🔍 Inside the Rs. 62,000 Cr Empire: Marico’s Success Story
Marico beat major giants like HUL to become a market leader in the FMCG segment. Here’s how it did it.
From a small family-run business to an annual turnover of $1.3 billion in FY21-22.
From a beginner to a market cap of Rs. 62,306 crores!
From one brand to a house of 18 trusted brands.
From starting in Mumbai to expanding to 25 countries across Asia and Africa.
Such is the story of Marico.
Be it a mother oiling her kid’s hair with Parachute oil or the sizzling sound of spices frying in Saffola’s heart-healthy cooking oil, Marico has captured every Indian household.
The story of Marico is one of resilience, innovation and adaptability.
Today, join us on a journey through the pages of history, as we explore the inspiring story of Marico.
📖 Marico: The Origin Story
The tale goes back to 1971.
Mr. Harsh Mariwala, a 20-year-old commerce graduate, had joined his father’s company, Bombay Oil.
At the time, Bombay Oil was a B2B company in the spice trade.
Harsh dreamt big.
He envisioned a branded FMCG market for refined oils.
And by the mid-1980s, Mariwala had established a consumer products division that was responsible for 80% of Bombay Oil's income.
However, for the consumer products division to truly prosper in the fast-moving consumer goods (FMCG) industry, it had to become a stand-alone independent entity.
After three long years of persuasion, Mariwala finally convinced his family to spin off the consumer products segment of Bombay Oil into the new company, Marico.
And this marked the birth of Marico, as we know it.
📈 Marico: The Growth Story
To establish a strong market presence, Mariwala focused on diversifying the product portfolio and expanding the distribution network.
His intense focus on research, innovation and customer feedback was what helped him beat giants like HUL and ITC.
The mind share of Marico is such that coconut oil in India has become synonymous with the blue bottle of Parachute. And why not?
Parachute commands a 60% market share in the coconut oil market.
The secret to this lion's share of the market?
Innovation.
In those days, coconut oil was stored in 15 kg tin containers. Why tin?
You see, the combination of oil and plastic was apparently too delicious for rats who attacked plastic containers and destroyed them.
However, selling tin containers was also a hassle. Consumers wanted smaller and easier-to-carry packaging.
Plus, Marico wanted to be able to showcase its oil bottles in retail shops.
So, Marico innovated: it came up with rounded plastic bottles that couldn't be destroyed by rats.
Result? Whopping success.
Marico replicated this innovation-led approach in other verticals, from Saffola oil to Kaya Skin.
Now, this newcomer entering and disrupting sectors just like this got the attention of giants like HUL.
How did Marico defeat HUL?
🤨 Marico v/s HUL
Keki Dadiseth, the chairman of HUL, had a simple strategy for growing: aggressive acquisitions.
Marico was on the top of his acquisition list.
But Mariwala was not one to give up his dream.
That's when the price wars started.
HUL’s plan was simple: if it couldn’t have Marico, there would be no Marico.
HUL started selling products at heavy discounts, forcing Marico to reduce its prices.
It wanted Marico to bleed money till it died.
But Mariwala had a different plan for beating competition.
He increased spending on distribution and advertising. It introduced a campaign highlighting the cultural value of coconut in India. This campaign struck an emotional chord with consumers and increased Marico’s mind-share.
Result? Marico posted a double-digit volume growth.
This fight for survival taught Marico the importance of persistence.
And it is this persistence and continuous improvements that have helped Marico adapt to the changing needs of its consumers and introduce new products.
But it wasn’t always win-win for Marico.
When it tried to launch healthy baked snacks under the Saffola brand, it failed.
But even this failure taught it something: taste was important to Indian consumers. And Saffola Oats was born.
This spirit of experimentation has made Marico so successful, and Saffola a Rs. 2,000 crore brand.
As Harsh Mariwala puts it, “Experimenting businesses never lose, only learn.”
But it wasn’t just a focus on experimentation that got Marico where it is.
One of the other focus areas for Mariwala has been culture.
He always believed that a company's culture can be a make or break.
Marico has established a strong culture around the three Ps: People, Products, Profits.
Of this, people played an important role.
Mariwala and his team would personally conduct meetings with new employees to develop the company’s values.
Marico’s trusting working environment encourages experiential learning and unsuccessful experiments serve as lessons for further experiments.
Pretty much the ideal environment for work, no?
🤔 The Future Challenges for Marico
But this lucrative FMCG market is now heating up, with bigger players like Adani and Reliance also now entering the space.
And while these players have a whole suite of businesses, Marico is overly dependent on two brands: Parachute and Saffola.
If these categories are challenged, Marico could be in serious trouble.
So, how can Marico defeat the new challengers yet again?
Only time will tell…
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