since they have heritage in this field; it’s a more natural platform for them, rather than getting into the sanitisation space."Sunil Duggal
When it comes to marketing messages, he points out that the digital medium is the obvious platform of choice right now. Even though TV consumption has increased, Duggal says that if there’s a lockdown, there’s no point spending a lot of money on TV advertising.
“People may not be interested in the ads since they can’t go out and buy the product. Everybody’s cutting down on spends for sure. We’ve seen that the advertising and promotional spends are coming down sharply, and they (the spends) are transitioning to digital from traditional media.”
“Print is very low now, but television continues to remain salient, provided the supply chain is able to supply the products and meet consumer demand, i.e., the consumer is able to access the products, despite lockdown and other issues.”
Ashutosh Garg, a consultant, explains that real immunity is something that a person builds within himself, irrespective of the surroundings. “I’m not sure I see a match between using a product, which is meant for sanitisation, and using that product to build immunity. Just because I wash my hands with a particular soap, or use a specific type of hand sanitiser, does that mean I won’t contract any infections now? No, that’s not the case.”
Garg is in a unique position to comment, since he worked for ITC Limited for 17 years. In addition to this, he spent 8 years in the aerospace industry after which, he founded Guardian Pharmacy in India in 2003.
He agrees that sanitisation and immunity can’t be used interchangeably, and play two very important roles. “Sanitisation is related to cleanliness and hygiene. A smart marketer may want to do a crossover between immunity and sanitisation. But, I think they’re actually contradictory to each other.”
“On one side, hygiene and immunity are complementary to each other. But on the other, when a product claims to say that I can provide you with both, then I think crossover products will find it difficult to sustain or certainly will not be able to get the consumer’s trust.”
Garg uses the example of hand-washing requirements during COVID. “If a marketer wants to make a claim that his product can boost my immunity, it has to come with messaging on the lines of ‘using my product can help cut down hand-washing from, say, eight times a day to four times’. In fact, a mask is one of those few products that can make the claim - boost immunity as well as protect from the virus,” he signs off.