For Marico, kirana shops are a source of competitive edge

We have to use organized trade as a channel prototype and then scale up new launches Saugata Gupta, managing director and CEO, Marico Ltd

- Suneera Tandon

Marico Ltd is focused on accelerating growth, after emerging from last year's intense competition made worse by high commodity prices. To tide over these challenges, the fast-moving consumer goods company (FMCG) bolstered its presence among mom-and-pop stores and streamlined its product line-up to concentrate on fewer, faster-selling items, Saugata Gupta, managing director and chief executive officer, said in an interview with Mint. Last week, the maker of Parachute coconut oil reported a consolidated revenue from operations of 3,259 crore in the June quarter, a 23% year-on-year increase. This was driven by a 9% volume growth in its India business. This growth came despite record high prices of copra, a key raw material for the company. He also emphasized that general trade, or the traditional, independently-owned small kirana shops are a source of competitive edge for Marico and other large legacy FMCG players, and that digital brands won't ever be able to crack this segment.

Edited excerpts.

Have things improved for consumers or do you attribute some of the volume growth improvement to better business decisions?

Improvement in inflation is gradual, so it's very difficult to put a number to this. Having said that, management has to execute well to grow irrespective of the conditions. One of the things we are looking at is if the average market volume growth is "x", how are we beating that. For this we have to innovate and diversify. A lot of large FMCG companies are highly penetrated and, therefore, if you have double-digit revenue growth ambitions, you have to innovate and diversify.