Dabur India: Driving Growth On the Back Of New Strategies

In its annual report, Dabur India stated that five additional brands, which include Honitus, Real Drinks, Odomos and Dabur Herb’l, crossed sales of over INR 100 crore. Recently, Dabur’s full-year 2022-23 consolidated revenue crossed the INR 11,000 crore mark backed by the strong execution of the Power Brand strategy. The company is also rapidly increasing its direct to customer business.

In a letter to shareholders, Mohit Burman, chairman, Dabur India, said that the company now has 17 brands that are above INR 100 crore but lesser than INR 500 crore in size; two brands that are over INR 500 crore but less than INR 1,000 crore in size, and another four brands that have a turnover of more than INR 1,000 crore.

With reduced prices for most of its commodities, the FMCG major expects to see expansion in gross margins in the current fiscal. The company’s annual report said that this expanded gross margin will be allocated in two ways. One portion will be allocated towards advertising and promotion investments and the remaining portion will contribute to the gradual improvement of the company’s operating margin. Dabur has made an entry into the spices category with the acquisition of 51 per cent shareholding of Badshah Masala Pvt Ltd, and this acquisition is in line with Dabur’s strategic intent to expand its foods business to INR 500 crore in three years.

Category growths

Dabur’s full-year 2022-23 consolidated revenue crossed the INR 11,000 crore mark to end the year at INR 11,529.9 crore. Dabur’s Consolidated revenue for the fourth quarter of 2022-23 reported a 6.4 per cent jump to INR 2,677.8 crore.

The strong execution of the Power Brand strategy coupled with distribution footprint enhancement helped Dabur India Ltd report a steady performance during the fourth quarter and the full year. Riding on strong demand, Dabur’s Oral Care penetration has now increased to 50.8 per cent. Also, the company in the Oral Care segment has a 15.8 per cent market share.

In the Hair Oils market, its strategy of supporting core brands with flanker brands to entice value-seeking consumers, paid off and the Hair Oils business reported a 130bps gain in market share to end at its highest-ever share of 17 per cent.

Dabur’s Food & Beverages business reported a 30 per cent growth during the year with its Juices & Beverages business also growing at around 30 per cent. The Home Care business, riding on strong performance of air fresheners, ended the year with a 23.4 per cent growth. The Digestives business ended up 10.4 per cent during the year, while the Shampoo portfolio ended up 8per cent. The healthcare business, which is navigating the high COVID bases, registered a 3-year CAGR of around 10 per cent.

“Our performance in a tough inflationary environment aptly demonstrates the power and consistency of Dabur’s strategic playbook, which helped us capitalize on our brand strength while continuing to innovate and deepen our engagement with our consumers. In an environment where high Inflation continued to impact consumption, we are happy to have progressed well with broad-based growth in our key categories and report market share gains across our product portfolio,” said Mohit Malhotra, CEO, Dabur India.

“Despite the near-term concerns around inflationary pressures, we plan to accelerate the growth momentum by continuing to invest in brand building, innovation, and capabilities that will drive future growth. Our journey to sustainable growth is well on track as we focus on building a stronger, more dynamic business, with a renewed sense of purpose,” he added.

D2C Channel

Dabur has soft-launched its own D2C channel called DaburShop. “DaburShop has recently been launched with a limited assortment of products and we are working on progressively increasing the range available here. Our intent is to provide consumers access to the entire Dabur range of products, including our range of Ayurvedic medicines. This will become a one-stop shop of the entire Dabur range, including our Ayurvedic medicines portfolio that’s not easily available on the e-commerce marketplace,” said Malhotra.

DaburShop will be used as a platform for special digitally curated or digital first brands and products that would be launched from the House of Dabur.

Dabur today has one of the highest penetrations in the FMCG industry in India with its products reaching 6.9 million retail outlets across the country. Our intent is to further deepen this coverage. “With DaburShop, we can today deliver to almost 85-90 per cent of pin codes within 24-72 hours and we are working on progressively increasing its coverage across towns,” the CEO added.