Mumbai: India’s third largest fast moving consumer goods company by sales, Dabur India Ltd, plans to double its revenues in two years by ramping up its product range and launching new categories of food and personal care merchandise, a top official said.
On the shelves: Dabur to launch Vatika hair conditioner soon.
The company will soon introduce male grooming, skincare and ready-to-eat products to widen its consumer base. “The male grooming market in India has less momentum and is an interesting segment. We plan to introduce products in the haircare, deodorant and skincare range for male care,” said V.S. Sitaram, executive director of the consumer care division at Dabur.
While Dabur intends to aggressively enter new segments, it is also revamping its existing personal care portfolio by repackaging and adding new product lines. For instance, it will launch Vatika hair conditioner in the next few days, and other haircare products such as gels and creams would follow suit. “We are looking at launching a completely new skincare line with products such as cleansing lotion, anti-ageing solutions, and body skincare range under a different brand name,” Sitaram said.
According to industry estimates, less than one out of four Indians use branded skincare products.
The segment, however, has been growing at 16-18% a year, according to a report by multinational brokerage firm Credit Suisse.
The country’s largest consumer products firm, Hindustan Unilever Ltd, leads the market in skincare products with a share of around 55%. This segment has recently seen increasing competition with multinationals such as Procter and Gamble Co., L’Oreal India Ltd and Nivea India Pvt. Ltd launching several high-end products. Even home-grown companies such as Wipro Ltd’s Wipro Consumer Care and Lighting unit and Elder Health Care Ltd are planning to enter the market soon. Dabur sold products worth Rs1,846 crore in the first nine months of the fiscal year ended 31 March. In the year before that, its sales stood at Rs2,043 crore.
In the past one year, the company has relaunched almost 60% of its products and introduced 10 new items such as Dazzle surface cleaner and health drink Chyawan Junior. Dabur is also extending its Gulabari rose water brand to launch lotions, cold creams and face freshener sprays.
The firm is betting big on its foods business, which sells fruit juice brand Real and food pastes brand Hommade. With the recent merger of Dabur Foods Ltd with Dabur India, the division’s distribution strength has increased about three times and this is expected to help the brands substantially, Sitaram said.
“Our strategic focus is to go beyond fruit juices. Processed foods are a great area to be in and products such as fruit-based milk or yogurt can be a possibility. We are also looking at entering ready-to-cook and ready-to-eat market under a different brand name.”
The premixed foods segment has established players such as ITC Ltd, Kohinoor Foods Ltd and MTR Foods Ltd. Dabur was in a race to acquire MTR but lost out to Norwegian company Orkla SA, which acquired it for $80 million (Rs320 crore now).
“Dabur has an excellent product portfolio with multiple growth drivers, which ensures that the company’s growth trajectory is insulated from downturns in any single category,” said Sameer Deshmukh, an analyst at IL&FS Investsmart Securities Ltd, that has a “buy” rating on the stock. “To put this in perspective, none of the large brands contribute more than 15% of company’s aggregate revenue.”