Marico to focus on four key oil brands [FMCG]

Publication info: The Economic Times ; New Delhi [New Delhi]05 Apr 2011.

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ABSTRACT
"Earlier, 60-70% of our revenues used to come from Parachute, now it is about 40%," Mariwala said. [...] the Saffola
brand has been extended to rice and snacks.

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NEW DELHI: Packaged consumer goods maker Marico, which sold its Sweekar brand to Cargill India, will focus on
four key brands, according to its chairman and MD, Harsh Mariwala. The four brands are: Saffola edible oil,
Parachute hair oil, Nihar and Hair &Care.
The nearly 2,661-crore firm has been divesting brands it doesn't consider core to its business, such as Sweekar
sunflower refined oil. Marico sold Sil jams to Scandic Foods in 2008.
It is stepping up focus on its core ones for sustained profitability.
Mariwala said the firm is exploring multiple options in the value-added foods space with Saffola.
"The Saffola brand has a strong heart association and we are looking at ways to leverage that association to other
value-added foods. We are trying to identify spaces which can fit into the consumer's diet between breakfast and
dinner."
The strategy is also aimed at de-risking its overdependence on one brand -Parachute hair oil. "Earlier, 60-70% of our
revenues used to come from Parachute, now it is about 40%," Mariwala said.
Besides, the Saffola brand has been extended to rice and snacks. Its most recent foray is oats, introduced last
year, where it competes with leader Kellogg and PepsiCo's Quaker Oats. Mariwala said the category is set to grow.
"Breakfast is emerging as a large category because of modern supermarket chains."
He refused comment on speculation that Mumbai-based Marico was one of those keen on buying out Bangalore-
based Unibic Biscuits earlier this year, saying the firm is focused on leveraging the health connotation of Saffola
through other differentiated foods, which could include synergistic acqusitions. "But we will not extend the brand
for the sake of it. We will get into categories where we can offer the consumer clearly differentiated products," he
said.
Analysts, however, say few of Marico's recent extensions have met with big success. Its foray into snack foods
with the Saffola Zest brand was withdrawn; and its forays into value-added rice and oats are still nascent and yet
to gain scale.
"While Marico has demonstrated the ability to build a strong domestic portfolio, has good pricing power and a
presence in niche segments, key risks are higher than expected-input cost inflation, exposure to currency risk and
lack of meaningful success in new ventures," Manoj Menon, senior FMCG analyst at brokerage firm Kotak
Securities, wrote in a recent report.
Further, given Saffola's deep-rooted association with edible oils, Mariwala admits it has been and will continue to
be a challenge to make the transition from edible oils to value-added foods. "The challenge will be mainly on the
marketing front. But we have to make that transition," he said.

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 Subject: Oils &fats

Publication title: The Economic Times; New Delhi

Publication year: 2011

Publication date: Apr 5, 2011

Publisher: Bennett, Coleman &Company Limited

Place of publication: New Delhi

Country of publication: India, New Delhi

Publication subject: Business And Economics, General Interest Periodicals--India

ISSN: 09718680

Source type: Newspapers

Language of publication: English

Document type: NEWSPAPER

ProQuest document ID: 860001533

Document URL: https://search.proquest.com/docview/860001533?accountid=27541

Copyright: Copyright Bennett, Coleman &Company Limited Apr 5, 2011

Last updated: 2011-10-04

Database: ABI/INFORM Collection

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