Expects consumption uptick in FY25; power brand to drive growth: Dabur Chairman

FMCG maker Dabur India is optimistic of a gradual uptick in consumption this fiscal and expects its power brands to drive growth as it expands deeper into the hinterland, its chairman Mohit Burman has said.

Dabur expects an improvement in rural consumption, where it will continue to expand its footprint, while for urban markets, it will increase play by adding more premium offerings and entering into adjacent categories, according to the latest annual report of the company.

"We are optimistic of a gradual uptick in consumption trends over the course of the next year, considering predictions of a normal monsoon, improving macroeconomic indicators, continued government spending on infrastructure building, and lower inflation," Burman said while addressing the shareholders of the company.

The company is "confident" about the resilience of its business strategy. It expects its power brands to continue to drive growth as it expands its reach deeper, increasing its total addressable market.

The 2023-24 fiscal saw a slowdown in consumption led by rural demand, which was impacted by high food inflation and erratic rainfall.

Dabur's portfolio currently includes nine distinct power brands, eight in India and one in the overseas markets, which together account for around 70 per cent of its total sales.

As part of its growth strategy, Dabur is also focusing on new-age channels like Quick Commerce, besides traditional channels.

"There has also been the emergence of Quick Commerce as a robust channel, which has seen exponential growth. We foresee Q-Commerce to become more significant going forward and are putting in place strategies to capture the opportunities thrown up by this channel," said Dabur India CEO Mohit Malhotra.

Over the rural market, Malhotra said the continued focus of the current government on infrastructure development, support to rural incomes and expectation of a normal monsoon bode well for a recovery.

"We are optimistic that rural consumption will improve during the current year, although this may be more visible in the second half of the year," he noted.

Currently, Dabur's 75 per cent business comes from the domestic business. Its domestic business is concentrated in eight power brands - Dabur Chyawanprash, Dabur Honey, Dabur Honitus, Dabur PudinHara, Dabur Lal Tail, Dabur Amla, Dabur Red Paste, Real.

Vatika is Dabur's International Power Brand offering a range of Personal Care products for the global audience.

Four of its Power Brands -- Dabur Chyawanprash, Dabur Honey, Dabur Red Toothpaste and Real juices -- account for 50 per cent of its consolidated revenue and 58 per cent of total production.

Now, 20 of Dabur's brands are part of the billion-rupee turnover Club, the report said.

Its four brands - Dabur Glucose, Dabur Sarson Amla Hair Oil, Hobby and Dabur Hajmola - are in the range of Rs 250 crore to Rs 500 crore.

Brands like Odonil, Dabur Chyawanprash, ORS and Dabur Honey are between Rs 500 crore to Rs 1,000 crore.

While brand as Real, Dabur Red Toothpaste, Dabur Vatika and Dabur Amla have a turnover of more than Rs 1,000 crore.

Dabur currently has a portfolio of over 400 products and over 1,000 SKUs.

For the financial year ended Mar 31, Dabur India's revenue from operations was Rs 12,404 crore.