By dropping the price of its flagship brand Parachute by 6 per cent at the beginning of the quarter, Marico is planning to address the drought-affected areas in States such as Maharashtra and Telangana to maintain volume growth at 8-10 per cent across the franchise.
Addressing analysts for the Q4 results, Saugata Gupta, MD & CEO, Marico, said: “We have cut the price of Parachute since it has a significant and strong market in the drought-affected states like Maharashtra and Telangana. We would like to extend the price drop between 5 and 7 per cent for the next 12 months.’’ With copra prices also dropping by 19 per cent during the fourth quarter, Marico was in a position to drop prices and witnessed 6 per cent volume growth during the quarter.
With rural demand continuing to be stressed, the severe drought across India remains challenging for most FMCG majors. Marico, which has a 34 per cent share coming from the rural markets, has been peddling its brands like Nihar Shanti Amla along with Parachute coconut oil in these markets.
For its urban-centric brand Saffola, Marico has already adopted differential pricing strategy across regions and variants. “Urban growth is at 3 per cent in value terms but there is going to be recovery in the second half of the year. While we have not raised the prices of Saffola this quarter, lower priced variants like Saffola active has managed to attract a different and new set of consumers,’’ said Gupta.
Other categories like oats under the Saffola franchise has also boded well for the FMCG company as it has managed a 27 per cent share. “Savoury oats have moved from being a breakfast cereal to an in-between meal snack,’’ he added.
Marico posted a 26 per cent increase in net profit at ₹138.4 crore for the quarter ended March. Net sales were up by 7 per cent at ₹1,302.78 crore.