By A Correspondent
VML India has been named the digital creative agency of record (AoR) for Marico’s Parachute Advansed hair oil portfolio. The mandate won includes digital activation for the brands in the Parachute Advansed hair oil portfolio.
Said Udit Bhambri, Head of VML India :“To be able to work with a brand like Parachute Advanased is an honour. We very much look forward to partnering the brand with our digital expertise, to drive both consumer share of mind and wallet.â€
By A Correspondent
Marico has released a new campaign for its recently launched Parachute Advansed Men. The brand promises hair nourishment as well as styling, notes a communique.
Commenting on the product range, Anuradha Aggarwal, Chief Marketing Officer, Marico Limited said: “Styling for men is a highly underpenetrated category, with a huge segment of consumers using water/oil for grooming and nourishment post wash. Having recognised this gap and marrying it to Marico’s larger focus on the male grooming sector, we have launched Parachute Advansed Men which truly celebrates manhood and shows them in a good light.â€
Added Kainaz Karmakar, ECD Ogilvy: “Parachute has been a hugely trusted brand synonymous with hair care amongst women for several decades now. The task was to carve a distinct niche for Parachute Advansed Men and make it stand apart from the mother brand. This is where a relevant, memorable and ownable space mattered. ‘Good men deserve to look good’ is precisely such a space. It allows us a long term platform for the brand to stand for a belief, and yet remain connected to the product benefit of ‘Goodness for hair, inside-outâ€.
Said Harshad Rajadhyaksha, ECD Ogilvy: says, “Once this unique central idea of ‘inner goodness complemented by great grooming’ was worked out, an equally important task was bringing it all to life. We are confident that the work will resonate well with the men it is targeting, and help this young brand grow from strength to strength.â€
By A Correspondent
Marico has announced Bollywood heartthrob, Ranveer Singh as the new face and brand ambassador of Set Wet deodorants.  Set Wet, a brand synonymous with hair gels in India, had undergone a successful repositioning last year with the Sada Sexy Raho campaign. Following the success of the initiative, Marico has announced the signing of Ranveer Singh as the brand ambassador for the Set Wet deodorant portfolio who will now further drive the philosophy of ‘Sada Sexy Raho’.
Anuradha Aggarwal, Chief Marketing Officer, Marico Limited said, “We are delighted to have Ranveer Singh as the face of our Set Wet range of deodorant range.
Apart from being probably the most popular star in the brand target consumer, Ranveer also happens to live the brand philosophy of Sada Sexy Raho. Brand Set Wet extolls young men to give up inhibitions & let their charm & passion show in everything they do – a philosophy Ranveer himself lives by. I think Ranveer & Set Wet are a potent mix with which we can create magic.â€
By A Correspondent
20:20 MSL has announced a series of new business wins across India. Teams from 20:20 MSL across Delhi, Mumbai, Bangalore, Pune, Chennai & Hyderabad collectively won 24 new business pitches over the past two quarters, demonstrating its creative and strategic leadership in delivering insight based integrated approach deigned to generate business impact for clients.
Commenting on the new business wins, Chetan Mahajan, Managing Director, 20:20 MSL & Co Managing Director MSLGROUP India, said: “Today brands need a strategic partner who can co-create and deliver effective result oriented campaigns. The investments we made in building integrated capabilities over the last couple of years have started to pay off. This, alongside our focus on building capabilities in research and insights makes us more relevant than ever, and the series of new wins stand as a testimony that more and more clients trust us to help them stay ahead of the curveâ€
The wins include handling brands of Marico, Dimension Data, Swift Key, Saavn LLCÂ etc.
By Johnson Napier
Blame it on the late player auctions that were held early this year or the match-fixing allegations that keeps cropping up intermittently or the fact that the General Elections may have taken the hype away from the greatest sporting spectacle coming out of India every year – the IPL. While IPL 6 was already making waves this time last year, the scenario is a little different in Twenty Fourteen with most team-owners still making last ditch attempts in getting their act together including enticing advertisers into partnering them afresh.
But whatever the challenges being presented, the tournament does promise to provide its dose of entertainment this year as well. To begin with, there would be only 60 matches being played this year with the tournament being staged in two phases including one in the UAE from April 16 to May 1 and the India leg that will be staged from May 2nd onwards. In fact broadcaster Multi Screen Media (MSM) is already making its presence felt and has managed to get a decent number of brands to endorse the event this year as well – the same number as IPL 6.
MSM has inked deals with nine presenting and associate sponsors for the seventh season of IPL. The presenting sponsors include Vodafone and Karbonn Mobile who are estimated to have spent approximate Rs 50 crore while the associate sponsors comprise Amazon India, Havells, Perfetti, Marico and TVS all of whom fall under the Rs 25-30 crore cost bracket.
While MSM does seem to have made sufficient inroads with brands, what will eventually decide the success of the tournament is the average viewership ratings that it will throw at the end of the tournament. According to data shared last year, IPL managed to generate an average cumulative TVR of 3.1 in HSM markets and a rating of 3 in C&S 4+ all India. This was much lower than the 3.45 HSM average TVR it reported in 2012.
Sharing his opinion on whether the tournament will live up to its hype or not, Ashish Bhasin, Chairman & CEO South Asia, Dentsu Aegis Network and Chairman Posterscope & psLive Asia Pacific, said: “I think the seventh season of the IPL will build up as the tournament progresses and be near normal towards the final stages. But it will have a slow start, compared to past years,” he affirmed.
Putting forth her views, Anita Nayyar, CEO- India & South Asia, Havas Media Group said, “IPL has always been an interesting event irrespective of the reasons. Across seasons it has delivered well whether in India or South Africa. Especially the last leg towards the finals has always been an advertiser’s delight with ratings upwards of 10.”
On what the current season will hold for the tournament, Ms Nayyar said, “The seventh season is generating a lot of interest inspite of the shift between UAE and India amongst advertisers who do view IPL as a mass reach medium. Moreover, while it is election time the interest in IPL still stands. This is further vindicated by an analysis of viewership of various genres during elections, which indicates that it does not have any major impact on sports (cricket) or GECs, however the Hindi news genre gains share. Given the situation, IPL holds its own and should continue to deliver viewership and hence interest and acceptability from advertisers.”
Perhaps the right indicator of how viewership could be bought back to the sport could be assessed from what Vinit Karnik, National Director, Sports & Live Events, GroupM ESP had to state in the SportzPower-GroupM joint report on the Sports Sponsorship report. Karnik had stated thus: “Even though the IPL is off to a rough start this year, in the long run accountability, better corporate governance, more transparency, are all good for not just the IPL, but the BCCI too.”
Another factor that will decide whether the tournament receives a positive response this year is the buzz that it will create from the online medium. This year, starsports.com has licensed the digital distribution rights for IPL 2014 from Times Internet. Starsports.com thus will be streaming video on demand on its portal and would not be played on Youtube like last year. With an aim to attract 20 million more users onto the digital platform, starsports.com will be looking at bettering the 2013 viewership numbers that were reported to be in the region of 200 million video views.
Thus, with the countdown to the greatest cricket spectacle only a few hours away, one can look forward to an average outing from the team and brands at the IPL this year. One only hopes that the match-fixing allegations do not make their presence felt yet again or the organisers will have to face additional bottlenecks next year as well. And possibly no ‘bulawa’ as well.
By A Correspondent
Following a multi-agency pitch, Tribal DDB India has won the digital mandate for Marico’s Set Wet Hair Gels. The Set Wet range of products comprises deodorants, hair styling products such as hair cream and hair gels and spray talc.
On winning the account, Venkat Mallik, President, Tribal DDB & Rapp India, said, “Its fantastic to get to work with the team at Marico. SetWet operates in highly cluttered categories and it’s important to create an exciting and clutter breaking creative solution. We are eagerly looking forward to launch a series of break through digital initiatives and creative units.”
For the record, Tribal DDB India’s clients include Emirates, Kimberley Clark, McDonald’s, Star TV and Livon among others.
By A Correspondent
DDB Mudra Delhi has added Marico’s Livon brand to its slew of accounts. The size of the account is pegged at Rs 40 crore. The incumbent on the account ‘Cut the Crap’ had been working on the brand before Marico acquired the brand from Reckitt Benckiser earlier this year. DDB Mudra Group won this mandate after a rigorous multi-agency evaluation process.
Sonal Dabral, Chairman & CCO, DDB Mudra Group, said, “Livon presents us with a wonderful opportunity to take the DDB ideology of social creativity forward. A brand that talks to audiences that live in a connected world, we look forward to creating ideas that have an inherent ‘talk value’ that drives the brand forward. Besides, with Marico, we are really excited about partnering with one of the most professional Indian multinationals.”
Commenting on this big win, Vandana Das, President, DDB Mudra Group, Delhi, says, “It’s a great starting point and very encouraging for all of us to be associated with a brand from Marico’s stable. Having won Livon, we are all really delighted and geared to have a long innings together. We look forward to doing some path-breaking and exciting work on the business in months ahead.”
By Sagar Malviya & Ratna Bhushan
Market research firm Nielsen and India’s consumer goods companies are in sharp disagreement over growth rates in the sector. In the April-June quarter of 2012, sales growth in value terms of some of India’s biggest fast-moving consumer goods companies is higher than Nielsen’s growth estimate for the overall FMCG market, raising concerns over the world’s largest research firm’s accuracy in India.
Seven listed domestic companies, which control over 70 per cent of the FMCG market, have posted an average value sales growth of 19.28 per cent in the first quarter of fiscal 2013. A Nielsen spokesperson says their figure for this period is 17.6 per cent. Even in categories such as soaps, juices, oral care and hair oils, leading players, which contribute between 60 per cent and 75 per cent to each segment, have posted much higher volume growth than what Nielsen’s data suggests. When contacted, Nielsen did not validate the numbers that ET has obtained from the research firm’s FMCG clients.
For instance, Godrej Consumer Products Ltd saw a 24 per cent spurt in soap volumes even as Nielsen estimates growth for the overall segment at a sombre 5 per cent in the April-June quarter. “There is a bit of under-reporting by Nielsen. The issue lies with its statistical method,” said Adi Godrej, chairman of Godrej Group.
“We generally use Nielsen’s data for market share as there isn’t any other option for us. However, for category growth, we rely on our sales numbers and listed companies’ performance,” said Vineet Agrawal, president at Wipro Consumer Care & Lighting, which saw a 15 per cent jump in volume growth in soaps in the first quarter of the fiscal year.
It’s a similar story in toothpastes, a category that grew 9 per cent in volumes according to Nielsen; however, this doesn’t tally with internal sales data of Colgate and Hindustan Unilever Ltd (HUL), which together command roughly 80 per cent of the market. Colgate saw a 13 per cent rise in volume growth. For HUL also it was higher, said CFO R Sridhar at a recent financial results’ presentation.
In packaged juices, Nielsen says the category grew 18-19 per cent in the April-June quarter in value terms and that Dabur grew 24 per cent. But Dabur’s quarterly sales numbers show its juice business grew 34 per cent. Dabur leads the packaged juices market with the Real brand, which accounts for more than half of all juices sold.
Dabur CEO Sunil Duggal said: “Our quarterly growth numbers are generally ahead of what Nielsen reports. So we prefer to study Nielsen numbers as a longer-term trend – over a 12-month period – because that evens out errors.”
Nielsen counters that the retail audit cannot be compared with sales numbers that companies report. A Nielsen spokesperson said: “The retail audit is focused on sales offtake through a sample of retail stores that tracks sales to the end consumer. It is technically incorrect to compare it to the financial results of companies, which report sales to distribution channels.” The research firm also said sales reported by companies may include those beyond retail stores from institutions such as army canteens, restaurants and transport hubs, which are outside the scope of its retail audit.
An FMCG analyst points out on condition of anonymity that ignoring the Canteen Services Department (CSD), which caters to the Indian defence services, may be one explanation for the discrepancies.
After all, CSD can easily qualify as India’s largest retailer with some 3,500 outlets across the country. Nielsen is no stranger to controversy on the market share front. In May 2009, HUL disputed the researcher’s data that showed a steady fall in the company’s market share across segments, saying it contradicted internal estimates as well as data from household research firm IMRB. The issue snowballed into a crisis when Dabur, Godrej and Marico echoed similar doubts over Nielsen data. Dabur and Perfetti Van Melle even went so far as to cancel Nielsen’s subscriptions in categories such as hair oils, juices, candies and confectionery.
A year ago, Unilever CEO Paul Polman questioned the accuracy of Nielsen’s data for India, underlining that the country’s largest consumer product maker was still unhappy with the market researcher two years after first raising the issue. “I know you all like to write about it. But they (Nielsen) are not very accurate with what their numbers are,” Mr Polman had said while commenting on the performance of Unilever’s Indian arm.
Nielsen has increased its sampling size to 22,000 outlets from 16,000 over the past three years, included more modern trade outlets and uncovered channels in rural markets, prompting some companies to be optimistic about the research firm’s data. “We are worried, but the fact remains that at least it is not deteriorating. They have been changing panels and we have to pick up points where there are issues and work with them on it,” said Saugata Gupta, CEO of Marico, which saw its hair oil business grow over 15 per cent in volumes while Nielsen’s data shows a growth of 4.7 per cent for the category.
Also, companies are now slightly at ease after Nielsen decided not to share data with market analysts and investors who depend on the data to track the performance of consumer product companies and rate the stock accordingly. “While we are glad that analysts can’t access the data easily, even we have stopped taking the research seriously and rely on it just for trends. Nielsen’s numbers is not a bible to us,” said a CEO of a leading homegrown consumer firm who didn’t wish to be identified.
Source: The Economic Times
Copyright © 2012, Bennett, Coleman & Co. Ltd. All Rights Reserved
By Ratna Bhushan & Sagar Malviya
Consumer goods companies are busy firming up contingency plans to stem any decline in volume sales in case a deficit in monsoon rainfall hit crop yields, escalate food prices and impact consumer spend.
Companies such as Dabur and Parle Products said they will delay price increases, emphasise on low-priced packs of Rs2, 5 and 10, explore new value price points and step up promotions to prevent possible downtrading, or consumers switching to cheaper products, in case of a crisis.
“If there’s a monsoon deficit, we would obviously look at protecting volumes,” said Sunil Duggal, CEO of Dabur, which makes Vatika shampoo and Babool toothpaste.
“Contingency plans could include a combination of things like putting off price increases, accelerating focus on smaller packs and allocating more spends on consumer promotions, depending on where the deficit is,” he added.
BK Rao, general manager at top biscuits maker Parle Products said the maker of Parle-G, Monaco and Hide & Seek biscuits will focus on smaller price points if the situation is bad.
The monsoon has revived significantly in the past week to reduce total deficit in the country so far to 22 per cent from 31 per cent and accelerated crop planting. But crop yields may still be lower as rainfall has been uneven, with some regions, including parts of Karnataka and Maharashtra, remaining practically dry for three weeks. Economists warn that food prices may rise sharply if rainfall weakens again.
FMCG companies have been bucking the overall slowdown in the economy and posting an average 15 per cent growth, but a weak monsoon could change it.
“A weak monsoon will naturally reflect on costs and we will have to work around that. The industry will feel the impact around September-October,” said Chitranjan Dar, divisional chief executive of tobacco-to-chips maker ITC Foods.
While impact of inflation on the premium urban rich is not very significant, mid-rung and rural demand is strongly linked to the monsoons. Thus, top FMCG firm Hindustan Unilever, Dabur and biscuit maker Britannia, which have large rural presence, could be hurt more than Nestle and GlaxoSmithKline Consumer, which have an urban focus for their products, say experts.
Analysts say consumer goods companies tend to push ‘magic price points’ of Rs2, 3, 5 and 10 in an inflationary scenario to minimise any negative impact on discretionary spends. Such low-unit packs account for over 25-30 per cent sales of makers of shampoos, hair dyes, biscuits and snack foods.
Also, with local competition always posing a threat, established players would have to step up volume discounts and consumer promotions in a weak monsoon scenario. A significant 70 per cent of low unit packs are sold through kirana shops (mom and pop stores).
“Small SKUs and distribution expansion may save the day. Downtrading too would be arrested at the small-pack level,” Shirish Pardeshi, executive director and co-head, research, at financial services firm Anand Rathi Securities, wrote in an investor note two weeks back. “Rural expansion of distribution (for example, HUL’s Project Shakti and Emami’s Swadesh initiatives – both aimed at accelerating expansion in rural markets) would help arrest drop in consumption,” the note said.
Some analysts, however, believe the impact of a weak monsoon will be limited on rural consumption because dependence on agricultural income has been declining. “Our discussions with rural trade and consumers have always highlighted that one bad monsoon does not result in consumption declining. Instead, it leads to trade credit terms becoming more onerous in rural India,” Ambit Capital’s Anand Mour wrote in a report.
Some companies such as Marico, maker of Saffola edible oil, say they would wait for some more time before start worrying about monsoon. “The June-July period is too early to take any decision. We will have to wait for August to check the monsoon trend and get a clearer picture,” said Marico CEO Saugata Gupta.
Source: The Economic Times
Copyright © 2012, Bennett, Coleman & Co. Ltd. All Rights Reserved
By A Correspondent
India’s fast-moving consumer goods, or the FMCG sector, has been able to weather the impact of an economic slowdown and rising input costs yet another quarter, as firms led by HUL beat street expectations both on top line and bottom line growth.
A study of the aggregate financial performance of the leading 10 FMCG companies over the past eight quarters shows that the industry has grown at an average 16-21 per cent in the past two years with average operating margins being 22 per cent.
Very few other industries can boast of having such a performance track record. “The consumer sector typically is the last and the least to suffer during a slowdown,” said Manoj Menon, senior analyst at Kotak Institutional Equities.
Most companies are reaping the benefits of the direct distribution expansion mostly in rural India. HUL, for instance, has tripled its rural penetration in the last couple of years. Sales from modern trade have also been a strong growth driver for companies. Marico has posted a growth of over 45 per cent in revenues from its rural and modern trade businesses during FY12.
The quarter to March performance of FMCG companies like HUL, Dabur, Godrej Consumer Products, Marico, Asian Paints, GSK Consumer Healthcare, Procter &Â Gamble Hygiene and Healthcare and Jubilant Foodworks is also a reflection of consumption-driven growth.
Half of HUL’s 20 per cent revenue growth during the March quarter was volume driven. Dabur’s domestic sales rose 19.2 per cent with volumes rising 9.5 per cent. Godrej Consumer Products logged 30 per cent sales in soaps in India – 17 per cent of which was volume-driven. Asian Paints registered 29 per cent growth in its revenues from domestic business, of which 15 per cent was volume growth.
The company had raised prices by close to 12 per cent on its portfolio during the quarter. Jubilant Foodworks, owner of the Dominos Pizza franchise in India, reported 26 per cent same store growth, which was almost entirely volume-driven despite the company raising its menu prices by 10 per cent. Marico has been able to achieve a 17 per cent volume growth for the March quarter from a total revenue growth of 23 per cent for the quarter.
GSK Consumer Healthcare registered 14.5 per cent increase in net sales – 7 per cent of which was driven by volume growth and the rest through higher realisations on account of price increases. Nestle was probably the only company to have a largely value-driven revenue growth of 13 per cent during the March quarter.
Exceptional value growth always carries the risk of hurting volumes. Till now, most FMCG companies have been able to perform well while balancing between volume and value growth. “Over the long run, we see consumer demand being resilient,” Nitin Paranjpe, chief executive officer of HUL, had said at the press conference following the company’s results. According to Mr Paranjpe, the secular trend of consumers is towards uptrading rather than downtrading.
“The demand for consumer goods is relatively inelastic compared to that of other products,” explained Milind Sarwate, group chief financial officer, Marico. An earlier ETIG analysis of the growth in revenues and profits of leading FMCG companies revealed that companies registered a much faster growth in revenues and profits during periods of high inflation (in 1994-98 and again from 2006 till date) compared with periods of low inflation (1999-2005).
“During an inflationary period, there is a likely market share gain for organised players from the unorganised regional players,” Mr Menon explained. Larger firms enjoy economies of scale on account of bulk buying and higher pricing power on their reputed brands.
The ET FMCG Index has a price to earnings multiple of 36 against the Sensex P/E of 16.1. Stocks of Godrej Consumer Products and Asian Paints hit a new high ahead of the companies’ result announcements. Stocks of HUL, Marico, Dabur, Glaxosmithkline Consumer Healthcare and Jubilant Foodworks are hovering near record high levels.
However, their current valuations are still lower than their all-time record levels. In case the broader economy is sluggish, analysts fear that the going may not be good for the sector in the coming quarters. “Moderation is very much on the anvil,” cautioned Mr Menon. For now, FMCG companies continue to live up to their reputation of being a defensive investment play.
Source: The Economic Times
Copyright © 2012, Bennett, Coleman & Co. Ltd. All Rights Reserved
By Kala Vijayraghavan & Sagar Malviya
Mumbai-based consumer products Anchor Healthcare has had several rounds of discussions with the Kolkata-headquartered Emami to sell its oral care business, top officials close to the development said.
Kotak Mahindra, the investment banker to the deal had also approached other personal care companies such as Godrej, Dabur and Marico for a potential transaction, added the officials.
However, interest in Anchor’s only other brand outside of oral care, Dyna soap, was lacklustre, with buyers more interested in Anchor White toothpaste, Anchor Gel as well as a toothpowder and toothbrushes. When contacted, Atul Shah, promoter of Anchor, denied any sale plans. However, a senior executive at a domestic investment bank confirmed that the company has been sounding off various buyers.
In early 2011, Business Standard had reported that the Shahs had plans to sell the entire consumer products business, lock, stock and Dyna. However, a banker privy to the proceedings pointed out that valuations of the business may have deterred the promoter family from selling in single transaction.
The Shahs are expecting over Rs1,000 crore for the consumer business, added the banker. The company is estimated to have closed the year ended March 2012 with sales of Rs450-500 crore, said a research analyst covering the fast-moving consumer goods sector.
Emami, for its part, has created a war-chest to fund acquisitions. In 2010, the board of the cosmetics and toiletries marketer had approved plans to raise long-term resources up to Rs2,000 crore through the issue of securities as well as to double the borrowing limit to Rs3,000 crore primarily to fund potential buys.
In 2008, Emami had acquired Zandu Pharmaceuticals, but subsequently hasn’t had much luck with buyout attempts. Last year it lost out to Reckitt Benckiser in the race to buy Paras’ personal care business that includes brands such as Livon, Borosoft and SetWet. Early this year, Reckitt sold some of Paras’ personal brands to Marico in a deal that Emami too was keen on.
“Emami will continue to explore avenues for inorganic growth, but we do not wish to comment on any speculations,” said NH Bhansali, CEO, finance, strategy & business development, Emami.
In 1997, Anchor challenged multinational giants like Colgate and Hindustan Unilever by finding a unique proposition in a tough-to-differentiate category by launching a ‘vegetarian’ toothpaste. In the initial years, Anchor managed to grab a market share of close to 10 per cent in a highly-competitive market.
In 2007, the Anchor group had sold an 80 per cent stake in the business of electricals to Japan’s Matsushita Electric Works – owners of the National and Panasonic brands – for Rs2,000 crore. Personal care became the family’s focus area. Soon after the sale of Anchor Electricals, the group bought Forhans, one of the country’s oldest toothpaste brands, from John Oak Remedies. However, the Shahs didn’t make much headway with Forhans, which does not figure amongst Anchor Healthcare’s brands on its website.
Source: The Economic Times
Copyright © 2012, Bennett, Coleman & Co. Ltd. All Rights Reserved