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Business News/ News / India/  Patanjali to focus on high-margin premium products
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Patanjali to focus on high-margin premium products

India’s FMCG industry grew by 7.6% in the December quarter, 2% lower than the year ago, researcher NielsenIQ said

Fast-moving consumer goods companies have been struggling with higher raw material prices for two yearsPremium
Fast-moving consumer goods companies have been struggling with higher raw material prices for two years

Patanjali Foods, formerly Ruchi Soya Industries, which sells biscuits, edible oil, soya-chunks and honey will launch more high-margin premium products, including cookies, vitamin-gummies and millet-based foods in the next two quarters, Sanjeev Asthana, chief executive, Patanjali Foods, said in an interview.

“Some launches will happen in February-March and some by the next quarter. There is a big effort to move towards premium ranges for both improving our margins and offering a superior basket to consumers to choose from," he added.

“Biscuits, as you know, tend to give low margins unless you are in the premium category as well. And, there is a lot of pricing pressure typically in lower end of the biscuit market. That is where we are working quite actively," Asthana said.

Fast-moving consumer goods companies have been struggling with higher raw material prices for two years.

Though commodity prices are down from their peaks, raw material such as wheat continues to pinch amid weak demand for packaged consumer goods.

India’s FMCG industry grew by 7.6% in the December quarter, 2% lower than the year ago, researcher NielsenIQ said.

In 2019, Patanjali acquired Ruchi Soya for 4,350 crore, and in 2022, Patanjali Ayurved sold the food retail business to group firm Ruchi Soya for 690 crore, and renamed it as Patanjali Foods. Its flagship brands are Mahakosh, Ruchi Gold, Sunrich, Nutrela edible oil and Ruchi Star.

The firm is targeting 7-10% of sales from its foods business in 2-3 years, Asthana said. “If you look at the foods portfolio our effort is to get 7-10% from the premium category in three years."

This will have a bearing on profitability, he added. In Q3, its operating revenue was up 26% from a year earlier to 7,926.64, but fell sequentially.

In sports nutrition, Patanjali is set to launch flavoured whey protein powders. “It will also include new concepts like gummies for the youth." It will also launch millet-based variants under soya-brand Nutrella.

“In rural India, there is some (demand) stress after a big momentum we had in the second and third quarters that was led by festivals like Diwali and wedding season. Now we are seeing some tapering off. It should pick up," he said.

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Published: 10 Feb 2023, 11:26 PM IST
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