STRATEGY
UNLOCKING the next leg of growth
The last year presented unforeseen challenges in the form of new COVID-19 variants, geopolitical tensions, commodity inflation and volatility, and demand slowdown. While we have worked towards anticipating and tackling the external headwinds, we have also kept a sharp focus on laying a strong foundation to build future readiness.
Marico has continued to step up its performance year-on-year and delivered profitable volume growth ahead of the market. We have also significantly strengthened our competitive position in the domestic market with 97% of our portfolio consolidating or gaining market share and 94% of our portfolio gaining penetration. We have also been able to inch up our gross margins quarter-on-quarter with calibrated price hikes and cost rationalisation, aided by a deflationary copra cycle.
Sustainable and profitable growth in the core portfolio continues to be the key driver of our performance. Despite the cost pressures, we have continued to invest in strengthening our brands and expanding our distribution reach to drive penetration in the core portfolios. Expansion of the total addressable market of our power brands through consumer-centric innovation remains a central pivot of our strategy.
The International Business had a stellar year with a strong momentum of sustained and profitable growth.
Each of the markets – Bangladesh, Vietnam, MENA, & South Africa - posted double-digit constant currency growth and contributed handsomely.
We have also taken significant strides in our ESG initiatives and have surpassed our 2022 ESG goals – leading to a positive movement in independent ESG ratings and multiple recognitions throughout the year. In line with our motto ‘Making a difference’, we have introduced multiple sustainability initiatives across our global operations and committed to achieve net-zero emissions in our global operations by 2040.
We will focus on continuing the good work on driving sustainable and profitable growth in the core, managing costs aggressively and staying true to our purpose in our ESG commitments. However, to unlock the next leg of growth, we need to drive the four Ds to deliver long-term profitable growth – Diversification, Distribution, Digital, & Diversity.
Driving 4Ds to make Marico future-ready
Unlock the next leg of growth through…
Diversification
In the domestic business, there are three pillars of diversification – Foods, Premium Hair Nourishment and Digital Brands. In Foods, we have met our aspirational topline target of reaching ` 450-500 Crore for this year, and expanded the total addressable market of the brand ‘Saffola’ to ` 6,000 Crore through a portfolio of healthy and superior offerings. We aim to scale our Foods business to ` 850 to 1,000 Crore by FY24 on the back of innovation, distribution and market development. In Premium Hair Nourishment, we will maintain our focus on premiumising the mix through innovative solutions with superior sensorials and formats. The current portfolio of Digital first brands clocked ` 180 to 200 Crore in annual run rate on exit basis in FY22 and we will aim to reach ` 450 to 500 Crore by FY24.
The International business has made great progress on both the vectors of diversification – geographical diversification and portfolio diversification. Each of the markets is on a strong growth momentum and contributed materially towards delivering a high double-digit constant currency growth in FY22. In Bangladesh, we will continue the diversification journey through accelerated growth in hair care and baby care portfolios, among others. In Vietnam and MENA, we have set the fundamentals right and will now suitably replicate attributes from the operating model that has worked in Bangladesh, in order to build a sustained growth momentum in both businesses.
Distribution
We will continue efforts towards expanding our reach through go-to-market transformation. We have institutionalised a Sales 3.0 framework, to strengthen micro market focus and execution, bring enhanced agility with on-ground decision-making leveraging technology and analytics. The new framework represents a shift in our sales operating structure from four divisions to multiple clusters, defined based on similar consumer behaviour, brand preference and geographical contiguity. We are also scaling up a dedicated GTM to drive our aspirational target in Foods. There is headroom for driving distribution led growth on similar lines across all our key international markets of Bangladesh, Vietnam, Middle East and Egypt, and we continue to work towards enhancing our consumer reach.
Digital
We are investing towards raising the digital quotient across the value chain to make the organisation future ready. This is also reflecting in our talent strategy and how we are imbibing new ways of working, which we believe will enable us to transform into a digitally savvy organisation and win amongst evolving consumer and marketplaces. Ahead-of curve investments in e-commerce capabilities has kept us much ahead of the industry in sales contribution from the channel. Nearly a fourth of our advertisement spends are now on the digital platforms. We have also made significant progress in our journey to build strong digital-led analytical capabilities to enable real-time data-led decision making. We will continue to strengthen this further for prioritised use cases such as spend effectiveness, demand sensing and social listening driven innovations, among others.
Diversity
We believe that a positive, enabling and inclusive culture will give us a strong and competitive edge over the long term. We are amplifying equal opportunity for all at the workplace and are working towards creating a workforce with enhanced ‘Gender’, ‘Differently Abled’ and ‘Thought’ diversity. We are making efforts towards fostering a culture of inclusion through focused interventions such as:
- ensuring accessibility of infrastructure, policies, and processes for diverse groups;
- driving sensitisation and awareness on the right actions, behaviours and practices for an inclusive workplace; and
- monitoring transparency of talent processes to create a sense of ‘quality’, ‘openness’ and ‘belongingness’ within the organisation.
…and continue to maintain focus on
the Core
Management
Commitments