Harsh Mariwala: The Businessman Who Never Stopped Learning
When he was in his early 20s, an age at which clarity of purpose is a rare quality among men and women fresh out of college, Harsh Mariwala had made up his mind about what he wanted to be: a businessman, and there was no way he would report to an outsider.
Having graduated in commerce from Sydenham College in Mumbai, then known as Bombay, Mariwala steadfastly followed his ambition. He started his career in 1971 with Bombay Oil Industries Ltd., a commodities company controlled by his family, before he created Marico Ltd. in 1990.
The timing for the start of Marico was opportune. The consumer goods maker was carved out of Bombay Oil just one year ahead of the launch of economic reforms that set the economy free from a bewildering labyrinth of licences and controls that had shackled business for more than four decades.
Under Mariwala, Marico-maker of Parachute coconut hair oil, Saffola cooking oil, male grooming brand Set Wet and Livon, a range of haircare products for women-has become a name to reckon with in the Fast Moving Consumer Goods (FMCG) industry. It had sales of Rs 9,653 crore and a net profit of Rs 1,502 crore in financial year 2024. It had a market value of Rs 78,537 crore at the stock’s closing price of Rs 606 on March 13.
The company has a presence in “over 25 countries across emerging markets of Asia and Africa” and “touches the lives of one out of every three Indians, through its portfolio of brands,” says the company’s website.
Now 73 years old, Mariwala quietly jots down a few points before reminiscing about his career, years in Bombay Oil and the launch and growth of Marico.
In many ways, the man is an oddity. For one thing, Mariwala does not have an MBA degree, a fact he says makes him more open-minded and willing to learn on the job. He consciously hires people he reckons are smarter than himself and ensures everyone puts the interests of the company first.
Mariwala’s professional journey has taught him a few lessons, perhaps the most important of which is a bottom-up approach—a business model in which plans are developed at lower levels of the organisation and funneled up until they reach the top management tier.
THE BEGINNING
- Mariwala came from the quintessential Indian family business background, where commodities was the primary venture
- As a young man, he saw a clear opportunity in branded consumer products for both coconut oil and refined sunflower oil
- Mariwala broke away to set up Marico Limited and created brands such as Parachute and Saffola
- Marico went public in 1996, and in a few years staved off a potential takeover by HUL
The early days
Mariwala’s professional journey started in Masjid Bunder, a crowded wholesale market area in Mumbai where the family ran its commodity business.
“My father and uncle managed it and I was the first from the next generation. There was nobody to train me and I was asked to travel to meet customers,” Mariwala says.
Starting in 1948, the family had made and sold edible oils, oleo chemicals and spice extracts. It was when he started working in Bombay Oil and meeting customers that he saw a market for oil products if sold in smaller branded forms.
This conversation took place in his corner office on the eighth floor of Grande Palladium in Kalina, a western Mumbai suburb. His office is lined with books, a testament to an ever-curious mind. He is reading a book these days on Tesla Inc. boss Elon Musk, who is very much in the news as a close associate of US President Donald Trump.
Mariwala downplays the importance of money as a motivator for his consumer business, but make no mistake, he is very passionate about Marico.
"The whole journey is not just about the money. The pride of owning an Indian company was far more important to me," he says.
When an aggressive Hindustan Unilever Ltd, the Indian arm of Anglo-Dutch giant Unilever Plc., wanted to acquire Marico in the late 1990s, Mariwala’s steely resolve to keep ownership of the company showed itself.
In time, it was to lead to a delicious irony. More on that intriguing story a little later. He saw potential in selling branded consumer products-specifically coconut oil and refined sunflower oil-and through sheer perseverance, Mariwala built them into valuable businesses.
‘Timeless Brands’
Innovation excites him. In the case of Parachute coconut oil, it came in the most serendipitous manner when the product had its own distribution network and was sitting pretty with a 15% market share.
"We wanted to do something discontinuous and saw an opportunity in plastics when the product was being sold in tins," Mariwala recalls. "The trade was resistant, and it took us five years to drive home the advantages of convenience, looks and a more affordable product.”
The effort paid off and from a 15% market share, Parachute moved remarkably to 50%—that was during the 1980s. What he learnt from that experience was the importance of innovation in a commoditised product that involved no technology to speak of and only narrow product differentiation.
"Here the uniqueness came through packaging," Mariwala says.
If a product category is undifferentiated, it will remain a commodity and cannot address the pain points of customers. Before plastic packaging was introduced, the product tended to freeze during the winters in the tins it was sold in—a pain point that was removed with the switch to plastic.
“Harsh focused on not just marketing and advertising, but on these pain points,” says Saurabh Mukherjea, Chief Investment Officer at Marcellus Investment Managers.
In 1990, Marico came into existence and a few years later, a management separation took place through negotiations with other family members. It set the stage for the company to go public in 1996.
"Life changed," Mariwala says simply.
Anand Kripalu, managing director of EPL (formerly known as Essel Propack Limited) and earlier head of Diageo India and Cadbury India, says Mariwala may have founded his company with iconic brands, but had been quick to hire professional managers who could manage scale when it expanded.
“Then, he genuinely stepped back and empowered. Harsh ensured a board of top professionals and (took) their views and opinions on all key decisions,” says Kripalu, who was on Marico’s board in 2007-17.
"Harsh brought in the right marketing thinkers to ensure the brands stayed consistent and true to their identity. That is a hallmark of timeless brands," Kripalu adds.
Samco Securities research analyst Divyam Mour says MDL operates in a specialised segment. “Submarine and warship projects involve immense technological complexity and have high entry barriers,” he says. This placare high-value and high-margin in nature, says Mour.
Making it Count
When HUL decided the mid to late 1990s that it wanted to be a dominant hair oil producer and seller, having secured a foothold in the market through the acquisition of Tata Oil Mills Company, Mariwala had been prepared for the offer, couched in the manner of a threat, that came his way from the deep-pocketed multinational.
Many people who knew Mariwala advised him to accept the offer and sell.
He recalls doing his own research and meeting Karsanbhai Patel, founder of detergent maker Nirma Industries Private Limited, and management guru Ram Charan for advice. Ram Charan told him he must “stay on and protect the resource-generating engine," says Mariwala.
Marico’s performance took a hit as the bigger rival opened its wallet to gain market share. Eventually, HUL cooled off on the hair oil market, in line with a larger strategy, and put the business on the block.
In early 2006, Marico acquired the coconut hair oil brand Nihar for Rs 216 crore from HUL in a competitive bid. The story had come full circle, ending the David-and-Goliath battle on a touch of irony.
Buyouts in the FMCG space may be par for the course, but how many work out is quite another story. Marico has made about 30 acquisitions – both in India and overseas – including four direct-to-consumer brands (Beardo, True Elements, Plix and Just Herbs).
"The success rate globally is around 30% and for us, it is at least 70%," says Mariwala, without a trace of conceit.
Today, Marico gets over 27% of its business from international markets, which include Bangladesh, Egypt, Malaysia, Myanmar, South Africa and Vietnam.
“Going overseas is a key part of our growth story. We are the largest Indian company in Bangladesh and learnt quickly that having a presence outside is a different ballgame,” Mariwala says.
Mukherjea calls Mariwala a "calculated risk taker," who knows when to pull back.
“For example, he was amongst the first FMCG promoters to enter other Asian countries. He was also amongst the first to pull back on investments in these overseas markets when he realised that the RoCE on domestic investments was much higher.” RoCE is short for Return on Capital Employed, a ratio used as a measure of a company’s profitability and capital efficiency.
Mariwala is big on consumer insights and constantly looks for them, even if a business move fails to pay off.
An example is Saffola’s venture into baked snacks where the focus on health took precedence over taste. "That will not work in foods, especially the impulse (buying) category,” he says. The launch of Saffola oats and the aftermath was not easy for the brand to traverse. “The consumer insight was the desire for a savoury breakfast taste and we went overboard on that with variants for each state. Today, it (oats business) is a Rs 400 crore brand with an 80% market share," Mariwala says.
Legacy
Once he stepped down as Managing Director in 2014 in favour of Saugata Gupta, who had joined the company 10 years earlier, he adopted what he calls a "hands-off but mind-on" approach towards the company.
According to Kripalu, Mariwala has the ability to be dispassionate towards business, citing the case of leadership transition. “He would keenly listen to board members before any decision was made apart from making the effort to connect with them outside of board meetings for their advice. Harsh also had the vision and sense of purpose to make Marico one of the best board-managed companies by bringing in the famed Ram Charan to be a board mentor,” Kripalu adds.
The legacy that Marico must leave behind is critical to Mariwala. Marico Innovation Foundation, a philanthropic institution, was started 22 years ago when there was no concept of mandatory Corporate Social Responsibility (CSR) spending. It started in Kerala to help improve the productivity of coconut growers. “Marico as an organisation stands for all stakeholders and that includes employees, promoters and society,” Mariwala says.
Equally important is Ascent, an initiative to identify high-potential, growth-stage entrepreneurs in which they can learn from one another. "Today, there are 1,100 of them with a turnover of Rs 1.2 lakh crore providing employment to 3.2 lakh people," the Marico founder says.
Then, there is Marico Health Initiative, which works with 50 organisations in the field of mental health.
Mariwala speaks of his strong belief in the concept of perpetuity, or permanence. "FMCG is a relatively defensive sector and disruptions are manageable if you create strong brands. The risk of something like technology is much lower and I believe organisations must have (sense of) perpetuity."
Mariwala’s passion for consumer brands remains unabated if only because of familiarity with the business. "My weakness is that I cannot deal with bureaucrats and feel more comfortable with retailers and distributors. I would have never succeeded in a B2B business,” he says.
@krishnagopalan
