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Innovate to Create Value
Marico’s focus on delivering sustainable profitable growth has translated into a compounded annual growth of 16% in topline and 24% in profits since inception.
Growing brand equity and bias for franchise expansion has led to consistent market share expansion in each of the key portfolios. More than 90% of the Company’s topline comes from market leader brands (either no. 1 or 2). The Company has also delivered a considerable improvement in profitability and capital return ratios, through tight cost management, prudent capital allocation and robust financial risk management.
At Marico, we believe that innovation leads the way to holistic growth and plays a major role in enabling a value-based approach to growth. The Company has outlined a four-pronged strategy designed to maximise stakeholder value, driven by a strong focus on innovation and execution capabilities.
OUR STRATEGIC PILLARS
01
Grow the core
02
Premiumise the play
03
Build new engines of growth
04
Commitment to sustainability
Value Creation for All Stakeholders
We focus on leveraging our core strengths to drive sustainable value creation whilst being the market leader in the segment. Our business activities and process differentiators are influenced by externalities such as changing demographic preferences, aspirational lifestyles, rapid technological advances and regulatory requirements. We seek value-accretive business opportunities in this dynamic environment, which sets us on a path of accelerated, yet sustainable growth, thus benefiting all stakeholders.
We aspire to tread the path of value-based growth by ensuring business sustainability, creating differentiated benefits for our consumers and by partnering in the growth agenda of our other stakeholders through continuous engagement.
01
Ensuring business sustainability
02
Differentiated benefits for our consumers
03
Partnering in the growth agenda of our other stakeholders
Value Creation for Marico: ensuring business sustainability
Ensuring business sustainability and consistent shareholder value creation remains our topmost priority. We plan to achieve this through strengthening our core segments of coconut oil, leave-in hair nourishment and super premium refined edible oils. Marico has evolved its processes across research and development and operations and has established a strong value chain to enable higher velocity of new product introductions and transformation of the go-to-market strategy. Further, our nurturing environment for innovation and entrepreneurial culture has allowed for growth in niche markets such as premium hair nourishment, healthy foods, and male grooming category. This has led to a steady focus on maximising volumes, market share gains and cost optimisation, despite an inflationary environment and macro headwinds.
Products Portfolio - India
Coconut Oil
Only player with pan-India presence through brands such as Parachute, Nihar Naturals and Oil of Malabar. Dominant market leader in volume and value terms.
Leave-in Hair Nourishment
Value Added Hair Oils - 25%
Market leader through brands such as Parachute Advansed, Nihar Naturals and Hair & Care.
Premium Hair Nourishment - 1%
Market leader through brands such as Livon Serums and Hair & Care Silk n Shine. Also includes functional offerings under new brands such as True Roots and Parachute Advansed Coconut Crème Oil.
Super Premium Refined Edible Oils and Healthy Foods
Saffola Super Premium Refined Edible Oils - 18%
Aspirational brand with dominant market leadership.
Healthy Foods - 2%
Presence through Saffola Plain and Masala Oats. Also introduced value added food offerings under Saffola FITTIFY Gourmet and Coco Soul.
Male Grooming
Presence across the wide spectrum of male grooming through Set Wet Hair Gels, Set Wet Deodorants, Set Wet Waxes, Set Wet Studio X and Parachute Advansed Hair Creams. Set Wet is the market leader in the hair gels category in India.
Others
Includes brands in fabric care (Revive) and anti‑lice treatment hair care (Mediker), and skin care (Parachute Advansed Body Lotion and Kaya Youth O2). We also have distribution rights of specialist skin care brand Bio- Oil in India.
Products Portfolio - International
Bangladesh
Parachute is the dominant market leader in Coconut Oil. Also a leading player in Value Added Hair Oils (VAHO) with Parachute Advansed, Nihar Naturals and many more Recently launched baby care brand 'Parachute Just for Baby'.
Vietnam
X-Men is the market leader in male shampoos and second largest in male deodorants. Also present in ethnic foods through the brand ‘Thuan Phat’. Recently entered female grooming with the brand ‘Sedure’.
MENA
Presence through brands such as Parachute, Parachute Gold, Hair Code & Fiancee. We are a market leader in hair gels in Egypt.
South Africa
Presence in ethnic hair care and health care segments through brands such as Caivil, Black Chic, Caivil Just for Kids, Just for Baby, Ingwe and Hercules.
Exports
The Company also exports its products to markets in the Indian subcontinent such as Nepal, Bhutan & Sri Lanka as well as the Indian diaspora markets across the globe.
Value for stakeholders: partnering in their growth agenda
Forging good relationships with our stakeholders lays the foundation of our ability to create value. As stakeholder awareness and needs rise, we strive to maintain the right balance between meeting the needs of competing stakeholder interests through continuous and proactive engagement and timely response strategies. Marico believes that mutual and inclusive growth is necessary and sets a precedent as a responsible organisation. We play a small yet significant part in the growth stories of our key stakeholders.
Consumers
Objective
- Develop sustained relationships
- Understand long-term and short-term needs
Modes of engagement
- One-on-one interaction
- Consumer satisfaction survey
- Call centre/Consumer Cell
- Digital platform
Frequency
- Continuous
Marico's role
Marico strives to provide exceptional product experience by creating unique and differentiated product offerings including value-added products such as super premium refined edible oils and healthy foods, leave-in hair nourishment and male grooming products.
Shareholders
Objective
- Become a better investee company
- Create high shareholder value
- Communicate performance and future growth plans
- Understand concerns & expectations
Modes of engagement
- Annual General Meeting
- One-on-one interaction
- Investor calls
- Press release
- Published results
Frequency
- Quarterly
- Half-yearly
- Annually
Marico's role
We ensure good returns on investments and long-term viability of the business. Total shareholder return since listing currently stands at 25% CAGR.
Business Associates
Objective
- Sharing of mutual expectations and needs, especially with regard to quality, cost and timely delivery
- Training and workshop
- Growth plans
- Sharing of best practices
Modes of engagement
- Periodic interactions (physical, telephone, mailer)
- Annual meets/events
- Training programmes and workshops
Frequency
- Continuous
Marico's role
To propagate the principles of sustainability throughout our value chain, we have developed Marico Responsible Sourcing (MARS) policy. We expect our business associates to operate in accordance with the principles outlined in the policy.
Members (Employees)
Objective
- Communicate organisational vision
- Training and development
- Support career growth plan
- Workplace needs and expectations
Modes of engagement
- Personal development programme
- Learning & development
- Engagement survey
- Annual Organisation Communication Event
- Digital interactions
Frequency
- Continuous
- Half- yearly
- Annually
Marico's role
Marico considers its employees as members and offers programs towards their professional and personal development. Leadership development, intrapreneurship, career mobility and member wellness programs are some examples of such initiatives.
Government & Regulatory Bodies
Objective
- Understand compliance and applicable regulations
- Collaborations on national agendas
Modes of engagement
- Physical Meetings
- Industry Forums
Frequency
- As and when required
Marico's role
Marico is committed to be a leading consumer goods company that meets and exceeds compliance and regulatory mandates towards its products and processes
Communities
Objective
- Maintain cordial relationship
- Improve livelihood and create positive impact
- Shared eco-system
Modes of engagement
- One-on-one interactions
- Trainings
- Field visits
- Camps and development programs
- Digital platforms
- CSR and Sustainability Initiatives
Frequency
- Continuous
Marico's role
Our belief of giving back to the society drives our social and community engagement initiatives. We strive to safeguard the farmers and farming interests through our flagship program 'Parachute Kalpavriksha' and aim to increase the farmer beneficiaries by 5% every year. We also invest towards underprivileged children education through our brand Nihar Naturals.
Value for all is anchored in the ethos of the way we do business. It is applied to ensure that business decisions balance financial, social and environmental considerations, always keeping in mind the best interests of the consumers we serve. Our value creation approach also helps us contribute towards nation building by working towards the UN Sustainable Development Goals (SDGs).
These goals define global priorities and aspirations for the year 2030, with an objective to achieve ecological balance. We have taken strategic steps to align our business activities, social initiatives and programs with the UN SDGs. The details of our initiatives mapped with UN SDGs are provided as outcomes in later part of this section.
Value for consumers: differentiating factors
With our uncompromising quality, trusted brands and product innovations, we endeavour to provide a unique value proposition to our consumers. The brands differentiate itself across the core and aspirational market segments. While we strive to bring innovation in every facet of our operations, availability of products to our consumers at the right time and for the right price is never compromised.
DIFFERENTIATING FACTORS FOR OUR CONSUMERS
Affordability
of core offerings such as coconut oil, refined edible oil and value-added hair oils. Value generation through cost optimisation has been ingrained in the cultural DNA of Marico, and the benefit is passed on to our consumers through affordable and fair priced products.
Availability
via 5.0 Million retail outlets serviced by our nationwide distribution network comprising 4 Regional Offices, 26 Carrying & Forwarding Agents (CFAs) and about 5,600 distributors and stockists. The network covers almost every Indian town with population over 5,000.
Product Experience
through reinventing product formulation, packaging or format to suit modern consumer lifestyles and provide the desired experience. Parachute Advansed Coconut Crème Oil, Livon Shake and Spray Serum and Nihar ExtraCare Hairfall Control Oil are some recent examples.
Early innovations and New Segments
Marico stays ahead of the curve with disruptive innovations across categories that address evolving needs of consumers by catching on to early trends in the market, in addition to meeting nuanced expectations of discerning consumers. Parachute Coconut Crème Oil, Saffola FITTIFY Gourmet range, Coco Soul range and True Roots are some steps in this direction. Set Wet Studio X focuses on male grooming and styling products to expand the market catering to the style conscious urban male.
Purposeful Brands
that meet Marico’s commitment to beauty, wellness and society. For example, Nihar Naturals Shanti Badam Amla holds the cause of children’s education close to its heart. Saffola has always encouraged people to take the right steps towards a healthy heart and a healthy lifestyle.
Our Business Model
Our approach to value creation is underpinned by a six-capital framework. It ensures that we are responsive to the needs of all our stakeholders and are cognisant of our role in creating a larger social value. Our business is aligned to this approach and, using this, we design and deliver products that disrupt the market with unparalleled customer value.
Our efforts enable us to build financial stability in a changing external environment. Through our activities and products, Marico aims to positively impact the lives of its consumers, employees and society.
Capitals
Financial Capital
Marico aims to efficiently leverage the monetary resources at its disposal to create, enhance and distribute value to all stakeholders in the value chain. The Company invests behind innovation and brand building, which enables it to consistently deliver an effective customer value proposition and expand its consumer franchise. The tightly defined policy framework protects itself against macro risks such as forex and interest rate volatilities.
Manufactured Capital
Manufacturing assets and infrastructural capacity is used to transform input resources into high quality products. Improving operational efficiency and productivity through lean approach is a relentless focus at Marico.
Natural Capital
Natural resources are indispensable assets to Marico. We aspire to offer safe and sustainable products, while at the same time promote environmental stewardship by adopting clean and green technology, responsible consumption and end of life solution.
Human Capital
Our people are core to the Marico ecosystem. We invest in our members through training and wellness programs and provide enhanced benefits. The organisational culture at Marico encourages collaboration and drives innovation. Marico’s talent value proposition rests on continuously challenging, enriching and fulfilling the aspirations of our members so that they maximise and realise their true potential.
Social & Relationship Capital
With a commitment to ‘Make a Difference’ to all the stakeholders we interact with, we have initiated several programs to empower our partners, suppliers, distributors and farmers in the larger ecosystem
Intellectual Capital
Through research and development, we are focused at developing brands and new products that are most trusted by the consumers. We also focus at investing in new technologies and innovation to create safer, smarter and simpler processes.
Inputs
- Debt: `352 Crore
- Equity: `2,999 Crore
- Capex: `162 Crore
- Working Capital: `1,514 Crore
Manufacturing facilities
- 8 domestic
- 5 International
Resources consumed in domestic operations
- 223,610 m3 water
- 367,207 GJ energy
- 283,429 MT raw material
- 36,339 MT of packaging material
- 1,517 total number of employees in India
- 4,824 man-hours training imparted
- `18 Crore Investment on CSR initiatives in FY19
- 1,300+ Business Associates
- 5 Million Retail outlets reached
- 'Parachute Kalpavriksha' program has reached over 170,000 farmers through digital and other modes
- `31 Crore Investment in R&D
- 54 members R&D strength
- 9.0% of Sales in FY19 - Investment in brand building
Business Processes
Product Development
Resources
Inbound Logistics
Manufacturing
Outbound Logistics
Consumer Connect & Use
End of Life/Recycling
Outputs
- Market Capitalization: $6.4 Billion
- Return On Capital Employed: 41%
- Return on Equity: 34%
- Dividend payout in FY19: 76%
- Turnover Value: `7,334 Crore
- EBITDA: `1,281 Crore
- Operating Margin: 17.5%
- Profit After Tax: `930 Crore (5 Year CAGR: 14%)
- 160+ Million packs sold every month
- 69.7 kgCO2e/KL GHG emissions intensity (56% reduction from baseline year FY13)
- 550,000 m3 water harvest capacity created (2.5 times the water footprint in our operations)
- 73% of total energy is from renewable energy source
- 94% of the packaging material used is recyclable by weight
- 31% Leadership talent in consumer facing functions of technology and marketing are women
- 64% of overall leadership roles in India are filled by home-grown talent
- 14% employees with tenure > 10 years with Marico
- ~200 Million Indian households (urban+rural) reached during the year
- 17% of domestic business revenue is from new age channels (modern trade and e-commerce)
- 11,800+ farmers enrolled and benefitted under the 'Parachute Kalpavriksha' program till date
- 200,000+ children benefitted under 'Educate Girls' program
- 5% critical material and service partners qualified for level 1 of responsible sourcing
- Key new products launched in FY19
Set Wet Studio X range, Parachute Advansed Coconut Crème Oil, Nihar ExtraCare Hairfall Control Oil, Hair & Care Dry Fruit Oil, True Roots Botanical Hair Tonic, Saffola FITTIFY Gourmet range, Coco Soul range, Kaya Youth O2 range. - 15 brands owned by Marico in India
Outcomes
- Marico touches the lives of 1 out of every 3 Indians through its product offerings
- Parachute is the largest coconut oil brand in the world
- More than 90% revenue is generated by market leader brands (No. 1 or 2)
- Marico has created shareholder value at 25% CAGR since listing
- Marico featured among the Top 25 Workplaces in Asia, among the Best Companies to Work For in India and in Manufacturing#
- Marico listed among top 5 S&P BSE 100 companies in Corporate Governance.*
- Improved farmer livelihoods through sustainable farming practices
- Enhanced water availability for agriculture and domestic needs through water stewardship programs
- Interventions across the value chain are aligned with the UN Sustainable Development Goals
Reporting Boundaries
Financial Capital: Global
Other Capitals: India, unless otherwise specified
Sources
* As per a study jointly conducted by International Finance Corporation (IFC), Institutional Investor Advisory Services India Limited (a proxy advisory firm based in Mumbai) and Bombay Stock Exchange Limited (BSE)
# As per a study conducted by Great Place to Work Institute
Our Purpose
To transform in a sustainable manner, the lives of those we touch, by nurturing and empowering them to maximise their true potential.
Portfolio: Beauty & Wellness
- Coconut Oil
- Leave-in Hair Nourishment
- Healthy Foods
- Male Grooming
Stakeholders
- Consumers
- Shareholders
- Members
- Business Associates
- Government & Regulatory Bodies
- Community