It is science vs faith in case of Dabur & Patanjali: Amit Burman

Burman, however, says Dabur will not price down its products to fight competition but instead look at upping their ante on existing products.

The company plans to introduce some new products like sugar-free and chocolate-flavoured Chyawanprash.Below is the verbatim transcript of Amit Burman's interview with Ronojoy Banerjee on CNBC-TV18.Q: This gym looks fabulous. Is this how you spend your weekends mostly?A: Mostly. Actually almost everyday.Q: So, how long do you usually spend here?A: Usually about an hour, sometimes about an hour and half.Q: You do this pretty much on a regular basis or only for the weekends?A: Five times a week at least.Q: You are making me feel guilty, by the way because I have been procrastinating going to the gym.A: Once you have fun doing anything, you will love it.Q: So, what is it? I am not much into gyming, what are the two or three things that beginners should do about gyming?A: First you need to warm up and not go into the gym or into any of the machines straight away. Then depending on what you want to do like I do twice or thrice a week, about half an hour cardio and then cross training or running. And then do a little bit of crunches and a lot of weights. So, I enjoy doing the weights more.Q: Do you also go out running or you mostly like a gym person?A: I am more of a gym person and usually if I want to do something outdoors, I go for a swim outside.Q: So which are the some of the sports that you are passionate about?A: Of course, all of India is passionate about cricket. I watch cricket a lot, I used to play in school. But tennis I used to play a lot and squash. So, both the racket games, I enjoy.Q: Tell us a little bit about yourself and your background. You have grown up in this rich family which has this rich legacy, 130-135 year old legacy of the Dabur Group. So, growing up, did that put a lot of pressure on you because you knew one day would come when definitely you would have to play a pivotal role as far as the group is concerned?A: It was a lot of pressure because the elders or my father and uncles and all did such a great job of moving Dabur from where it used to be in 1982, a very small company into this big giant and went for the IPO, very successful, now very successful company. So, it was very difficult to fill in those big shoes. So a lot of pressure on us.However, from the beginning, what we as a family, more the elders had decided because of our fifth generation coming in to professionalise the business and we decided that none of the youngsters are going to come into the Dabur part of the business.So, I ran a food business which is the Real fruit juice business which was separate company as such and one of my elder cousins, Dr Anand Burman, he ran a very successful pharmaceutical business. So, both are very disconnected from Dabur as such. It was their own entity as such and in those years, we started professionalising the company, professionalising the management._PAGEBREAK_Q: In fact, I believe Dabur is one of the first groups in India to have consciously made that approach to basically separate family from business.A: We are one of the few ones. We probably were the pioneers in doing it and once we professionalised the company then Dabur Pharmaceuticals was sold off and Dabur Foods was merged into the company. So, it became one big Dabur as such. Foods at that time had become about 10-11 percent of the total business. So, it is now a big business for Dabur. It contributes 15 percent of the topline to the Dabur. So, we are all now doing our businesses and doing our own things.Q: Do you have a family council?A: Yes, we do and we meet every quarter. So after every board meeting, we have a three hour meeting of the family council and the family council consists of all the members of the family above the age of 25. What we discuss is mostly personal issues to some extent, but a lot of how we should grow Dabur, what are the new areas, categories we should be looking at, new products, new geographies, evaluating it, so that is what we discuss.Q: So, what are some of the things that you see, some of the landmarks that you see for Dabur in the coming 5-10 years?A: The way the category is growing, ayurveda is now coming to the mainstream, health is becoming a concern for everybody, youth or old. So, it is the right time for us. We have to be more in the healthcare side of the business. We moved into the FMCG and of course, we have healthcare, but more focus now should go in the healthcare part.Q: But health is anyway your big revenue generator, 25 percent.A: Health is underlying for all the products we do. More and more, it has to go towards the health side, more to create awareness to people how they can improve their health, how they can enhance their life as such. And that is where our research and development (R&D) is going towards.Q: You have got two kids and do they follow you sometimes in your boardrooms perhaps, how you work? Are they also kind of picking up the ropes?A: They are too young. My son is studying in boarding, he is in the UK. So, he does not get much time here. But my daughter is definitely here, but she is doing her 12th, so she is very entrenched into that.However, in any kind of family business, all we always get the business back into home. So they always are knowing at the dining table what is going on in Dabur, what is going on in my restaurant business. Everybody is a foodie in my family, so they love talking about different foods, different things they have eaten somewhere and what I should be doing in my restaurant. So, that conversation keeps on going.Q: I love your restaurant, the Fresco. It is a lovely concept. The decor is quaint and there is something about it. Every time one passes by, there is something. So who decides the decor? Do you have your own ideas, or your wife?A: We have got our designers and Fresco as a concept is being conceived to be a fresh and healthy concept. So, it is more open, more lit up, it gives you that freshness kind of feeling.My wife helps a little bit on the decor side, but we have got professional designers and what we are trying to do is try and look and feel of each restaurant basically, or 30-40 percent remains the same and then it changes depending on the area it is. So, we are trying to become a restaurant chain company. So a lot of features remain the same.Q: I am at the gardens of Amit Burman and he is going to make a salad for us.A: Very healthy, very simply, no cream. Just olive oil and some salt and pepper and some lemon with some olives and some dry fruits. So very simple. Just toss it up. Some tomatoes, cucumbers, olives, I do not know if you like eggs or not.Q: I am fine with anything.A: Okay great. Some eggs in that. There is olive oil. I hope you like the taste because it is very healthy, it is not too difficult.Q: Looks good at least.A: Now, you just toss it.Q: Lovely, this some really healthy stuff.A: And some healthy juice to go with it.Q: Real Wellness.A: Yes.Q: You are a well known restaurateur, are you also a cook? Do you cook at all at home?A: Very little. In my college days, I used to cook everything, but since I have come back to Delhi, I have been a little bit lazy. But salads is easy, little bit of curries and all, I can do.Q: Tell us a little about your passion for food and which basically prompted you into starting one of the most successful restaurant chains.A: My passion has always been in food since I finished college and I can to India. I have always been involved in foods.Earlier, from the Dabur, I was more in the manufacturing and marketing and distribution side. And now, in the restaurant side, in the retail side, so I have seen both areas of the food business.When I came into Dabur, we did not have a food business at all. As I was mentioning in the gym that Dabur being a big company, we were trying to professionalise it. I decided to move outside of Dabur and start a fruit juice business. That idea came very simply from that every day in the US going to college or going to work, you always have a glass of juice before you leave, even though you do not get breakfast.When you came here, there was nothing like that in the packaged fruit juice industry and that was the idea and people in India love juices. Every small shopping area has a juice wala. But there was no packaged juice at that point of time. So, that is where the idea started and now we have grown into a big business for Dabur. This is the largest fruit juice business in India having about 55-56 percent market share.From there, when I merged the business back into Dabur, retail was coming up in a big way and I looked more into the food space. A lot of the other people were looking into the megamarts or the hypermarts of this world. I felt that every mall or retail complex will have an entertainment and a restaurant kind of thing. At that time, there was nobody except the foreign players who were on the organised side in terms of McDonald’s and KFC’s, there was nothing Indian. That is where the attempt was and that is where we started.Q: How many restaurants do you have now?A: Now close to 100, I would say in terms of restaurant outlets._PAGEBREAK_Q: Tell me a little bit about your FMCG business because ACNielsen has come out with a report saying that growth will remain tepid in the foreseeable future. In a situation like that, increased competition. How is Dabur grappling with it and in terms of growth do you see enough headroom for growth?A: In all sectors growth is becoming an issue not only FMCG. When you talk about competition, there is competition and there is disruptive competition.Competition is always good, it always keeps you on your toes and like I was saying earlier, people are going towards ayurveda, people are going towards health which is good for us.Earlier, ayurveda only used to be appealing to the rural area because it was prescribed by veds. But now, all the urban people are looking at ayurveda as an alternate, which is good for us.Health is becoming a big issue and people are looking at health in a big way, want to be healthy, want to be eating healthy foods, be it juices or other foods, which are healthy as compared and lead a healthier lifestyle. Therefore, our healthcare business is something which we see a lot of growth coming in.So, FMCG will always see a problem, not a problem, rather saying it is going to be tough.Q: The 'P' word that many companies are now, many FMCG entrenched players are now beginning to take more seriously; is Dabur taking Patanjali more seriously now?A: Of course we have to give them some credit. They built an empire out of nowhere and because of this disruptive competition it has made us also move up look at our categories in a different way. We don’t see the 'P' word as a bad word. It is a good thing for us because actually what has happened is, it has grown the category as such. Ayurveda has come in the limelight, everybody is talking about Ayurveda. Whoever I meet is talking about Ayurvedic products and so on so forth.We are the largest player in Ayurveda. We have got 130 years of history, science, research behind us. So, we are probably the better poised to go into this as a winner. What we are trying to do is going more from a commodity, health kind of area into more of a niche area. We have done that with our Chyawanprash from a normal Dabur Chyawanprash, which is our based business. We moved towards sugarfree, to Ratnaprash to chocolate flavour Chyawanprash which is doing very well in those category and they are at a niche.We are upping the ante, we are now going more into science in terms of telling people the amount of research we have. So, there is science against faith is where we are playing. We are going more towards the science area.Q: A word on the under pricing that is where it seems he his disrupting the market that you have talked about, bringing down for instance in your honey products it is like some 33-40 percent difference especially when you compare it to 500 grams Dabur Honey with Patanjali Honey. How do you deal with such pricing?A: It is difficult. As I said we have to up the ante and over to more niche products into honey. So, one is our normal commodity honey which you see Dabur Honey which is more premium as compared to all the other honeys because it is properly filtered and properly packed, hygienically packed. It is more going into honey jams or honey products to do with honey into the niche side. I don’t want to go to our new product areas but that is what we are trying to do.Q: You will not price down to take on Patanjali?A: I don’t think we are going to do that at all. Our honey commands a leading position. Our honey at least from all the research, all the laboratory reports show is a much better honey. So, we have a full science and R&D behind it. So, we are not going to lower our prices now.Q: You like cooking, you work out a lot in the gym but is there any other passion especially at home that you pursue?A: I like watching movie and I have a home theatre. Come and have a look, we can talk more there.Q: What kind of movies do you like watching?A: I like thrillers. A lot of English thrillers are there but I saw a lovely thriller called Drishyam, which I saw here. I saw the new movie Kapoor & Sons.Q: Would you look at ever producing a movie?A: We cannot say never but no plans as of now.Q: You are on the board of PVR, you know how movie business works, what are the movies that do well.A: I know and I know how tough it is. Ajay is doing a great job managing it but it is a tough business.Q: Any inorganic growth potential for Dabur that the group is or the family is contemplating?A: We have done a couple of acquisitions in the past and they have worked out well for us. It takes some time to get these things amalgamated into the company. It is very difficult to make a target and then go after that because a lot of Indian businesses are owned by families and families are always emotional about their stakes in business and they may want to sell but if you approach them, they will say no we are not for sell. So it has to go through a regular process. So we cannot aggressively go for acquisitions. But yes, we are looking for it.Q: What are some of the two-three main challenges ahead of the family in terms of the business, in terms of perhaps more professionalising the firm?A: I think challenges today like we were talking earlier that the growth rates are coming down in the FMCG. For us, our international business is growing at a faster pace. So we want to focus on that.As a family, we totally professionalise our business, so none of us are involved in the day-to-day running, which is very good and I think it is very healthy for us as a family because the conversations are more to do with how everybody is doing in theri different businesses, more of a helping hand that we talk about our businesses to each other and say in my business that is a similar kind of thing in the growth area it was happening and this is what I did and we learn a lot from each other in terms of -- because we are all in that same stage of growing our different businesses. So a lot of learnings there. It has become more healthy.Q: 33-34 percent of your overall revenues now come from international business?A: Yes about one-third.Q: How much do you see the headroom for growth and is that also part of your de-risking strategy when FMCG growth slows down in India?A: It is a de-risking strategy and it will probably go close to 40 percent the next couple of years. We just have a new acquisition, the US -- not new but six-seven years old which is now spreading towards Africa and so on and so forth. So it is a de-risking strategy, FMCG growths are a challenge here but maybe this year, let us see how it works out over the years going forward.