Marico expects new launches to help premium brands to double in 3-4 years

By

Isabelle Crossley

Published
Aug 28, 2018

The fast moving consumer goods business Marico is banking on new acquisitions to lead to growth in the premium space as it forays into the fast growing male grooming market as its core business slows down.

Marico has seen its core brands Saffola and Parachute hair oils slow down amidst strong competition in the haircare market.

To counter this, the brand is making strategic investments in the male grooming brand Beardo and the fitness solutions app Revofit which are both still run as independent start-ups. Premium brands for a niche market currently contribute around four to five percent of Marico’s overall revenue. However, the business foresees them doubling to around ten percent within the next three to four years.  

Saugata Gupta, Marico’s CEO and MD, told Livemint: ““The plan is to grow our niche premium brands portfolio by acquiring four to five online-only brands and also launch three to four of our own online first brands over the next two years.” Gupta stated that if two of the three brands manage to cross Rs 100 crore ($15 million), then the exercise will be considered a success.

Marico recently reported a two-year compounded average growth rate of one percent which was low compared to other businesses in the same market such as Hindustan Unilever, Dabur, and Godrej, which all reported between six to eight percent two-year compounded average growth rates. However, the business is confident that the growth rate will be back up in the next financial year driven by male grooming and acquisitions.