Home-grown FMCG company Marico Ltd, which entered into the ‘premium superfood’ category, is planning to ramp up its presence with new launches and by expanding its distribution channels.

The term ‘superfood’ refers to nutrient-dense fruit, vegetables or eatables that have a high content of antioxidants, protein, Omega-3, minerals, fibres or other essential nutrients with health benefits.

A while ago, Marico launched offerings such as green coffee, moringa green tea, high protein meal soup and meal replacement milk shake powders, across different flavours, under the ‘Saffola Fittify Gourmet’ brand. The offerings, which are sold online (on Amazon and on the company’s own website), are expected to be taken to offline distribution channels soon. However, the offline focus will be on premium outlets, including Godrej Nature’s Basket, Marico CFO Vivek Karve said.

“The idea is to expand this portfolio (superfood) significantly. And the channels that would fulfil our needs would be typically e-commerce or high-end food outlets; for example, Godrej Nature’s Basket,” he told BusinessLine .

The company is open to reach out to third parties for manufacturing and packaging. However, the key investment, he says, will be through “in-shop advertising”.

“In any food category, the margins are lower than in the personal care segment. However, within the food business, the margins of Saffola Fittify and Coco Soul will be much higher than the oils business; or even the masala oats portfolio,” Karve said.

Nearly 15 per cent of the Saffola portfolio is healthy foods.

Huge scope

According to an Edelweiss Securities report, Fittify is unlikely to compete in the lower end of the market.

“There is immense opportunity at the higher end, and some start-ups have been working on such products. Future growth will come from expanding the category through continuous innovation in product and package and (Marico) is taking definitive steps towards that,” the report said.

The healthy foods franchise posted growth of 23 per cent for Marico in the quarter to December 31, 2018 (over the same quarter last fiscal). The overall foods portfolio is expected to touch ₹200 crore by FY-20, it added.

Focus on Premium

Marico over the last few quarters has been looking to ramp up its kitty of premium offerings. The premiumisation strategy will be seen in categories like food, personal care and mens grooming and other verticals that the company operates in.

According to Karve, a favourable input cost (primarily copra prices) will help improve margins and fund growth.

However, copra prices have substantially risen in the aftermath of Cyclone Gaja in Tamil Nadu in November 2018.

“We are not doing any pricing action on Parachute. We have taken a wait and watch policy. If our predictions hold good, we are still looking at a lower copra price. This means there will be some additional margins which we can plough back and fund growth,” he said.