Marico’s healthy foods portfolio, under Saffola, is going to be a Rs. 450–500 crore brand by FY23.
Pawan Agrawal, CFO of Marico, said that the company plans to grow its healthy food segment to Rs 850–1,000 crores by FY 2024.
Marico’s food segment in FY20 had less than Rs 200 crore in revenues. We had set an aspirational target of reaching up to Rs 500 crore in FY 23 and then, from there, Rs. 850 to 1,000 crores in FY 24. We are happy to share that we are very much on track. If not 500, we will reach a ballpark in that range this year, “said Agrawal.
“We believe that there is potential for Saffola to expand its total addressable market and therefore evaluated multiple categories where Saffola can extend itself. We recently entered into categories like honey, chyawanprash, soya nuggets, and oat noodles, and have witnessed encouraging success in some of these already, “he added.
Marico, in its December quarter results, announced that Saffola foods witnessed a growth of 28 percent. Its popular product, Saffola Oats, gained 560 bps and currently holds 42 per cent of the market share, as per the quarterly results.
Also, Saffola edible oils delivered a very good performance in FY 21 and the start of FY 22. There have been significant fluctuations in edible oil prices in the last few quarters, which have affected growth in the last couple of quarters. Despite near-term volatility, this segment can grow in the high single-digits at least, if not double-digits, over the medium term. In fact, Marico’s medium-term goal is to maintain an operating margin of 19 percent or higher.
The company will focus on prioritising volume growth and market share gains, even with some compromise on margins from a short-term standpoint, adding that the brand is confident that in the long term, margins will come.
Talking about Marico’s increasing focus on D2C and its acquisition strategy, Aggarwal said, “The brand is active and we believe that there are some more opportunities in the market that we keep evaluating. Hopefully, we should be able to make one or two more acquisitions. “