Marico’s 45% Foods surge is a lesson in going offline

Marico is moving its digital-first portfolio from a growth experiment to a profitability engine. The company expects 4700BC to break even significantly ahead of its earlier target, while two more digital brands are expected to turn profitable within a year, MD and CEO Saugata Gupta told ETRetail.

The shift is not only about numbers. Marico is taking several digital-first brands into general trade—Plix, True Elements and 4700BC are already being tested in the channel. Gupta’s logic is simple: “GT delivers higher margins for us.”

• 4700BC: break-even expected ahead of schedule.
• Two more digital brands: profitability targeted within a year.
• Foods business: 45% growth in Q2FY27, crossing an annualised run rate above Rs 1,500 crore.
• Premium Personal Care: annualised run rate above Rs 500 crore.

The digital business is expected to reach double-digit EBITDA margins and then move towards mid-teens over the next two to three years.

Why offline is the next lever

Digital-first brands tend to hit a ceiling in e-commerce and quick commerce. Moving into general trade widens availability and can improve margins, but the operating model has to change. Assortment, trade marketing, sales incentives and last-mile execution all become critical.

Marico’s answer is Project SETU 2.0, which uses technology, artificial intelligence and assisted selling to make urban general trade more productive. Vietnam is already showing encouraging results, and Bangladesh is at an early stage after a recent rollout, Gupta said.

The company is also working on gamified sales incentives and AI-led assisted selling to improve range selling, outlet productivity and sales-force efficiency. Brand managers should note the sequence: don’t simply push the product offline—redesign the sales system around it.

Fewer, bigger, bolder, faster

Marico does not plan any major category entry for the next two to three years. Instead it is prioritising healthy foods, snacking, breakfast, protein, shampoos, value-added hair oils and serums under what Gupta called “fewer, bigger, bolder and faster.”

The company is using synergies in manufacturing, supply chain, product development and media buying to improve unit economics, then directing those savings into advertising and promotion. In Q2FY27, consolidated revenue rose 13% year-on-year to Rs 3,897 crore and EBITDA grew 27% to Rs 709 crore.

In the core portfolio, Parachute hit a record 60% volume market share after targeted price cuts, though Gupta expects volume growth to normalise to 4-6 per cent. That balance between margins and volume is central to the strategy.

Gupta expects traditional trade, organised retail and quick commerce to coexist. For D2C founders, the neighbourhood shelf may be the next margin lever—if the sales system is rebuilt for it.

Source: ETRetail.com