Emami takes hit in key portfolio, to focus on health, hygiene and wellness

Despite a good summer, which ideally would have boosted the company's revenues in the summer portfolio, Emami saw a decline in demand with the consumer preferring to spend on essentials instead

Hit by a consumption slowdown in its key products, mainly in the summer portfolio, Emami is focusing on launching more products under the health, hygiene and wellness categories.

Despite a good summer, which ideally would have boosted the company's revenues in the summer portfolio, Emami saw a decline in demand for its products, with the consumer preferring to spend on essential items like food and groceries. This is despite Emami signing in Salman Khan to promote its portfolio leader Navratna hair oil and subsequently launching an aggressive advertisement campaign.

In a regulatory filing with the BSE, Emami said, "Even before the implementation of the nation-wide lockdown, restrictions on movement by various states affected the supply chain from mid-March. Operations until the first fortnight of April witnessed significant disruptions in the business and operations of the company affecting the pre-season sale of the company's summer products.”

The company said a decline in consumption was also witnessed because of the rising unemployment and a significant drop in demand from low-income groups. This led to a consumer shift towards more essential products such as food and groceries, affecting the sale of niche and discretionary products manufactured by the company.

With the renewed consumer focus on health and wellness products, Emami had launched hand sanitiser and aloe vera gel under the BoroPlus brand to grab the opportunities in the health and personal care category, which is becoming a strong portfolio for most of the FMCG players.

“The company has already forayed into the hygiene category by launching BoroPlus Advanced Anti-Germ Hand Sanitizer and is poised to launch more products in the health, hygiene and wellness categories,” Emami said.

According to the company, owing to the pandemic, there is a strong demand for healthcare and hygiene products. “The company’s healthcare range has been witnessing a steady demand for its immunity boosting products. The discretionary and personal care products are also slowly witnessing a recovery in demand,” Emammi said.

During the first half of any financial year, Emami makes up for 45-46 per cent of its annual revenue that coincides with the performance of its summer portfolio. This portfolio includes its Rs 1,000 crore Navratna brand in the cool oils category and the deodorants under the He brand. Other brands like the Kesh King hair oil, BoroPlus antiseptic cream, male grooming under the Fair and Handsome brand and pain management products led by the Zandu brand are other key revenue contributors.

"The company believes that the lockdown would impact the company's business in QIFY21 and operations are expected to normalise Q2FY21 onwards. It is difficult to assess the financial/non-financial impact on near term. The company will evaluate the impact as situation evolves," Emami said.

Other companies have also agreed to a lessening of discretionary spends with the consumer preference skewed towards essential items, including food and groceries and health and wellness products.

ITC had also directed its manufacturing focus entirely on the essentials category like sanitisers and food products while its cigarette business came to a halt. It was only in May that the company resumed production of cigarettes and other non-essential items.

As compared to its peers like ITC, Dabur, Marico, HUL and others, Emami does not have edibles and food category in its portfolio.