Saffola a Rs 2,000 crore-plus brand; worst of inflation is over: Marico CEO

Saffola, the master brand under which Marico offers healthier food options, is now worth Rs 2,000 crore-plus, said Marico MD & CEO Saugata Gupta.

About inflation, Gupta told PTI the “worst” is behind and he sees a gradual recovery for the FMCG (Fast Moving Consumer Goods) segment with 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, he said.

“I think the worst is behind,” said Gupta, adding, “Overall for FMCG, we see a gradual recovery, but that has to be led by rural. Urban has been decent.”

At the industry level, food continues to do well and HPC (home and personal care) category is struggling a bit. This is because, last year, there was significant inflation, he said.

As inflation eases, now he expects “better margins” in top-line and said the urban market and modern trade channels are recovering and going back to pre-Covid levels while the general trade is doing well in food.

Marico, which is expanding the addressable market in the food segment, said it has been a “significant success” and is on track to meet the aspiration of having Rs 850-crore-plus revenue in FY24 from the present level.

Marico plans to add more products into the food segment under its master brand Saffola, expanding its addressable market.

In the last two years, Marico has introduced several new products under Saffola, ranging from honey to peanut butter, soya chunks to instant noodles, making it as a healthy lifestyle advocating premium food brand from being just an edible oil brand.

“Saffola master brand, if we put together, it 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, in the next two years will constitute to mid-teens to Marico’s overall turnover, he said.

“Food has been one of the significant diversification journeys we have taken in Marico. Our effort was to expand the total addressable market, with the brand Saffola, participating in the healthier food segment,” Gupta added.

In the latest December quarter Marico’s food business grew 31 per cent in value terms. However, hair oils posted a value decline of 3 per cent.

Its sales from channels such as general trade declined in mid-single digits and rural is still behind urban. While sales from modern trade channels and e-commerce grew in high double digits.

Marico, which owns brands such as Parachute, Saffola, Hair & Care, Nihar, Nihar Naturals, Livon etc., get around one-third of its domestic sales from the rural markets.

“Our rural contribution is lower because of our food and Saffola business. Out rural contribution is in the mid-30s,” he said,

About the outlook, Gupta said: “You will see a growth 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.

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