How D2C Startup Durmeric Is Innovating To Carve A Niche In INR 71K Cr Ayurvedic Products Market

Ayurveda, the ancient Indian science of health and well-being practised for more than 5,000 years, has apparently lost its mainstream appeal in the age of modern medicine, thriving on mass-produced and easy-to-access prescription drugs, nutritional supplements and personal care products. In contrast, the product ecosystem under ayurveda has historically grown slowly but steadily, mainly because these are personalised medications based on natural products and primarily focus on the holistic approach.

Although ayurvedic products have not lost their relevance in treating diseases and promoting health in a natural way, a rebranding was needed in sync with the urban population’s mindset. Veteran industry players such as Dabur, Himalaya, Biotique and others have recognised this gap and come out with everyday products containing herbal extracts. From toiletries to beauty products and beverages to cooking oils, a host of consumer goods claim to bring the goodness of nature to our life. The growing awareness of harmful chemicals has also driven people to the age-old and traditional solutions offered by ayurveda. The only issue: Things were not growing at a fast clip. Informed buyers may have made a beeline for such esoteric products, but the mass appeal of off-the-shelf products has not waned.

Until, of course, Patanjali Ayurved hit the market in 2006 and saw a significant rise in the popularity of traditional ayurvedic products. With endorsements from the cofounder and celebrity yoga teacher Ramdev, the company followed a business model to improve the use cases of ayurvedic products by selling everyday food items like biscuits, oats, instant noodles and more, all made from natural ingredients, thus bringing ayurveda back to Indian households.

According to Research and Markets, an Ireland-based market research organisation, the ayurveda market in India was valued at INR 30K Cr in 2018 and is expected to reach INR 71K Cr by 2024, growing at a CAGR of 16.06% during the forecast period.

In essence, modernising ayurvedic products and making them more relevant to new-age consumers have been an ongoing process. In recent years, startups such as Mamaearth, Kapiva Ayurveda, Gynoveda, AADAR and Durmeric have entered the niche segment and are trying to reposition ayurveda in the mainstream consumer market. 

Durmeric Products’ Ease Of Use Is A Market Differentiator

Madurai-based Durmeric was set up in September 2020 by Mannar Manan, Vinod Puthen, Balakrishna and Rajesh Ramaswamy. But unlike traditional practitioners, the co-founders wanted to improve the convenience factor, turning specialised ayurvedic products into everyday food items. For them, the solution came in the form of herbal extract drops — liquified versions of herbal products that can be added to anything edible and consumed directly.  

“We found that many people wanted to use herbal products regularly but preparing the same was a hassle. Our target was to create a product that would make using ayurvedic products as easy as drinking a glass of water,” says Manan.

It was a difficult task, though. The team intended to develop a product that was liquid, colourless and miscible. To make this possible, the startup uses an oil extraction process to create nanoemulsions of the herbs. Durmeric claims that the product has high potency as it can be quickly absorbed due to the size of the particles and the process used. 

The startup is part of the Madurai Agribusiness Incubation Forum (MABIF), an initiative under the National Bank for Agriculture and Rural Development (NABARD) that promotes agripreneurship in the southern region of Tamil Nadu. Durmeric is also linked to NABARD’s farmers’ market to procure the raw materials for its extracts. The startup’s manufacturing unit is located on the premises of MABIF.

Durmeric currently offers 10 products developed from everyday herbs such as cinnamon, tulsi, rosemary and ginger, and its average ticket size is INR 388. Since its launch, it has generated a revenue of INR 14 Lakh and is growing at 15% MoM, claims the company. 

Durmeric’s D2C Journey And The Challenges It Faced

Since the company started its operations amid the Covid-19 pandemic, it had to face unique challenges triggered by the new normal. For instance, the cofounders worked for eight months without meeting each other while creating the entire product road map. They also completed all registration processes online and worked on strategies for customer acquisition, brand narratives, in-store product placement and raw material procurement during a lockdown. 

The startup decided to go for the direct-to-consumer (D2C) model to improve profit margins with limited manufacturing. It was a sound move as relying upon middlemen across the supply chain would have diminished its sales turnover. It also explored pan-India supply to create a larger funnel for customer acquisition and scale faster. 

Durmeric had initially tied up with an independent shipping company to manage logistics and fulfilment, but things did not work out well. There were issues with last-mile deliveries, discrepancies in case of non-deliveries and a lack of real-time tracking and monitoring. Eventually, the ayurvedic startup partnered with Shiprocket, a New Delhi-based logistics solutions aggregator, and managed to resolve these issues due to efficient handling of deployment and delivery operations. Durmeric was also able to ramp up its sales and has sold 70K bottles of herbal drops so far.

“Marketplaces like Amazon or Flipkart will help increase sales numbers, but a company does not gain much in terms of profit margins (due to the referral fees charged per transaction). Selling directly to customers is the only way to earn substantial profit margins. However, managing the entire logistics and fulfilment in-house is not possible for a small D2C business. So, D2C enablers like Shiprocket help businesses like ours,” says Manan.

Much like other early-stage startups, Durmeric found it most challenging to create an effective brand identity and reach out to customers in the best possible way. The company started by creating its social media presence and placing google ads but did not see a lot of conversions. As all cofounders came from the manufacturing background, marketing and customer outreach — two unique aspects of running a successful D2C business — plagued them for a long time, affirms Manan. The startup got into Shiprocket’s Rocketfuel programme which helped it in some of these aspects. 

“The Rocketfuel programme has helped us think soundly across business verticals, and it especially helped us about branding. Then there was a lot of useful input regarding storytelling and online marketing. In fact, some of that made us rethink our brand narrative, and we have decided to spend some time rebranding our company,” says Manan.

Besides working on the rebranding part (the Rocketfuel programme gave the desired push to this), Durmeric is keen to implement other growth plans. To start with, it is planning to launch a new product line for overseas markets. It also is developing a flavouring solution for the food industry. Using its nanoemulsion technique, the ayurvedic startup aims to create flavouring agents that will ensure more consistent flavours without leaving any residue. Durmeric is already in talks with various business owners for trial runs of the flavouring agent and believes it will make the official launch before the end of the year.