"Customers prefer taste over health in snacking": Harsh Mariwala, Marico

One out of three Indians use a Marico product, and one out of 10 coconuts in India are used to create a Marico product. This was the opening vein of the first session with Harsh Mariwala, founder and chairman of Marico, which was hosted by Supriya Paul, co-founder, Josh Talks. This discussion was the beginning of the virtual Josh Dialogues series.

Paul began the discussion by asking Mariwala about the beginning of his career – in 1971, when he joined the Bombay Oil Industries. Mariwala told the audience that he did his graduation from Sydenham college in Mumbai (then Bombay).

He originally wanted to study further, but did not get admission in IIM Ahmedabad, IIM Calcutta, or Bajaj Institute of Management. He recalls his family business, which had its office in the middle of the chaotic Masjid Bandar market.

At the time, the business had three divisions – chemicals, spices, and edible oils. The edible oil was unbranded, and sold to other industries (biscuits, paint, etc.) – in barrels to industry, and sold in loose to the consumers.

Interestingly, at the beginning, Parachute and Marico were also among those products that were sold in bulk. While trying to establish a distribution network, Mariwala would tour areas of Maharashtra, like Vidarbha, where he’d stay with the distributors themselves after visiting them, as there were no hotels in small towns at that point.

He said he didn’t have a mentor, and in his early days as a businessman, his failures were a result of trying to cut costs. “For example, I didn’t have a quality assurance department, or a legal department. I didn’t realise the importance of the two until I ran into issues with the quality of one of the products in the market, and had to withdraw it."

Mariwala also admitted to taking shortcuts in product development, and eventually set up all these departments in the company to ensure that these issues don’t crop up again. He mentioned that when he started out, he faced product failures while launching unrelated business ventures, which, he says, could be because of a variety of reasons since the FMCG industry is one where a winning formula is hard to hit (upon).

He gave the example of a product he had tried to launch with brand Saffola in the ‘healthy snacking’ category, which never took off. “The learning from that category is that when it comes to snacking, people prefer taste over health. Snacks are normally had in the evening, or with a drink, and people prefer a tasty snack over a healthy one at this time. It was a healthy snack, but not a tasty one and, hence, it was rejected by the consumers.”

It was this learning that he used while launching oats under the Saffola brand name. Previously, plain oats existed in the market. So, the brand took the opportunity to launch a masala variant. “We went overboard on taste after the failed attempt at launching a snack, and we targeted each state to understand what the taste profile for each state is.”

When it comes to his advice to youngsters, who want to start their own businesses, Mariwala said it's important to build a career based on your strengths. A person can join a startup where he/she has a good equation with the founder to get a feel of how the business runs, he added.

You can watch the full discussion below: