Saugata Gupta, managing director & chief executive officer, Marico is clear where he wants to see the Mumbai-based firm go. It will become a big player within the fast-moving consumer goods (FMCG) space in the next five years. At the same time, it will also become a successful digital consumer company, he tells Viveat Susan Pinto in an interaction. Gupta, 56, also sheds light on the building blocks he is putting in place to achieve this goal. Excerpts:

What are you doing to become both a large FMCG player as well as a digital consumer company?

There are three parts to our diversification agenda. One is premium personal care, the second is digital-first brands and the third leg is foods. In each of these areas, we see significant headroom for growth. This will, in turn, help us accelerate revenue growth, which will take us to our objective of being a large FMCG player in the next five years. In terms of our digital capabilities, we are re-engineering ourselves to not just be topline-scaling, but also be profitable. As I see it, five years from now, we will have a portfolio across premium personal care and foods. Marico will also have a string of successful digital-first brands. I see Marico as an emerging-market MNC with a presence in Asia, Africa and the Middle East.

Which of your digital-first brands can become big in the future?

Beardo and Plix, our digital-first brands in male-grooming and plant-based nutrition respectively, have the potential to become Rs 500-crore brands each in the next 4-5 years. They currently have a Rs 200-crore annual revenue run rate respectively. They are on a high-growth path and can become big for us, given the potential and the total addressable markets of the respective categories. We also see Kaya becoming potentially big for us in the future. The collaboration (with Kaya) will enable us to advance our play in science-backed personal care. We have the exclusive rights to scale up Kaya’s range of efficacy-based personal care products outside of its clinics. We see this as a Rs 100-crore revenue opportunity over the next four years. And it will add another growth lever to our digital-first business.

How fast do you see your foods business touching Rs 1,000 crore in topline? You closed FY24 with a topline of over Rs 700 crore in foods. 

We have grown our foods business by four times its FY20 scale. That is some ground that we have covered over the last few years. Our aspiration is to double the foods business over the next few years. And we want to do it profitably. In FY24, for instance, we made refinements to our food supply chain, good-to-market strategies and cost structures. Through these initiatives, we realised 800 basis points of gross margin expansion in foods alone in FY24. That is significant and we hope to continue on that path, even as we increase topline in the foods business.

Your assessment of the FMCG market and its growth prospects this financial year?

Since the Covid-19 pandemic began in 2020, which was followed by significant inflation due to the Russia-Ukraine war in 2022, there has been a slowdown in the FMCG market. But that is changing now. Over the last one quarter, rural areas are showing some signs of recovery. It is not out of the woods yet, but there are green shoots that are visible. The recent Union Budget too has put focus on driving rural consumption, which augurs well for the market. With inflation broadly under control, we expect rural growth to inch up. Largely, we hope to see the FMCG market moving up from mid-single digit revenue growth to high single-digit revenue growth over the next 12-18 months, led by volume growth.

Do you see price hikes coming back into the market, especially in foods, where input prices have been volatile?

Pricing action will depend from category to category. Some segments that have seen huge commodity inflation may have to pass it on to consumers. An example of this is cocoa prices, which are at a multi-year high. So, users of the commodity such as chocolate makers have no alternative but to pass on some of the inflation to consumers. Having said that, general inflation is broadly under control. So, pricing action may not be that significant for most other players.