Marico’s healthier food brand, Saffola, is now worth Rs. 2,000 crores plus. Marico, which is expanding in the food segment, has seen “significant success” and is on track to meet the aspiration of having Rs. 850 crores or more in revenue in FY24 from the present level.
In fact, Marico plans to add more products into the food segment under its master brand Saffola, and in the last two years, Marico has introduced several new products under Saffola, ranging from honey to peanut butter and soya chunks to instant noodles, making it a healthy lifestyle brand that advocates premium food instead of just being an edible oil brand.
According to its MD & CEO, Saugata Gupta, the worst of inflation is over, and there is a gradual recovery for the FMCG (fast-moving consumer goods) segment, with the rural market making a comeback. The rural FMCG market, which has witnessed a decline in the last 4-5 quarters, is expected to have a turnaround in the next 2-3 quarters.
Overall, we see a gradual recovery in FMCG, but that has to be led by rural. “Urban has been decent.” At the industry level, the food category continues to do well, while the HPC (home and personal care) category is struggling a bit. This is because, last year, there was significant inflation, he said. As inflation eases, he now expects “better margins” in the top line and says the urban market and modern trade channels are recovering and going back to pre-Covid levels while the general trade is doing well with food.
“The Saffola master brand, if we put it together, is a Rs. 2,000-crore-plus brand,” said Gupta. Between food, digital, and some of its premium portfolios like skincare, male grooming, etc., which are non-core parts of the portfolio, Marico’s overall turnover will reach the mid-teens in the next two years, he said.
Food has been one of the noteworthy expansion journeys we have taken in Marico. “Our effort was to expand the total addressable market with the brand Saffola, participating in the healthy food segment,” Gupta added. In the December quarter, Marico’s food business grew 31 percent in value terms. Marico owns brands such as Parachute, Saffola, Hair & Care, Nihar, Nihar Naturals, Livon, etc.
Gupta added, “You will see growth, and improvement as we move forward in the next couple of quarters in the India business, and as far as international business is concerned, there are some inflation and currency headwinds. We continue to be resilient, and we are confident of double-digit constant currency growth.”