Saffola, the master brand under which Marico offers healthier food options, is now worth Rs 2,000 crore-plus, said Marico MD and CEO Saugata Gupta. About inflation, Gupta said, the "worst" is behind and he sees a gradual recovery for the FMCG (Fast Moving Consumer Goods) segment with the 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. 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 percent in value terms. However, hair oils posted a value decline of 3 percent.
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 and Care, Nihar, Nihar Naturals, Livon, etc., gets 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,
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."