Companies

Marico plans to inject a booster dose to foods biz

Vinay Kamath Chennai | Updated on September 13, 2020 Published on September 13, 2020

The KeepSafe range by Marico Ltd

With immunity-building foods and between-meal snacks, FMCG major expects to boost sales in category to Rs 500 crore in two years

Saugata Gupta expects to be working out of home from his Mumbai apartment till the end of September. It’s been like that since the pandemic started for the Managing Director and CEO of Marico Ltd. But now, work days on video and phone calls are long, stretching from 8.30 am to well past 9 pm as he strategises the launch of a clutch of new products, oversees marketing plans, and drives sales to new highs even as he worries over distribution.

With Covid-19 still raging, Gupta says consumption habits have now been reset into three broad categories: health and hygiene; the immunity plank for foods and, third, ready-to-cook foods or between-meal snacks. “Once things settle down, demand may come down in many categories though that level may be higher than what it was pre-Covid. But I see a permanent reset on these three planks,” he says.

The most ambitious plan that Marico has is in foods. Extending the Saffola franchise, it recently launched honey, which it claims is one of the purest in the maket. “There will be some more launches in the immunity space and in foods, as also in the in-between meals category in the next couple of months. We have an ambitious plan for foods. We finished 2019–20 at Rs 200 crore in foods and we want to take it up to at least Rs 300 crore-plus by 2020-21. And, the attempt is to hit the Rs 500-crore mark in the next two years,” says Gupta. Marico’s total revenues in FY 19-20 were Rs 6,161 crore.

 

Of the three planks that Gupta outlines, Marico does not yet have critical mass in health and hygiene and has now made its foray into the immunity space with honey. “Fortunately, 80 to 90 per cent of our portfolio consists of items of daily consumption where we can grab market share. And there is also a huge opportunity to quickly get scale in others so that they become a significant part of our portfolio,” says Gupta of the immunity-giving foods the company plans to launch.

Launches aplenty

The past few months have seen a flurry of launches from Marico, in response to the pandemic effects. Mediker hand sanitiser and Veggie Clean are a couple of the new products in the market. Veggie Clean, claimed to be an industry-first, is a soap/chlorine/alcohol-free product that can be used to clean all kinds of vegetables and fruits and can remove any viruses on the produce.

Marico also launched KeepSafe, a range of premium out-of-home hygiene products that includes toilet seat disinfectant, multi-purpose disinfectant spray, hand sanitiser, hygiene hand wipes, feminine hygiene wipes and soon to be launched intimate wash as well. Along with this, it also launched Marico’s Travel Protect and House Protect, effective against viruses, bacteria and fungi on multiple surfaces, without the need to wipe them down after spraying.

Gupta is emphatic that new products need to have a differentiated proposition, For example, Marico hasn’t entered the hand-wash segment in the domestic market. “There are so many existing brands there’s no point making a tactical entry. We need to have a more sustainable position, so we are looking for differentiated spaces. It’s easy to get short-term volumes, but I would rather spend my energies in getting into something where I have a long-term right to it,” explains Gupta. With at least 250 brands of sanitisers in the market now, he says its current entry is merely a tactical move.

Consumers, he says, are looking for trusted brands, and top brands are likely to win, “Consumers’ disposable incomes are down, so leader brands should ensure there is downtrading within the brand itself rather than outside. If you are providing the right value at lower price points, such as value packs at entry level, there will be downtrading within the brand,” he explains.

Distribution channels

Apart from new products, Gupta has also been deliberating with his team on distribution channels. Clearly, during the pandemic, it was proved that availability of a product on shelves equalled market share. “When the lockdown started we looked at several models to ensure reach to the distributor and end consumer.”

It looked at third-party logistics to deliver to consumers as some distributors didn’t have the manpower to load and unload products. Or, take orders without physically visiting stores; it started telecalling them. For the last mile to consumer, it also experimented by using food delivery aggregators such as Swiggy, Zomato as well as Dunzo. “Some are scalable, some not, we are dropping some of the prototypes and will be ready to scale up some of the other initiatives and we believe that what we will have is a differentiated new age supply chain and go-to-market strategy. Something that would have taken three to four years but because of Covid will be accelerated to a one-year time frame,” elaborates Gupta.

Also, he says, the distributor role could change. It was the distributor who was doing everything, from demand generation and market credit to stock delivering. But in metros the role of distributors could change to demand generation only and maybe market credit, but fulfilment could be done by someone else. In the future, a distributor in Mumbai and Delhi could be holding one day of stock cover, says Gupta. “For companies that have direct distribution it will be a source of competitive advantage as share of wholesale channel goes down,” he adds.

Consumer product companies need to up the ante in digital transformation, says Gupta. Marico has been investing ahead of the curve in digital; pre-Covid, e-comm was 5 per cent of sales. Marico recently launched a direct to consumer portal, (stores.saffola.in) which makes it easier to place orders directly for products such as Saffola edible oil, oats and masala oats and the Saffola Fittify gourmet range as well as its Mediker range. “We are on a journey of digital transformation; Covid has forced this pace; what could have happened in three years is now compressed to one year. Marketing, e.comm, analytics, automation... everything has got to change. We expect e-commerce to contribute 8 per cent of sales this fiscal,” says Gupta. For the likes of Gupta, who graduated from B-school in the early 1990s, digital and social media have been a steep and quick learning.

Follow us on Telegram, Facebook, Twitter, Instagram, YouTube and Linkedin. You can also download our Android App or IOS App.

Published on September 13, 2020
This article is closed for comments.
Please Email the Editor