Marico is increasing focus on the food portfolio and is diversifying its products at a rapid pace to include more healthier options, which will help the company achieve a revenue of `650 crore from the segment by March 2023. This would also keep it on track to achieve Rs 850 crore-Rs 1,000 crore by FY24.
The company recently launched Saffola Soya Bhurji and added a new Saffola Masala Oats variant with millets, which Sanjay Mishra, chief operating officer (India business) and CEO (new business), Marico, told FE, have been significant steps to diversify its food portfolio and reach a revenue of Rs 650 crore in the portfolio by March 2023.
“We see tremendous potential in our food portfolio and plan to build it at an accelerated pace by picking categories with significant growth tailwinds and solving unmet consumer needs through differentiated offerings, through our power brand, Saffola, and expanding its total addressable market in the bargain. We aspire to achieve the Rs 850 crore-Rs 1,000 crore mark in FY24 and are well on our way to doing so,” he said.
Earlier in the year, Marico forayed into healthy spreads with Saffola Peanut Butter. During the second quarter ended September, it also launched two variants of Saffola Honey — Saffola Honey Active and Saffola Honey Gold.
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Mishra said the company is seeing increasing demand for quick food that is also high in nutritional value, a trend that started during the two years of the pandemic but has now been integrated into customer preferences. “India has witnessed a massive shift in consumer preferences for healthier lifestyles which has increased the demand for nutrient-dense food items. The industry is being driven by the working population’s increased inclination for convenience food items and expanding retail chain market in India,” he said.
With affordable price points and availability in smaller packs, the company is also disrupting the niche plant-based protein segment, which falls in the premium category. The company’s Saffola Soya Bhurji, for instance, is available in a 35 g pouch priced at Rs 15. “We plan to revolutionise plant-based protein category for the consumers at the base of the pyramid, making it affordable at a mass level. We hope that it will encourage a maximum number of people to integrate a consistent source of protein into their lifestyle,” Mishra said.
He said the product is in its pilot phase, which is why the price points have been kept low. He added that the current price point is sustainable as the company is making “healthy gross margin”, without sharing the details.
However, Marico plans to scale up the business by next financial year and may gradually launch even bigger packs of the product with different price points.
“We aim to strengthen our foothold in both healthy foods and ready-to-cook segment in India on the back of innovations and differentiated product offerings that cater to the needs of consumers,” Mishra said.
According to analysts, the introduction of Saffola Soya Bhurji is part of the strategy where the company is launching value-added soya products, given it does not just want to play in the plain and commoditised Soya Nuggets category. “The opportunity in Soya is to convert it into a snacking option from main meal. Sale from Soya products is expected to touch Rs 100 crore in FY23,” analysts at ICICI Direct said.
In the quarter ended September, Marico reported a muted revenue growth of 3.2% to Rs 2,496 crore on the back of 1% growth in domestic business and 11% constant currency growth in international business. Domestic volume growth was 3%, and on a three-year CAGR basis, volume growth was 7% for the company.
However, foods, digital first and international business are expected to drive growth for the company. During the quarter, foods business continued to witness strong growth of 26% driven by strong growth in Saffola Oats reflected by 320 basis points market share gain, said analysts.