More excitement
FMCG will grow strongly and no longer be a defensive sector.
Marico in its current avatar was born 20 years ago, but my mind harks back even further, to 1971, when I joined the Mariwala family business, Bombay Oil Industries Ltd. It had three main lines - fatty acids, spice extracts and consumer products. I was asked to handle the consumer products division, which had the yet-to-be-packaged flagships Parachute and Saffola. The franchise was pre-dominantly bulk sales, of about Rs 50 lakh, in parts of Maharashtra and Saurashtra.
A fresh graduate, I needed to understand the nuances of the business so I travelled extensively to the interiors to study our distribution and retail operations. I realised that our customers were other companies and intermediaries, who resold to retail outlets. Retailers would sell these oils 'loose' to consumers, as was the practice at that time. I spotted the opportunity for branding and introduced consumer packs, for both coconut (Parachute) and refined edible oils (Saffola).
Having appointed 200-300 distributors, I implemented an aggressive brand building and retail marketing strategy. We pioneered the consumer packs for oils (Parachute Blue is now almost the industry colour), converted almost the whole of the tin can market into plastic containers and established Saffola as a heartcare edible oil brand. Bombay Oil soon became a profitable branded business. The next goal was to build a fast-moving consumer goods (FMCG) business.
The Marico group today employs nearly 3,000 "members", but, back in 1971, my team consisted of only 10. In 1990, we carved the consumer products division out of Bombay Oil as Marico Industries Ltd. I moved out to lead this new company with a family mandate to address the skill gaps and build a professional organisation.
Marico's challenge then was to build a team of self-driven and competent professionals who would not blindly follow the rules of a family-run business, but move the business into the next growth orbit. I figured out that we could attract such talent only if we could build a differentiated culture that would be entrepreneurial and ensure that individuals developed along with the organisation.
I had started with a strong personal conviction around certain values, and it was exhilarating to translate them into a unique organisational culture. I wanted to build an organisation in which I was not the only driver of change, or the only owner of achievements. We chose to describe our employees as 'members'. This triggered emotional ownership far beyond the usual employment contract.
At the same time, I felt that the potential of individuals grows exponentially when they are exposed to multi-functional roles. So, we had cross-functional training, job rotation at various levels and international exposure across businesses.
As for the products, we pioneered consumer-friendly packaging for edible oils despite the hurdles. Dealers were apprehensive about stocking our products, as they felt rats would damage the containers. So Marico introduced anti-rodent packaging with flip-top caps. The flip-top was difficult to counterfeit, and made the container spill-proof.
Later, we saw a national opportunity for Saffola, a safflower-based refined edible oil then restricted to the Mumbai market. We highlighted research that consumption of safflower oil helped reduce harmful cholesterol, and promoted Saffola as a heartcare brand. Twenty years ago, Saffola was the first edible oil brand in the country on the 'heartcare' platform. Today, the brand covers other "healthy living" products such as low sodium salt, active rice and oats.
Marico pioneered another business in the early part of the past decade: the Kaya Skin Clinics, which are a blend of the art and the science of skincare. Today, we have over 100 Kaya Clinics, not just in India, but also in West Asia, Bangladesh and South East Asia.
For the next 20 years, I see Marico continuing to grow. The FMCG industry in India is at an interesting juncture. For years now, it has been considered a defensive sector that will grow steadily even amidst economic downturns. Now, it will see strong and continuous growth as India reaps its demographic dividend. Much will depend on how the industry innovates and nurtures its customers.
Building long-term consumer franchises will be far more important than making short-term quick gains.
Modern trade could be another growth driver, although it currently contributes only 6-15 per cent of sales for most FMCG firms. Globally, too, it looks as if the FMCG space will continue to be exciting, especially in emerging markets. Today, Marico's international business fetches a quarter of the group's revenues. I expect this to grow significantly.
At Marico, we realised that we cannot be defined solely by what we do or how successful we are. We need to identify why we do what we do, and what is the very reason for our existence. Our introspection in these areas has helped us define our purpose: 'Be More. Every Day.' Today, Marico is more than a successful business - it is an agent of social change. I would like to see more action in this area by Marico and by the whole industry. I would like to see conscious capitalism gaining ground.
From a relatively small regional oils business, Marico has grown into a leading Indian multinational corporation in the beauty and wellness space. In 1990, we were unlisted. By 2010, we have a market value of over Rs 70 billion. I am sure we will keep creating greater value and live up to our purpose..."Be More. Every Day."
A fresh graduate, I needed to understand the nuances of the business so I travelled extensively to the interiors to study our distribution and retail operations. I realised that our customers were other companies and intermediaries, who resold to retail outlets. Retailers would sell these oils 'loose' to consumers, as was the practice at that time. I spotted the opportunity for branding and introduced consumer packs, for both coconut (Parachute) and refined edible oils (Saffola).
Having appointed 200-300 distributors, I implemented an aggressive brand building and retail marketing strategy. We pioneered the consumer packs for oils (Parachute Blue is now almost the industry colour), converted almost the whole of the tin can market into plastic containers and established Saffola as a heartcare edible oil brand. Bombay Oil soon became a profitable branded business. The next goal was to build a fast-moving consumer goods (FMCG) business.
The Marico group today employs nearly 3,000 "members", but, back in 1971, my team consisted of only 10. In 1990, we carved the consumer products division out of Bombay Oil as Marico Industries Ltd. I moved out to lead this new company with a family mandate to address the skill gaps and build a professional organisation.
Marico's challenge then was to build a team of self-driven and competent professionals who would not blindly follow the rules of a family-run business, but move the business into the next growth orbit. I figured out that we could attract such talent only if we could build a differentiated culture that would be entrepreneurial and ensure that individuals developed along with the organisation.
I had started with a strong personal conviction around certain values, and it was exhilarating to translate them into a unique organisational culture. I wanted to build an organisation in which I was not the only driver of change, or the only owner of achievements. We chose to describe our employees as 'members'. This triggered emotional ownership far beyond the usual employment contract.
At the same time, I felt that the potential of individuals grows exponentially when they are exposed to multi-functional roles. So, we had cross-functional training, job rotation at various levels and international exposure across businesses.
As for the products, we pioneered consumer-friendly packaging for edible oils despite the hurdles. Dealers were apprehensive about stocking our products, as they felt rats would damage the containers. So Marico introduced anti-rodent packaging with flip-top caps. The flip-top was difficult to counterfeit, and made the container spill-proof.
Later, we saw a national opportunity for Saffola, a safflower-based refined edible oil then restricted to the Mumbai market. We highlighted research that consumption of safflower oil helped reduce harmful cholesterol, and promoted Saffola as a heartcare brand. Twenty years ago, Saffola was the first edible oil brand in the country on the 'heartcare' platform. Today, the brand covers other "healthy living" products such as low sodium salt, active rice and oats.
Marico pioneered another business in the early part of the past decade: the Kaya Skin Clinics, which are a blend of the art and the science of skincare. Today, we have over 100 Kaya Clinics, not just in India, but also in West Asia, Bangladesh and South East Asia.
For the next 20 years, I see Marico continuing to grow. The FMCG industry in India is at an interesting juncture. For years now, it has been considered a defensive sector that will grow steadily even amidst economic downturns. Now, it will see strong and continuous growth as India reaps its demographic dividend. Much will depend on how the industry innovates and nurtures its customers.
Building long-term consumer franchises will be far more important than making short-term quick gains.
Modern trade could be another growth driver, although it currently contributes only 6-15 per cent of sales for most FMCG firms. Globally, too, it looks as if the FMCG space will continue to be exciting, especially in emerging markets. Today, Marico's international business fetches a quarter of the group's revenues. I expect this to grow significantly.
At Marico, we realised that we cannot be defined solely by what we do or how successful we are. We need to identify why we do what we do, and what is the very reason for our existence. Our introspection in these areas has helped us define our purpose: 'Be More. Every Day.' Today, Marico is more than a successful business - it is an agent of social change. I would like to see more action in this area by Marico and by the whole industry. I would like to see conscious capitalism gaining ground.
From a relatively small regional oils business, Marico has grown into a leading Indian multinational corporation in the beauty and wellness space. In 1990, we were unlisted. By 2010, we have a market value of over Rs 70 billion. I am sure we will keep creating greater value and live up to our purpose..."Be More. Every Day."
