Marico bets on digital and food segments pay off with 20% revenues expected by next year

Marico’s Managing Director Saugata Gupta’s bet on food, digital, and premium personal care are paying off, as the company expects to generate 20 per cent of its revenue from these businesses by next year.

Marico had pivoted into these new areas three years ago during the pandemic as part of Gupta’s strategy to future-proof its business. Overall Marico is set to cross the ₹10,000 crore revenue mark this year

“Premium skin care, food, and digital, which were 5 to 6 per cent, will be 20 per cent of our India business by next year. This has been a silent evolution of our business that de-risks our future. If you see, the coconut and value-added hair oils cannot grow more than 10 per cent as they are highly penetrated. Further, among all Indian companies, we have the most robust international business that has given us double-digit growth over the last 10 quarters, and the business has been profitable,” said Saugata Gupta, MD and CEO of Marico, to businessline. 

• Also read: FMCG industry clocks volume growth in March quarter

Investments

Marico has been actively investing in direct-to-consumer products. Marico acquired stakes in HW Wellness Solutions Private Limited, which owns “True Elements,” a digital-first brand that operates in the snacking and breakfast segments.

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Similarly, it had acquired a stake in Just Herbs, an organic cosmetic beauty brand, and Beardo, a men’s grooming brand. In the premium personal care segment, the company has Pure Sense, which offers skincare, fragrances, bath, and beauty products. While the digital businesses have so far been running as separate entities.

Gupta is now embarking on a plan to create synergies between the four digital brands and the parent company, Marico. This is being done to bring down costs and leverage strengths within the group in a bid to drive profitability.

• Also read: Marico to expand portfolio in MENA

“As a category leader, we have to drive category growth. With all the spending, perhaps my core has been under-resourced. I do not have the vanity of a cash burn, as we are a listed company and have to deliver shareholder value, and it cannot be done at the cost of another,” added Gupta. 

The company has also set up a nanomanufacturing unit to manufacture products under its D2C brands.

“We have now created a nanofactory unit that has common textile, logistics, and sourcing and is now operating as a house of brands. This gives us a go-to-market as we have the first-party data and we can build a powerful CRM model,” said Gupta. 

New launches

In the food category, Marico has been launching new products regularly. The company’s healthy food portfolio (non-edible oils) includes oats, honey, chywanprash, kadha mix, and soya chunks, among others, under the brand Saffola. Marico also recently introduced mayonnaise and peanut butter to its Saffola range.

Marico posted a 20 per cent increase in consolidated net profit for the quarter that ended in March. The company clocked a ₹302 crore profit in the quarter, compared to ₹251 crore recorded in the same quarter last year.

Further, the company witnessed a 7.9 per cent dip in net profit from ₹328 crore reported in the December quarter.

• Also read: Marico clocks 5% increase in Q3 net profit

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