Adani Wilmar, the consumer business arm of Adani Group, is betting on staples, ready-to-cook (RTC) and personal care offerings as new growth drivers. The move will also help the company value-add to its low margin edible oil segment that accounts for nearly 85 per cent of its turnover.
The country’s largest producer of edible oil under the Fortune brand, Adani Wilmar, is also a major seller of soya chunk and atta (under Fortune).
Ajay Motwani, Marketing Head, Adani Wilmar, siad that consumer preferences are shifting towards packaged staples and trusted brands with a distinct pick-up in ready-to-cook offerings. Despite out-of-home consumption witnessing revival, the “low double-digit growth” in home consumption, on a large base, is encouraging and sustainable.
Post reverse migration, consumption trends in smaller towns have skewed towards branded offerings, with low unit price packs becoming popular.
“We expect growth in staples segments to continue through Q3 and Q4 (Oct-March). There will be some challenges with people seeking value for money offerings and downgrading too. But at the same time, people are shifting choices from loose to packet / packaged offerings,” he told BusinessLine. “We have fighter brands and LUP offerings in place where required,” Motwani added.
Keeping in mind consumer trends, Adani Wilmar launched ₹15-packs of “five minute soya chunkies with exotic flavors” in West Bengal, one of its largest markets. Offerings will be scaled up pan-India over the next few months.
The company also ramped up the superfoods segment with different variants of khichdi. More value-added offerings and variants across price points (superfoods) are planned.
Personal care portfolio – now includes soaps, handwash and sanitisers – will increase; while new packaged staples, like sugar – that was launched in Bengal – will be introduced in other prime markets like Uttar Pradesh, Bihar and Maharashtra.
With modern trade continuing to be under stress, Adani Wilmar is working on its direct distribution reach and its “feeder town network” in order to reach out to more general trade and rural outlets.
“Our future growth will come from RTC, staples and personal care. Branded players are gaining popularity here,” Motwani said adding: “We are also broadening the portfolio beyond edible oils”.
In edible oils, margins continue to be in “low single-digits” with increasing pressure on raw material prices. Categories like sunflower and mustard saw an upward movement in raw material prices to the tune of 30-35 per cent; and another 10-15 per cent hike in the palm and soya categories. This forced the company to increase prices by around 20-25 per cent and 10-15 per cent respectively, over the last six months.
“We intend to hold on to existing margins across categories this year. There is not much headroom in terms of price hikes or premiumisation,” he said adding that softening of core raw material prices are expected post December.