Emami bets on new engine of growth, confident about improvement in consumption

Emami is working towards building ''new engines of growth'' that will define its future as it takes a strategic bet on segments such as health foods, nutrition, pet care, and aloe vera-based fruit juices, according to the latest annual report of the home-grown FMCG major.

The company expects its portfolio to be ''much sharper and future-proof'' in three to five years, said its Vice Chairman and Managing Director Harsha V Agarwal.

Emami, which had gone for a change of its corporate identity with a redesigned logo last week, will also scale up its play in the premium segment ''very aggressively'' as the segment is soaring in urban India.

However, this will be done ''without losing sight of the real India, the rising middle and lower-middle income consumers where our brands carry weight'', said Agarwal, while addressing the company's shareholders.

In urban India, there is a growing demand for cleanlabel, eco-conscious products, while in rural markets, the shift from generic to branded personal care is accelerating — fuelled by affordable sachet and pouch formats of premium offerings.

Moreover, Emami which has power brands such as BoroPlus, Navratna, Zandu Balm, Kesh King, Fair and Handsome in its fold, is also confident about improvement on the consumption front.

''Looking ahead, we remain confident in the improving consumption outlook,'' said Agarwal, who is also the current president of the industry body FICCI.

With tapering of inflation, moderating interest rates and rural sentiment on the mend, he believes the operating environment will become more conducive.

''Add to this a strong forecast for monsoons and income tax benefits for the middle class, and we expect to see a revival in demand in the coming quarters,'' he said.

FMCG companies are facing a slowdown in consumption in the urban market, which contributes significantly to their revenue. Rural, which is mainly a value-based offering market, is growing ahead of the urban market for over last six quarters.

However, in the June quarter earnings, listed FMCG makers have reported a sequential improvement in sales from urban markets.

While sharing the trends, Agarwal said now consumers are moving away from ''chemical-laden products and embracing Ayurvedic, natural and herbal alternatives, pushing these categories firmly into the mainstream.

''There is also a growing convergence between nutraceuticals and FMCG, as health and wellness become central to everyday consumption. Quick commerce platforms are transforming access and convenience, leading to a rethinking of traditional general trade and modern trade strategies, and sparking innovation in packaging and impulse-driven product formats,'' he said.

This is forcing large players to acquire 'agile, high-growth startups', recognising their speed, relevance and adaptability, which are now ''key to staying ahead''.

''We are also working on building new engines of growth — segments that will define tomorrow. Health foods, nutrition, pet care and aloe vera based fruit juices — each one a deliberate strategic bet. In three to five years, our portfolio will be much sharper and future-proof,'' he said.

According to Agarwal, now nearly 45 per cent of its revenues come from high-growth and strategically important areas — modern trade, e-commerce and institutional channels, strategic subsidiaries like The Man Company and Brillare and its growing international business.

''These verticals, alongside our core portfolio, provide both scale and resilience to our growth engine,'' he said.

Emami's focus is not in categories like soaps or toothpaste but operates in ''niche spaces'' where household penetration is still low — single-digit, maybe low double-digit at best.

''That is not a weakness. That is headroom. That is opportunity. Most of our brands are still underpenetrated. We are not here to play in overcrowded categories,'' he said.

Emami has established leadership in ''high-margin, high-potential spaces'' where its rivals have yet to gain meaningful traction.

''The belief that Emami is overtly reliant on seasonal categories does not reflect the depth of our portfolio,'' he said, adding, ''while seasonal products like Navratna and Dermicool continue to thrive — and will always be part of our strength. We are equally anchored by robust, nonseasonal brands such as Zandu, Kesh King, Smart And Handsome and 7-Oils- in-One.''

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)