Lot Of Room For Category Growth

Could you brief us about your journey over the past five years?

We have a portfolio of three brands. Sugar Free is the number one brand of sugar substitute in India. We have a 92 per cent market share and we have been holding this position for a minimum of five years. There is lot of room for category growth and category expansion, which represents a huge opportunity for the future. The brand has been built over the years through consistent marketing efforts and a great deal of advertising and communication, which reflects what the products can do and matches with the lifestyle of consumers. We are privileged to be associated with our brand ambassador, Master Chef Sanjeev Kapoor. We have a portfolio of products and a portfolio of solutions depending on what the consumers want.

We have also got a sub-brand called ‘Sugar Free Natura’ which is offering consumers an option with which they can cook. Many consumers make sweets at home and often they don’t want to eat sugar because of its ill-effects. Diabetes in India is almost at an epidemic level and the incidence of diabetes in terms of age at which the consumers get it is also coming down. This means that people are who are being affected by this are of a younger and younger age. It partially happens because of stressful living, tension, too much travel, irregular meals, etc. All these things are contributing to this lifestyle chaos. We have been in the business for more than two decades now and have changed as per the changing lifestyles in India.

Our second business is a line of skincare products. These are under the brand name of ‘Everyuth’. We compete in three categories, face wash, facial scrub and facial peel-off. In all the three categories we have practically been the pioneers and in the other two categories - scrub and peel-off - we are the number one brand by a fairly wide margin. We have had a combination of consistent marketing programs and high-class products. We also have two strong brand ambassadors. Our third business is ‘Nutralite’ - that’s a brand which was acquired in the year 2006-07, and we have built it from a purely institutional into a retail-cum-institutional business. Now retail contributes 30 per cent of the business. It is available in up-scale restaurants and hotels as well as with small sandwich vendors and ‘dhaba’ owners, so it has a very broad base clientele.

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What are the challenges faced and strategies adopted by you for emerging among the top value-creating companies today?

In the case of ‘Sugar Free’, the real challenge is not market share because we only have 92 share points. The challenge there is converting non-user and growing outdoor category penetration. However, this will happen on its own as consumers are increasingly becoming conscious of their health and lifestyle. However, the role of the company is to make more people aware of the benefits of the brand and encourage them to adopt a healthier lifestyle. That’s a challenge. Secondly, in the case of skincare, there are categories like face wash which are extraordinarily competitive.

So the challenge for us is to remain relevant because there is relatively smaller market share and therefore we continue to innovate and support the brand in a financially responsible way to generate growth and maintain if not increase our market share. In the case of scrub and peel-off, category penetration levels are low and considering that we are the number one brand, this represents an opportunity. So the challenge there is of course to continue investing in a financially responsible way with product and marketing programs that will drive exponential growth. Of course, business sales and distribution remain one of our big challenges because it’s a large and complex retail environment, and we compete in some very small categories at this point and time.

Therefore, expanding distribution remains an opportunity for us. In the case of ‘Neutralite’, the challenge is two-fold; the institutional business is price-sensitive and there a lot of unorganised sector players who compete with us in price. Therefore, maintaining high levels of service whether it is to large hotels or to a small sandwich vendor is a real business opportunity and a challenge to put this trade in one frame. The second challenge is to expand the retail business which is the more profitable part of the business. We continue to build marketing programs that makes consumers aware that ‘Neutralite’ is truly a healthier alternative to butter.

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What are your capex plans for the next couple of years?

We have enough capacity to last for 3-5 years. Whatever capex we do annually will be more than the maintenance capex. We don’t have any major capital investment and capital expenditure plan.

Going forward, what will be the major growth-driving factors?

What I described as key challenges will also be our growth drivers. Household penetration in ‘Sugar Free’, market share expansion in face wash, category development in scrub and peel-off, building retail in ‘Neutralite’, etc. are the challenges as well as opportunities.

What is your perspective on value-creation for your different stakeholders?

Value creation for shareholders in an FMCG company comes from building strong brands and growing them at a rate of growth which is faster than the market. We have been able to consistently do that over time. The FMCG business is an expensive business to build and support, and therefore having a marketing and support program with a high ROI (return on investment) is extremely critical and that is how we eventually generate growth, both in topline and bottomline as well as shareholders’ value.

How do you stand alone from other FMCG companies in terms of corporate values?

We demonstrate a great deal of responsibility internally and there is an accent on performance as well as performance-based culture. We also exhibit a great deal of respect for the customers and listen carefully to their needs and requirements. Many of the improvements, mainly in products and services, reflect our ability to understand consumers and adapt our business to their needs. In terms of marketing programs, I think our innovation and pioneering efforts have stood us in good stead. For example, we are the first company in India to launch sachets in the face wash category. There will be many more innovations in the years to come.