Dabur CFO hopes to keep FY11 margin at 19-19.5%

Personal care and food products maker Dabur India Ltd expects to maintain a margin of about 19-19.5% and achieve a sales growth of 15-17% in 2010/11, a top official said on Wednesday.

"Monsoon has been good. The demand has been reasonably robust. Only challenge is inflation," Chief Financial Officer S. Raghunathan told Reuters over the telephone.

In July-Sept, Dabur increased prices of a few products - mainly hair oil by 3-4%. It may resort to further price increases this quarter, in its bid to maintain margin at last year's level of around 19-19.5%.

"Our objective is to hold our EBITDA margin. We have to watch inflation cautiously and do it in a calibrated way but immediately we are not looking at any big price increases," Raghunathan said.

India's wholesale price index rose 8.62% annually in September with food price inflation accelerating to 15.71%.

Dabur plans to launch two variants of flavoured Chyavanprash immediately and two over-the-counter health products for cold and vitality in the next few weeks, Raghunathan said.

NET UP ON VOLUME GROWTH

Dabur on Wednesday said its July-Sept. consolidated profit rose 15.4% to 1.6 billion rupees on strong volume and cost cutting measures. Sales rose 14.7% to 9.72 billion rupees.

"Despite a significant rise in input costs, Dabur contained its material inflation through higher buying efficiencies and stringent cost savings programmes, and expanded its EBIDTA by 16.2%," chief executive officer Sunil Duggal said in a statement.

International business, which contributes about 20-22% of total revenue, grew 19%, while the healthcare segment grew 19%, but growth moderated in shampoos, Raghunathan said.

Dabur plans to almost double its retail presence to about 40-50 stores in 12-18 months from 25 stores now, Raghunathan said.

"We have reworked our strategy on that. We have moved into much smaller size stores to make it more viable," he said, adding there was no plan to sell off the retail business.

Shares in Dabur, valued at about $4 billion, ended 1.2% down on Wednesday in a weak Mumbai market.

 

Coke plans to launch bottled Nestea before year-end

In a bid to strengthen its position in the instant tea segment in India, global beverage major Coca-Cola is considering to introduce ice tea brand Nestea in bottles before the -end of the year.

“We will be coming into bottles for Nestea brand before the end of the year,” said a company official.

Nestea is a product from Coca Cola’s global 50:50 joint venture with FMCG giant Nestle- Beverage Partners Worldwide. It is currently available in India in powdered pouches and through vending machines. The product is marketed in India by Nestle.

"Nestea is present in India for sometime now. It is available in sachets and vending machines. So the logical extension for us is into bottles,” the official added.

“At Coca-Cola India we are constantly evaluating and exploring opportunities to further strengthen and diversify our beverage portfolio. However, as a matter of policy, we do not comment on rumour or speculation,” a Coca Cola India spokesperson said.

We will focus on new products to take on MNCs

                   Parle Agro joint MD & CMO Nadia Chauhan is scripting a fresh growth strategy to take on multinational players in the F&B(food & beverages) sector in India. To start with, the company is planning to grow its foods business aggressively to fight global competition. Also, the company is planning increase its global presence this fiscal. The Rs 1,500-crore Parle Agro is currently present in over 18 countries including the USA, the UK and Australia. Chauhan tells FE’s Lalitha Srinivasan about Parle Agro's future plans.

What will be Parle Agro's strategy to fight multinationals in the F&B sector?

As an Indian company, we understand the pulse of the Indian consumer. We strongly believe in creating new categories and offering innovative product experiences to consumers. This has been the backbone of our success in India. The challenge is to offer consumers a product experience that they have never experienced before. To stay ahead of competition, we will continue to focus on introducing innovative products, strengthening our distribution network, increasing our consumer base and ensuring that our brands always remain relevant to consumers.

Recently, Parle Agro raised prices of its fruit juice brands to offset the rising input costs. Are you looking at any fresh price hikes ?

We don’t have any plans for price hikes as of now. We raised the price of Frooti 200ml Tetra from Rs 10 to Rs 12. We had sustained the Rs10 price point for more than a decade despite a rise in prices of all raw materials.

For high visibility of your brands, are you planning to increase your ad budget this fiscal?

Our ad budgets are revised every year as per each brand’s requirement. Besides ATL (above-the-line) we will be spending on BTL activities like consumer sampling and promotions at points of sale.

Are you planning to foray into new categories in India?Any new packaging intiatives?

New product development and product innovation are a constant at Parle Agro. We have just entered a new category in foods – round snacks, with Hippo Round-Round. We have recently introduced Frooti and Appy in 160 ml Tetra packs at Rs 10 and Rs 8 respectively.Both the price points are strategic a nd will help us capture the entry level segment for branded beverages.

Are you planning to take any of your home-grown brands to new georgraphies across the globe ?

We are definitely looking at increasing our global...

Retail survey.................

a study on trade shows............... @ Belgaum city .

Retail outlet survey on ::
Assortment , visual display, customer opinion on organised Retail Formate.
Retail strategy,
merchandising , 














































 Retail brand building activities such as ;  outdoor display, TVC,

 

 

SPECIAL
Handlooms  trade show,,,,,,,,,,,,,,,,,,,,








NEXT SURVEY ZZ SOOOOOOOOOON,,,,,,,,,,,,,,,,,,,

Everest Brand Solutions appoints Samir Chonkar as Executive Creative Director.

       

                               Everest Brand Solutions has appointed Samir Chonkar as Executive Creative Director. Chonkar returns to Everest Brand Solutions after a successful stint at Draft FCB Ulka, where he was Creative Director since 2008, and handled a diverse portfolio of brands like Tata Indicom, Amul Ice Cream, Tata Consultancy Services, Tata Corporate and Bajaj Almond Oil among others.

For Chonkar, this assignment is more of a home coming. Armed with an art degree and passion for advertising, Samir walked into Everest in 1992 and stayed on for 14 years to create some memorable advertising for the agency’s diverse clients.

       During his stint at Everest, he worked on a slew of FMCG brands like Parle-G, Parle Monaco, Krackjack, and Hide & Seek cookies, Tortoise Mosquito Repellent, Frooti and Bailley. He handled brands ranging from Corelle to Emirates; LIC and ING Vysya to Hitachi, Siemens and SKF Bearings with aplomb. Samir’s work showed a spirited edge while working on brands like Bagpiper, Shark Tooth Vodka and Romanov.

His already well-rounded experience was further enriched by a stint at M&C Saatchi as Executive Creative Director, working on brands like Jet Airways, Franklin Templeton and Bajaj Allianz.

           D. Rajappa, President, Everest Brand Solutions, said, “Everest is delighted to welcome Samir Chonkar at a senior leadership level. In his role as Executive Creative Director, we hope Samir will not only create impactful and great campaigns but also play a mentoring role to his team. As a mature advertising professional, Samir’s vast experience across categories will benefit the select set of blue chip brands that Everest represents.”

                 "I would add to Team Everest's passion for creating effective advertising that works well for its clients," says Chonkar

           “Induction of senior professionals with exposure across categories is in line with Everest’s philosophy of offering valuable experience of mega brands and large agencies coupled with nimble-footed edge of a small agency--thus giving the best of both worlds to the clients,” added Rajappa.

                                 “I would add to Team Everest’s passion for creating effective advertising that works well for its clients,” said Chonkar. 

The next FMCG revolution is due

               Happy times are here for the Indian consumer. His every wish is coming true, and that too at discounted prices! Inflation might be skinning his knees, but if he wants to hitch a ride to his destination, he can get a good motorcycle at half the price he could get it at earlier. Forget bikes, he can now dream of getting a brand new car for Rs 1 lakh. 

  Where once having a desktop computer in the house was a luxury and laptops were only for the suits sitting in the cabins, now he can get laptops for Rs 15,000. When he thinks of getting himself a new mobile, he might not have the money to buy a Blackberry, but he can certainly buy multiple Micromax models in the same price. And we’re not even talking of the wave of cheap Chinese manufactured mobile handsets that can be found on Indian streets priced at a lowly Rs1000.

         It’s an exciting time when more and more products are being made available to more and more income brackets. It’s happening in electronics, it’s happening in automobiles, it’s even happening in consumer durables.

         But what one misses in the whole scheme of things is some scintillating new development on the FMCG (fast moving consumer goods) scene. This is the one canvas where you can make a difference to maximum people across strata. But the last real revolution that one witnessed in this space was the sachet revolution by CavinKare. 

   

     That was quite a revolution when the same shampoo that was pitched as a luxury item by the biggies was now available at 50 paise per wash. No wonder the consumers at the middle of the pyramid lapped it up and category penetration shot up. It was one of the few times when the FMCG majors got a jolt that made them sit up and take notice. The other time was when Karsenbhai Patel introduced Nirma priced at a third of Surf. In a one brilliant stroke, he gobbled chunks out of Unilever’s market share and caused multiple revisions in their market strategy.

      But since then, there has been a lull on the FMCG scene. No challenging of existing category codes, no trying to expand penetration, no new price revolution. The whole point of technology is that you can get better products at a lower price. Then why are we still paying Re 1 for. 

MAGGI MAGIC .............

HUL re-launches Red Label, ropes in Anupam Kher

The country's largest fast moving consumer goods Hindustan Unilever (HUL) today said it has re-launched Brooke Bond Red Label tea brand.

As a part of the re-launch that is aimed at changing the brand's positioning, HUL has released a new advertising campaign featuring Bollywood actor Anupam Kher.

"Red Label has been re-launched as not just a tasty but healthy drink. For the first time the brand will have a Bollywood celebrity as part of the campaign," HUL, Category Head (Beverages) Arun Srinivas said in a statement.

The company's Broke Bond portfolio also includes brands such as Taj Mahal, 3 Roses, Taaza and Sehatmand. Red Label is HUL's largest tea brand, the statement added. 

HUL, P&G, Reckitt, Kellogg's raise margins up to 25%

 Modern retail has taken a lead in its fight against consumer product companies with consumer product companies including Hindustan Unilever and Procter & Gamble increasing retailers’ margins on the wake of tough competition from the latter’s private brands. 

“Since March this year, multinationals including Hindustan Unilever, Procter & Gamble, Reckitt Benckiser and Kellogg’s have been increasing margins by 10-25% in leading supermarkets like Big Bazaar and Reliance Retail to match up with low priced private brands offered by retailers,” a top industry official said on condition of anonymity. 

These multinationals have, however, increased margins only in categories such as diapers, ketchups, floor cleaners, soups, breakfast cereals and toothbrush, where retailers’ private labels have been most active in new launches and gaining market share. 

The friction between retailers and fast-moving consumer goods players over higher margins and better shelf space has been there for some time now and hit the headlines when Future Group , the country’s largest retailer, pulled Kellogg’s breakfast cereals off the shelves of around 150 Big Bazaars.  

“Private Brands, apart from allowing retailers to differentiate their merchandise which over a period of time creates consumer loyalty to the store, make more margins than national brands,” said Devendra Chawla, business head, private brand, at Future Group. “It also helps in growing consumption and expanding category size as India is under-branded and under-penetrated in many categories.” 

Future Group, in the last one year has launched three new brands across a dozen categories. With modern retailers contributing just 6-7% to the total sales of consumer goods companies, their overall margins aren’t getting impacted drastically. But in the last few years, consumer goods companies have been aggressively trying to channel most of their resources into nascent segments like deodorants, diapers and ready-to-eat products that they feel have huge potential.

GCPL board approves merger of GHPL.

“The merger of GHPL with GCPL is an important milestone in our aspiration towards becoming a leading emerging markets FMCG company,” GCPL chairman Adi Godrej said in a statement. 

 

The company said the merger subsequent to GCPL’s acquisition of 51% stake in Godrej Sara Lee (GSLL) from erstwhile partner Sara Lee Corp, will be applicable with retrospective effective from 1 April, 2010. 

The merger will provide us with significant strategic and operational benefits. Both GCPL and GHPL have delivered outstanding performance and we believe that the merger provides us with a scale platform to accelerate our growth and profit trajectory,” Godrej said.  
      
       ccording to analysts, the integration of the two firms will help in bringing more synergies in terms of its distribution and marketing.

“There has been synergy already between the two firms, it will be higher now whether in their distribution channel or marketing,” an analyst with Angel Broking said.
           They will have a bigger basket of products to offer. Besides, there might be certain things, which were overlapping. It will help in overcoming that and help in cost saving, he added.

 

Nirma to de-list for flexibility

         Detergent manufacturer-turned-retail operator, Ahmedabad based Nirma, has decided to de-list its shares from Bombay Stock Exchange and National Stock Exchange. 

Add caption

The move is expected to give the management of Nirma, which started with soaps and detergents before diversifying into chemicals,cement ,retail and real estate greater flexibility in operations . The company said in a statement that it will acquire 3.63 crore of its shares not held by promoters, at an offer price of Rs 235 each, a premium of 19 per cent on the average price for the last 26 weeks.

The Board of Directors gave the nod for the proposal on Saturday.

"The promoters believe the profile of the business of the company is likely to further change towards entering into select early stage and capital intensive businesses and the nature and risk profile of these businesses may not be easily understood by and appropriate for non-promoter investors," the company announcement said.

"Such new businesses may also have long gestation periods which are normally not acceptable to public market investors." the company said in the statement. "Therefore, the company is of the view that the next phase of the company's life cycle can be better managed as an unlisted company."

The promoters hold 77.17 per cent of the paid up equity share capital of the company.

Shares of Nirma closed at Rs 224.5, up 3.6 per cent, on Bombay Stock Exchange on Friday 

FMCG brands increase online ad expenditure

   FMCG companies significantly increased their online adspend in the first half of 2010, accounting for £240m of the £2bn spent on the medium between January and June. 
   
    Brands in the sector, which have not significantly invested in the platform in the past, now account for 11.8% of UK online adspend, up from 9.4% last year, according to research from the Internet Advertising Bureau (IAB) and PricewaterhouseCoopers (PwC).

Marketers invested almost £2bn online between January and June this year, equating to a 10% increase on the same period in 2009.

Online now accounts for 24.3% of total UK advertising expenditure.

• The 10% year-on-year growth rate is a marked improvement on the 4.6% increase recorded in the first half of 2009, when the recession was in full swing.

•   In the first half of 2010, search marketing accounted for £1.2bn, or 60%, of the total spent on online advertising.
• 
  
• Paid-search grew by 8.9%, while spending on display ads increased by 6.4% to £381m. The majority of the latter was devoted to embedded formats such as banner ads.

• The total spent on digital advertising by FMCG brands was surpassed only by the expenditure of the media, entertainment and finance sectors.

• Media and entertainment brands contributed 14.4% of total spending online, compared with 13.2% for the same period last year.
• Finance brands, meanwhile, lowered their online adspend and accounted for 13.3% of the total, compared with 14.9% for the first half of last year.
• Jon Ingall, managing director, AIS, said: "Display advertising is getting smarter and, because it can be priced and tailored live, it is now a far more powerful tool than it used to be."
• He cited recent campaigns by Old Spice and Marmite as evidence of established brands directing their advertising online in an attempt to attract new audiences.
• Brands spent £20.7m on pre- and post-roll video advertising in the first half on 2010, an 82% rise on the same period last year. This form of advertising is predicted to continue to grow, if web-based TV initiatives such as YouView and Google TV lure adspend.

• Guy Phillipson, chief executive of the IAB, said: "FMCG brands have taken time to understand the evolution of online advertising, but they are now engaging with the relevant platforms.

• "It was tough for advertisers last year, but they have learned a lot and, now that advertising budgets have returned, it is good to see double-digit growth in online adspend, ahead of overall advertising." 

FMCG sector to grow over 50% by 2010

 

      Fast Moving Consumer Goods (FMCG) sector will witness more than 50 percent growth in rural and semi-urban India by 2010, according to an analysis carried out by the Associated Chambers of Commerce and Industry of India (Assocham). 

In totality, it is projected to grow at a CAGR (compounded annual growth rate) of 10 percent and increase its market size to $22.72 billion from the present level of $10.2 billion. 

The growing penchant of rural and semi-urban folks for FMCG products will be mainly responsible for this development, as manufacturers will have to deepen their concentration for higher sales volumes. 

In the rural and semi-urban areas, FMCG market penetration is currently less than 1 percent in general as against its total growth rate of about 6.2 percent, the President of Assocham, Mahendra K. Sanghi, said while releasing the analysis. 

The analysis is based on the feedback obtained from various district industry centers all over the country on the future demand-supply situation of FMCG products. 

Sanghi said the Indian rural market with its vast size and demand base offered a huge opportunity that FMCG companies cannot afford to ignore. With 128 million households, the rural population is nearly three times the urban. 

Though the rural and semi-urban demand of FMCG products will grow, it will put a severe pressure on the margins of manufacturers of FMCG products due to cutthroat competition, finds the analysis. Companies in the sector to benefit will include known names such as Nirma, HLL, Dabur, ITC, Godrej, Britannia, Coca-Cola, Pepsi, among others. 

The chamber is of the view that the rural market may be alluring but it is not without problems such as low per capita disposable incomes and large number of daily wage earners. 

Some of the other problems associated with rural markets are acute dependence on the vagaries of the monsoon, seasonal consumption linked to harvests, festivals and special occasions, poor roads and power problems. 

The other difficulty that FMCG companies are likely to face is that of logistics. India's 627,000 villages are spread over 3.2 million sq km. Delivering products to the 750 million Indians living in rural areas will be a tough task. 

Lilliput forays into baby care

              Lilliput has forayed into baby care markerts with offerings ranging from shampoo, powder, oil to wipes and laundry liquids. The baby range starts from Rs 95. Mr. Sanjeev Narula, Managing Director, Lilliput Kidswear Ltd, said, “ Rise in disposable income level, superior product availability and increasing awareness have significantly revolutionized the baby care products industry landscape.


            This compelled us to foray into the baby care industry with the launch of Lilliput Baby Care products”. The products will be available in all Lilliput and Lilliput World Stores and soon in leading baby shops, departmental stores and pharma chain . 

ITC launches anti-hairfall shampoo

     ITC has launched an anti-hairfall shampoo and conditioner under the Fiama Di Wills brand in Tamil Nadu. Speaking at the launch, Mr Atul Joshi, Head (Marketing), Personal Care Products, ITC, said Tamil Nadu is a very large premium shampoo market, which is why it was chosen as the launchpad. 

       

        The shampoo is priced Rs 115 for 200 ml and Rs 59 for 100 ml. The conditioner is priced Rs 60 for 90 ml and Rs 40 for 50 ml. Brand ambassador and actor Deepika Padukone launched the products. 

Ravi Kishan to endorse four FMCG giants

          Ravi Kishan, started his 'filmi career' in Bollywood with the Kajol-starrer filmUdhar Ki Zindagi. Since then, he has done a number of films in Bollywood over the years, but it was the Bhojpuri film industry where Ravi became not just a star, but a superstar! 

         Well, even in mainstream Hindi films, he has done movies that have earned him his place under the Bollywood sun. And now it seems that Ravi is all set to give the Bollywood brand ambassadors a run for their money, as he has been chosen as the brand ambassador for not just one, but four FMCG giants! The brands which have signed him as the brand ambassador include Dabur Chyawanprash, Airtel, Parle Monaco and Marico Thanda Tel. 
         This man surely seems to have all the 'Luck' in the world. We are sure that Ravi Kishan will surely agree with us! 

 

Analyst View: Accumulate Marico: Angel Broking

Angel Broking has suggested Accumulate Call for FMCG major Marico. The company has a market capital of Rs 7988 crore. With a 52-week high of Rs 136, the stock is trading near its yearly highs.

Angel Broking has given the volume growth in hair oil and cooking oil as a major driving factor for the strong future growth at Marico.

The coconut oil brand of Marico, Parachute is expected to grow at 7-8% in terms of volume. As the price has been strong in the recent times, the company is expected to register better margins. 

Marico Gets Hold Of Health Care Brand ‘Ingwe

    Marico Ltd has announced that it has got hold of healthcare brand named 'Ingwe' from South Africa's Guideline Trading.  However, the country's fast moving consumer goods and personal care major has not revealed the sum of investment involved in the acquirement.

Over-the-counter healthcare brand Ingwe has a revenue of Rs 150 million and its array of products consists of immuno boosters. 

 Marico, which possesses hair and health care brands like Caivil, Black Chic and Hercules, forayed into the South African market in the year 2007.

        In a statement, John Mason, managing director, Marico, South Africa, stated, "Ingwe complements the Hercules range. I am confident this acquisition will strengthen our distribution reach and step up our growth momentum." 

     This is Marico's second purchase in the South African market and the seventh internationally since 2005.

As per the company's declaration, Marico's South African business registered a 34% increase during the last financial year (2009-10), with the total biz size being `63.8 crore.