KOLKATA-HEADQUARTERED Emami recently celebrated 50 years of existence. It was in 1974 that founders Radheshyam Agarwal and Radheshyam Goenka quit their corporate jobs to launch a cosmetic company at a time when the likes of Hindustan Unilever and Dabur ruled the roost. Despite tough competition, their products, Emami Talcum Powder and Emami Vanishing Cream, became popular, particularly in eastern parts of the country. The entrepreneur duo, however, realised that in order to get scale, they needed a product portfolio that was different from that of the biggies. This led them to launch products such as Navratna hair oil, which they positioned as therapeutic and enabler of long and black hair. They also launched Fair and Handsome, the first fairness cream for men, and eventually forayed into ayurvedic products with Himani Sona Chandi Chyavanparash.
“Revenue, along with good profitability, is what we have always believed in. That’s why we have always focused more on niche categories. The category might not be very large, the penetration might not be deep, but we are market leaders. This has worked for us,” says Agarwal’s younger son, Harsha Agarwal, MD, Emami. In last decade, the company has acquired a host of niche brands such as Zandu, Kesh King and Dermi Cool. The ₹3,400 crore company has one of the highest EBITDA growth rates in FMCG sector, says Agarwal.
Just like Emami, most mid-sized FMCG companies are grappling with the challenge of creating such USP. They not only have to fight large players but also regional brands, which have, in last two-three years, grabbed market share from biggies and can’t be taken for granted. While regional brands are strengthening presence in mass categories such as detergents, soaps and food products, the bigger companies are eyeing value growth through carefully planned premiumisation. For example, over 35% of HUL’s revenue comes from premium portfolio, while 60% of Nestle India’s growth in last few years has come from premiumisation. This has made it imperative for mid-sized companies such as Emami, Parag Milk Foods, Orkla India, Bikaji and Jyothy Laboratories to focus on niche areas. Parag Milk Foods’ focus on value-added dairy products such as cheese, whey protein and farm-to-home milk brand ‘Pride Of Cows’ led to 61% growth in revenue (₹3,000 crore) in FY23. The ₹1,985-crore snack manufacturer, Bikaji Foods, registered 22% growth in revenue; a large part of the growth came from traditional Indian sweets. “During festival season, demand for traditional Indian mithai exceeded our capacity. We started working with national retail chains like DMart and Reliance and made special packs for them. Even premium sweets such as kaju katli have done extremely well for us,” says Manoj Verma, COO, Bikaji Foods.
