Marico CEO Saugata Gupta has expressed optimism about the rebound of urban consumer spending in India, despite the current slump.
Marico CEO expects growth from upcoming quarters
According to Gupta, high food prices driven by food inflation are causing a temporary dip in urban demand for packaged consumer goods. However, he expects this trend to reverse in the next one or two quarters as food inflation stabilizes.
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“Whenever there are bouts of high food inflation, people tend to titrate or downgrade on FMCG consumption. That’s what we are witnessing but this will smoothen out soon. In a quarter or two, things should be much better with respect to urban consumption as we expect inflation to stabilise soon,” Gupta said to ET.
Gupta noted that lower and middle-income urban households are most affected by rising food costs, while higher-income consumers remain unaffected. However, Marico’s premium brands, like Plix and True Elements, continue to perform well. These brands, along with other food and personal care products, make up 21% of Marico’s revenue, up from 6% in 2020.
Top end of the market is not impacted – Saugata Gupta, Marico
“Foods, premium personal care and digital business contribute about 21% to our top line (revenue). This part of the business was only 6% in 2020 and has been immune to any urban slowdown. The top end of the market is not impacted,” Gupta explained.
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According to NielsenIQ data, rural consumption of packaged goods grew 6% in the last quarter, outpacing urban growth of 2.8%. Gupta attributes this to rising rural incomes. He believes the long-term growth potential for consumer packaged goods remains strong. Marico is expanding its food and premium personal care offerings to cater to changing consumer preferences.
“In food, the runway for growth is huge because in India, the penetration of packaged food is low. Today, people want to stay healthy and look good and these are the important growth drivers in India today,” Gupta stated.
