The Hindu Business Line : Foods to be Dabur’s core

Chennai, Jan. 9 After the merger of Dabur Foods with itself, Dabur India, which makes products as diverse as ayurvedic medicines and fruit juice, is readying itself for a metamorphosis which will see health and wellness as its focus areas and foods as the centrepiece of this strategy.

While Dabur already has in its fold a smattering of food products such as Real fruit juice, Hommade cooking pastes, honey and other convenience food products, not to mention its blockbuster Chyawanprash, it is now eyeing a bigger opportunity in foods. Mr V.S. Sitaram, Executive Director, Consumer Care Division, Dabur India, affirms the company’s intention when he says in an interview to Business Line: “We have to take a call on investing in foods. The direction is clear. That’s what we are signalling to the outside market too ... by integrating Dabur Foods with Dabur India we intend to be a serious player.”

While consulting firm Accenture has given Dabur a “layout of the land,” the company expects to have more clarity in the next few months and identify where it wants to invest. Post-merger, the foods business will be able to benefit from Dabur’s extensive national distribution network and other economies of scale. “We will leverage that for building a much larger foods gameplan,” says Mr Sitaram. He points out that any area will call for serious investment and to stay the course, “… because it is not only production but it is also R&D, brand-building and all other capabilities.” Each new segment may call for significant brand building as Real (Dabur’s fruit juice brand) cannot be extended to every category.

On the product segments within foods, Mr Sitaram rules out the company entering staples as it is a low-margin business. The market, he says, is ready for a variety of processed foods and that may be an area of focus. As in other developed economies, in the Indian economy too home and personal care products have scaled up and with more affluence, processed foods have to start expanding.

“Our opinion is that India has reached that level of affluence where people are in the market for more convenience, more variety and increasingly in the health and wellness area ... so we need to revisit the whole approach to the foods business to see what could be our foods strategy,” he adds.

He elaborates that there are four hot buttons for foods: health and wellness, convenience, mobility or food on the go, and for pure pleasure, “Food as basic nutrition today is a commodity, but the other four are major drivers and all the food companies are shaping their portfolio around these drivers.”

Elaborating on Dabur’s positioning in the market, Mr Sitaram says that the core of Dabur has been health and wellness.

Trends the world over show that consumers are tending more towards wellness. Many of the brands that form Dabur’s portfolio (Chyawanprash and its recent variants for instance) are positioned on this plank. “Wellness, we believe, is one big holding area for Dabur with strong underpinnings in health and hygiene.”

Dabur, he says, enjoys strong equity in wellness areas, with its chyawanprash and honey. It is the other areas where the company will have to work on.

“There’s something that can be made uniquely Dabur; so we’ve got to craft that and make it something that belongs to us,” he adds.

More Stories on : Food & Dairy Products | Strategy | Dabur India Ltd

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