It’s a difficult position to be in — to head an organisation that is headed for a stake sale. But Marzin Shroff, MD & CEO of Eureka Forbes, that according to reports is on the block and has three suitors, appears quite unfazed. The man who calls himself a positivist or one who makes the best of whatever happens prefers to treat the news optimistically.
“The Shapoorji Pallonji group is looking at unlocking value and reducing its debt burden. As a result of which, Eureka Forbes — one of the jewels in the crown — is undergoing a shift in ownership. Our plans are, however, set. The way I see it is that a new investor will bring in either synergies or investments to stimulate growth,” he says.
Shroff tells us that a favourite quote of his is Nietzche’s line — “That which doesn’t kill you only makes you stronger.” This phrase, which he quotes often during town halls, could apply to business, or any human situation. And he personally has the experience of this.
In June 2015, within the space of a week, Shroff was diagnosed with two dangerous cancers — leukaemia and a growth in the kidney. His regular doctor was pessimistic. The advice he got was not to waste time and head to the US for treatment, and his company was even willing to pick up the $2 million tab. But Shroff listened to his gut and opted for CMC Vellore, simply because he was impressed by the dedication and passion of the Dean. He lived in Vellore for six months getting treated and was miraculously cured. “I am living my second life,” he says simply.
We are meeting Shroff over a Microsoft Teams call at lunch hour. In the normal course, we would be meeting him face to face perhaps at his favourite Willingdon Sports Club in Mumbai, but Covid-19 has necessitated Table Talk to be conducted virtually. While we are sipping buttermilk and eating sandwiches, Shroff only has plain water. He explains that after his cancer, he has trouble eating certain things, especially anything with spice and even chocolates, and prefers to eat cheesy continental food but has tubs of ice-cream.
In 2017, when Suresh Goklaney, the then MD was retiring, Shroff was made the Chief. “It was a big risk for Shapoor (Mistry) to take. I was not fully well yet,” he says.
One of the first steps he took upon being made MD & CEO, he says, was to quickly appoint a successor — his long time friend, Vikram Surendran. “He was with us then went to Hindustan Unilever where he ran the water business before returning to the fold. I made him President and de facto successor,” says Shroff.
Mistry’s lack of hesitation in making Shroff the MD was not surprising. For the Parsi boy from Bombay who schooled in Panchgani and did his Chartered Marketing from the UK, Eureka Forbes flowed, well, like water in his blood!
Though he did go out of the company for a bit to pursue his entrepreneurial dreams, and also did a stint in advertising (he was part of a team that named Yes Bank!) and even one in the diamond industry, he always kept in touch. When he returned and rose to become CEO of direct sales and marketing, he was one of the biggest ambassadors of Eureka Forbes, actually living the tagline of the company — Relationships for Life.
As CEO, Shroff undertook a transformation at Eureka Forbes. “I realised that as a company, we were internally focussed. With BCG’s advice, we underwent a transformation project over three years, which just got over in May. It was the best decision to bring them in,” he says.
The brief to BCG was simple: Eureka Forbes was a multi-channel company, it had brand, people and business strengths yet these were not translating into profitability.
“We did a fix plus variable deal with BCG, in such a way that we leveraged them inside out. We didn’t want a consultant, but a consultant cum partner. They put together a team for us. We aligned the KRAs of the BCG team along with our core team. We achieved all our objectives and so did they,” says Shroff.
But Covid-19 happened. “Suddenly the whole direct sales model which involved going door to door got impacted. We had high fixed costs,” says Shroff.
They had to take a hard look at business, people and products. Already on the people front, the model had been changing. “There was a time when we had 5,000 people for direct sales. Today, we have only 1,200, though we still have 5,000 feet on the streets. Those are off the rolls. The variabalisation happened,” he says.
On the product front, Eureka Forbes was moving up the value chain, launching more premium offerings. For instance, products like the Ayurfresh water filter, which dispenses herbal water. Laced with seven herbs, the product was all set to be launched in April 2020, but the pandemic happened. Subsequently, it was launched in June with a big ad campaign during the IPL later in the year, and according to Shroff has done exceedingly well.
The big change that has happened at Eureka Forbes over the years, says Shroff, is that from a direct sales company, it has become a multi-channel company. In the organised water purification market,” says Shroff, “we have almost half the market — 100 per cent of direct sales, one third of e-commerce and over 30 per cent in retail — a full 10 per cent ahead of our nearest competitor.”
He says the company is witnessing high growth in e-commerce. “A few years ago, e-commerce contributed to only 2 per cent of our business, today it’s just under a tenth of our business,” he says.
Their business model, he feels has become more digital — even the direct sales part of it.
The other big change that has happened at Eureka Forbes is the creation of a new brand architecture: all non-water products would be sold under the brand name Forbes. And all water products would sport the Aquaguard name.
Shroff explains that the move was because of the shift from the direct sales model. “When we were selling direct, we would be selling a vacuum cleaner called Euro Clean, or a water filter called Aqua Sure and so on. But on a multi-channel format, we needed a uniform brand nomenclature otherwise it is too confusing for the consumer,” he points out.
So why Forbes? Shroff says that research showed that Forbes resonated more with consumers and came out more powerful. Also, if you look back into Shapoorji Pallonji group’s history, the oldest registered company in India is Forbes & Co (it was registered in 1767) and it is the parent company that owns Eureka Forbes.
Apart from Ayurfresh, there were other innovative pandemic launches from Eureka Forbes including the Forbes Coronaguard powered by Shycocan, which Shroff calls a fascinating product. Developed by Dr Raja Vijayakumar, the company is one of the licencees for the product, which when you run, removes all viruses on the surface and in the air in a room.
The brush with the life-threatening cancer has certainly changed Shroff in terms of his reading habits, and his pursuits. He reads a lot of spiritual books now and also practises energy healing.
A fountain pen collector, he spends a lot of time listening to music, especially jazz.
Shroff says that further growth for Eureka Forbes will come from “Water Plus” products. The company is innovating on temperature and taste. Ayur is one such example. A big selling point for Aquaguard is the copper in its water cartridge, he says.
And, of course, he reminds us that the organised water category is only ₹3,000 crore. A bulk of Eureka Forbes revenues actually comes from service. “We still have an unorganised market to capture.” If he does, it will be his Eureka moment.