Dabur India is optimistic about a “gradual uptick” in consumption over the course of FY25 supported by lower inflation, expectations of normal monsoon and continued government expenditure on infrastructure. The company aims to expand rural distribution to 1.3 lakh villages by this fiscal-end and expand its portfolio of premium offerings for urban consumers.

In a letter to shareholders in the Annual Report FY24, Mohit Burman, Chairman, Dabur, stated that the company now has one of the largest and deepest distribution networks in the industry, covering over 7.9 million retail outlets and reaching 1.22 lakh villages. “We have added two lakh outlets to our network during the year (FY24), which marks the highest addition by any FMCG company in India. Our direct reach has also gone up to 1.42 million retail outlets, and our newly carved out Therapeutics division is scaling up well with our coverage now extending to 1.1 lakh Ayurvedic and Allopathic doctors,” he added.

Digital First brands

Burman added that the company’s “Digital First brands” grossed a collective turnover of over ₹100 crore. The FMCG major said eight out of every 10 Indian households is now a Dabur household, using one or more of its products.

He said that the FMCG sector witnessed a period of subdued growth during FY24. “The household consumption trends reflected a reduction in bulk purchases by consumers to manage expenses, allowing for discretionary spending on smaller categories. Low wage growth in rural India also resulted in downtrading by consumers. Climate change marked by uneven weather patterns such as unseasonal rainfall, delayed and contracted winter also impacted our seasonal portfolio,” Burman added.

He expressed optimism about a gradual uptick in consumption trends over the course of FY25, considering predictions of a normal monsoon, improving macroeconomic indicators, continued government spending on infrastructure building and lower inflation.

“We are confident about the resilience of our business strategy. Our Power brands will continue to drive growth as we expand deeper into the hinterland and consumer households. We will continue to expand our rural footprint in the new fiscal and have targeted to reach 1.3 lakh villages by the end of FY 2024-25, up from 1.22 lakh at present. For the urban consumers, we will be expanding our portfolio of premium offerings and looking at entering adjacent categories,” he said.