Companies

Marico cuts Saffola price after growth slows

Purvita Chatterjee Mumbai | Updated on March 12, 2018 Published on May 10, 2013

FMCG company Marico’s Saffola brand intends to clock double-digit growth by next year after correcting prices. Growth for the edible oil brand slowed down in the past few quarters, due to which it had undertaken price cuts between 3 per cent and 6 per cent since last December.

“During the fourth quarter, Saffola has grown by 5 per cent and the pricing action taken on the brand should help it get double-digit growth next year. We want to get Saffola back on track,” said Saugata Gupta, Chief Executive Officer, Consumer Products Division, Marico, during an analyst meet recently.

Competition has also increased for Saffola in the advertising space, with Adani Wilmar comparing the brand with its Fortune Rice bran oil. “Saffola has been commanding a premium pricing and we wanted to show that our rice bran oil is not only cheaper but even healthier,” says B. Chatterjee, Head of R&D, Adani Wilmar.

Commanding premium

But since Saffola is a blended oil with ingredients such as safflower oil, Marico believes it is justified in commanding a premium. “Input costs such as safflower oil have been rising, but we have tried to correct prices for Saffola. The brand has a strong equity as a blended oil and the new attractive pricing should help consumers upgrade,” adds Gupta.

Saffola’s brand extension into the oats category has also helped in building equity for the mother brand. “Saffola oats is the second largest brand today, with a 14 per cent share in the category,” adds Gupta.

Growth of Marico’s flagship hair oil brand Parachute has also been in single digit (at 5 per cent), during the fourth quarter. “While we have not taken any corrective price action on Parachute, we are sure of getting volume growth back at 7-8 per cent as copra prices have bottomed out and we intend taking pricing action which should bring back volumes,” added Gupta. Marico’s top line and bottom line continues to be dependent on Parachute.

The acquired Paras portfolio is also expected to catapult Marico in the personal care segment. “The Paras portfolio has been growing at 18 per cent, but we expect it would be possible to grow at 20-25 per cent next year. When Paras came to us, it had a 5 per cent share in the category, which has gone up to 6 per cent today. While there has been a slight slowdown in FMCG spends, it has been more in the discretionary categories,” adds Gupta.

> purvita@thehindu.co.in

Published on May 10, 2013
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