Marico to scale up food biz despite rising input costs

FMCG player Marico, makers of 'Parachute' hair oil and 'Saffola' edible oil, is betting big on its food business, as it looks to build the category and scale up its presence across India in the coming months.

The company, which had entered into the breakfast cereal category last year under the brand 'Saffola', said it is feeling the pinch of the high input cost though it ruled out any price increase in the near future.

"Health food is something that we believe that there is a long term potential..It is not fully scaled up nationally...We are still in the process of scaling it up," Marico CEO (Consumers Products Business) Saugata Gupta said.

Last year, the company had launched oats under 'Saffola' brand. Gupta said the product is currently available only in modern retail outlets in the metros and some of the cities in South India.

Besides, Marico is looking at expanding the oats category and is currently test marketing savoury 'Saffola' oats, which is spiced up with pepper and curry powder flavours.

He said the company will focus on strengthening the two products before getting into other categories in the food segment.

While high input cost continues to put pressure on its margins, he said the "worst is over" and the company is concentrating on building its brand and grow volumes across segments.

"Given the kind of input cost and cost structure and the fact that we have chosen to grow consumer franchise and get more consumers on to the fold, perhaps our earnings growth will be little muted in the immediate terms," Gupta said.

Despite the challenges of high input cost and to manage cost efficiently, the company said it will continue to look for acquisitions, particularly in the international markets.

"Our growth will be both organic an inorganic. As and when opportunities come up, we will look at it...Opportunities are more in the overseas markets and in many international markets we don't have a presence and inorganic route gives us a foothold," he said.