Marico expands its food play; plans to invest in new digital brands

Fast-moving consumer goods company Marico is on a transformation journey. The company, whose mainstay is edible oils, is now focussing on new vectors of growth like food, in particular healthy food and digital-first brands. In June 2022, Marico acquired 54% stake in health food brand - True Elements (food category). In July it acquired a majority take in Just Herbs, an Ayurvedic personal care category). Going ahead, the brand plans to further invest in new digital-first brands.

The brand recorded a turnover of Rs 9510 crores in FY22. The brand earns 77% of its revenue from India from the sale of products it markets under brands such as Parachute, Parachute Advansed, Saffola, Saffola FITTIFY Gourmet, Saffola ImmuniVeda, Coco Soul, Hair & Care, Nihar Naturals, Livon, Set Wet, Mediker, Revive and Beardo. 

How does a legacy company Marico adapt to emerging trends such as D2C commerce, premiumisation, and evolving consumer habits?

afaqs! spoke to Sanjay Mishra, COO-India & CEO - New Business, Marico India, to understand about the brand's latest strategies, campaigns, acquisitions, industry trends and plans for the upcoming year.

Edited excerpts;

Consumers spend a lot of time online, and brands are scaling their digital presence. What do large FMCG brands have to gain from taking e-commerce routes? How is Marico responding to evolving consumer habits?

We have a significantly large presence in e-commerce already. The contribution of e-commerce to our overall revenue is close to a double-digit figure. We remain focussed on understanding new consumers and their demands.

We think digital evolution is happening across India. It is more of a capability of investment in logistics that large e-commerce players are making, i.e. in deciding in what all Pin codes they can serve.

Big e-commerce players are investing in logistics so that they can serve remote villages and areas. However, Marico products already exist in those areas. Marico has products available across all pin codes in India.

Our premium portfolio is on e-commerce, however, over time it will represent the Marico footprint. Some of our additional sales are coming from mostly urban areas, as there are certain categories where we are preferentially playing with e-commerce.

What are the new categories the brand plans to invest in?

We remain focussed on coconut oil, hair oils and edible oils. We will continue to focus on two new vectors of growth i.e food and our healthy food portfolio - FITTIFY. Other than this, digital brands are where we have invested in. Creating new brands as well as acquiring new brands is part of our growth strategy. 

Marico will remain focussed on expanding its digital footprint which will happen in the spaces of the brands that we have acquired such as Beardo (in personal care), Just Herbs (personal care), and True Elements (food). Apart from this, the food side is where Marico has done a lot of product launches under the brand name Saffola. The brand will continue to expand into new categories under Saffola and FITTIFY. 

What is the target audience for your healthy food portfolio? Where is the demand coming from? 

The prime target audience is those people who look for tasty food and at the same time are very conscious of their health. The brand Saffola is synonymous with good health and 'Fittify' represents the fitness focus. 

Our consumer point of view is that when people want to consume food, they make certain kinds of choices and some of the choices that they make are based on whether or not they believe the food is healthy or unhealthy. The fact is if you are making a choice with food which you are consuming just because it is healthy, you will not really enjoy the food as much as you want to. So, the insight here is that the brand has to create a healthy product and have to keep it tasty as well for the consumer's preference. 

 What are the major trends that Marico has observed in the year 2022 in the consumer goods industry? 

In India, we will continue to see healthy growth in the consumer business and the reason is that there is ample scope to keep increasing penetration and drive consumption.

We have noticed three major trends in 2022. We are focussed on the fact that in the food space we should be participating in areas that are healthy. Our focus will be on health-conscious consumers. For example, we launched Saffola soya chunks, Saffola soya bhurji, and other new categories under the Saffola brand. 

We have also made the choice of acquiring Beardo, Just herbs, True Elements. We are creating a pool of brands which can play in the space of male grooming, food, cosmetics. This will remain our area of focus. 

What are the predictions of the fast-moving consumer goods industry? 

I think that demand from rural markets will come back. Also, the world is now plagued by rising inflation throwing challenges ahead of companies. Corporates are adopting new routes to navigate through these tough times. Therefore, 2023 will allow companies to be more competitive. Considering all of this, my larger view is that consumption will go up in the coming year and Marico will see competition across all categories we participate in. 

In terms of market, the market will continue to grow both at the top end where people will premiumise in personal care and at the bottom end, unbranded to branded penetration will go up as well as it will increase in the digital space too. 

Across the different cross-sections of consumers, one will see consistent growth in terms of consumption and penetration.