Saffola owner Marico MD says food biz may become bigger than edible oil in 3-4 years

Marico Ltd, which is expanding into the healthy food segment with Saffola brand, expects its food business to surpass the edible oil vertical, said the company's Managing Director and Chief Executive Officer Saugata Gupta.

Marico, whose foods business has crossed the Rs 900 crore-mark in FY25, is expanding in the segment by introducing Saffola oats, honey, and snacks, among other products, in the fast-growing wellness space.

The home-grown FMCG major, which also operates with brands like 'True Elements' and the plant-based nutrition portfolio of Plix, sees a significant opportunity for expansion of TAM (Total Addressable Market), he said.

"As far as Saffola is concerned, we continue to grow the foods franchise. And the food franchise is more profitable than the edible oil. The food business does involve a significant TAM expansion," Gupta told PTI.

For Saffola oats and masala oats, there is a room to improve penetration, distribution, and it needs to be ramped up further with increased awareness and trials, he said.

Marico also aspires to have a 'significant presence' in the honey and muesli segments where it operates with the Saffola brand. Besides, it also plans to grow in the snack segment by expanding its Saffola Crunchiez.

"So overall, we are in a strong position to deliver 25 per cent growth in the food segment. Saffola, as a brand, focuses on offering "better-for-you" products, emphasising healthy choices at every stage of life. This journey will continue, and maybe 3 to 4 years from now, Saffola foods could become bigger than Saffola edible oil," said Gupta.

In FY25, Marico's consolidated revenue, which included international business, crossed the Rs 10,000 crore-mark. Its standalone revenue, which mainly consists of India revenue, was at Rs 7,581 crore.

Marico's food business contributed 11 per cent to Marico's domestic business in FY25, registering a 33 per cent growth, while Saffola edible oils business contributed 19 per cent to domestic business, recording low single-digit volume growth in the same period.

When asked whether Marico plans to introduce more brands in its growing food business, Gupta said: "No! with Saffola, True Element and Plix, we have enough on our plate, and I do not see us launching any new brand in foods."

In its latest annual report, Marico's Chairman Harsh Mariwala had talked about the company's move on "scaling towards Rs 20,000 crore in revenue by 2030", which will be guided by a roadmap rooted in innovation, purposeful brand building and operational excellence.

When asked how Marico would achieve this target, Gupta said: "What we have said is that we will double in five years, which is around 13 per cent plus, a compounded annual growth rate, which means that our core has to deliver high single digits. The diversified business has to continue to grow at 20 per cent plus, and the international business grows in double digits.

"I believe we should be able to do that," he added.

Marico, which also owns popular brands such as Parachute, and Livon, is investing at a 'steady pace' in its manufacturing capacity to meet the growing demand.

Though Gupta did not share any figure, which Marico has earmarked or intends to spend, he said the company is taking a 'judicious' call on investments ranging from automation to integrate new-age capabilities such as artificial intelligence.

"What is more important is to focus on capability building, distribution and digital capability... We are also investing a lot in automation, and we are investing and exploring how to use AI and much more analytics in decision-making. We are not so capex-intensive. We will make judicious investments as and when necessary, in the capex," he said.

Marico is also investing in A&P (advertising and promotion) with significant efficiency. According to Gupta, over the last couple of years, Marico has been among the few companies which have not reduced their A&P spend, despite cost and margin pressures.

"We are seeing a lot of diversion towards spending on ATL (above the line) as opposed to non-media spend, and the other focus area is digital spend. We believe that investing in A&P, especially in ATL, which is for brand equity, is extremely critical, especially since we have a strong diversification journey. Our A&P spend will continue to be in the same zone as we move ahead," he said.