Eveready eyes new FMCG categories

The largest maker of dry-cell batteries in the country will loko at acquisitions as a mean to make inroads into new categories

Battery maker Eveready Industries Ltd, which closed FY13 with sales of Rs 1,035 crore, is looking at new categories in consumer goods to expand its portfolio of products. Besides batteries that give the Kolkata-based company half of its revenues, it has a presence in flashlights, lanterns and packaged tea at the moment.

"We will look at diversification in about 18 to 20 months. The route to achieve it would be acquisitions. At the moment, however, we propose to devote our attention to the existing business and what we can do here," says Amritanshu Khaitan, director, Eveready. Khaitan now manages the day-to-day operations of the company after taking over from his father Deepak Khaitan two years ago. The plan includes expanding the battery portfolio into emerging areas such as the alkaline segment, dominated by players like Procter and Gamble's Duracell, which advertises the product heavily using the icon of the popular pink bunny. Eveready, on the other hand, controls over 50 per cent of the regular carbon-zinc battery market in India, the rivals being Nippo and Panasonic, respectively.

While the west is a largely alkaline market, thanks to high-tech devices used by consumers there, India remains mainly carbon-zinc with the market pegged at 2.4 billion units. Alkaline, in contrast, is a fraction of that at about 60 to 70 million units, but growing at a clip of about 20 to 25 per cent per annum. Carbon-zinc, meanwhile, is growing at about three to four per cent only, say market experts.

To counter P&G, Eveready has just launched the Ultima range of alkaline batteries, priced at Rs 20 a piece. Duracell is available for Rs 25 a piece. Eveready had been test-marketing this product for some time and claims the product is the strongest in the category.

Experts say Eveready is now taking the fight for domination of the alkaline battery segment to P&G's doorstep with the new range that will be endorsed by actor Akshay Kumar. This fight acquires significance given the preference for high-tech gadgets and devices by urban Indians today. The market for alkaline batteries is slated to cross the 100-million-mark in about two to three years.

Parallely, the company also proposes to beef up its lighting portfolio with new products in the rechargable lighting and LED spaces, as well as step into the arena of portable chargers for smart phones. Eveready is also taking up its direct distribution reach to over 1 million outlets from 900,000 now and proposes to step on the gas as far as advertising and marketing is concerned in the next few months. "Beginning now up until December this year, we will launch new products in batteries and lighting," Khaitan said.

The company, which imports 50 per cent of its raw materials from abroad, recently increased prices by five to seven per cent in its battery portfolio in a bid to minimise the impact of the rupee depreciation, which has fluctuated against the dollar. The currency closed on Thursday at Rs 57 to a dollar. Khaitan says the company may look at a second round of price hikes this financial year if the rupee breaches the Rs 58-mark.