How Eveready, on the cusp of change, is trying to regain its mojo

Over the past decade, a change in consumer choice swept through the battery industry - the walkman lost its mojo, smartphones overtook cameras and batteries were tucked away in remotes and wall clocks

The world is changing for the country’s largest dry cell battery maker, Eveready Industries India Ltd, inside out.

Over the past decade, a change in consumer choice swept through the battery industry – the walkman lost its mojo, smartphones took over cameras and batteries were tucked away in remotes and wall clocks that hardly needed frequent call-ups.

The result: Brand Eveready lost mind space. And the company’s attempt to stick to the on-ground marketing activities didn’t quite help.

But Eveready, now at the cusp of change, is putting things right – a new Give Me Red television commercial has been launched after a gap of 7 years featuring an empowered bride ski-diving to her wedding venue.

The creative, according to Eveready sources, is in sync with the brand doctrine.

“Give Me Red is not only about the red batteries. It stands for raw power, energy, enthusiasm, an expression of desire to win, the rebel in each and every one – the need to excel in everything,” sources in Eveready pointed out.

When Rediffusion came up with the Give Me Red tagline about thirty years back for the Indian consumer warming up to liberalisation and MTV, these were the very thoughts behind the campaign (the latest creative is also powered by Rediffusion).  

It was a period of transition for the battery industry. The market was shifting from appliances that required the big “D” size battery to “AA” as transistors and brass torches were going out of fashion. The company - then Union Carbide India – was majority held by American company, Union Carbide Corporation.

But in 1993, following one of the worst industrial disasters in Indian corporate history, Brand Eveready came into the Brij Mohan Khaitan-fold when he acquired Union Carbide India, beating the Wadias of Bombay Dyeing in a $96.5 million deal – the biggest corporate takeover in India at the time. And the company was renamed Eveready Industries India Ltd.

However, the Eveready brand has been in existence in India since 1905, and seen many changes in the marketplace. It is still adapting to the latest shift.

“Equipments are getting miniaturised. Usage is now primarily in remotes, wall clocks, toys and torches,” explained company sources. The transition is now from “AA” to “AAA”.

The industry is also grappling with a slowdown in demand that reflected in the latest quarterly numbers. In the quarter ended March 31, Eveready slipped into the red, posting a net loss of Rs 38.41 crore on a consolidated basis dragged by the twin impact of lower demand and increase in input cost. For fiscal FY22, however, the company recorded a profit after tax of Rs 46.5 crore.

But even as battery volumes dropped, sources indicated, the company gained market share by 2.6 per cent in the quarter to reach around 55 per cent.

BRAND EVEREADY

Top-of-mind recall value: 65%

Share of India’s organised flash light market: 70%+

Share in the Indian dry cell battery segment: 50%+

Source: annual report FY21

In the Union Carbide days, Brand Eveready was a near-monopoly. But with newer entrants, the market share started coming down and settled at around 50 per cent and Eveready has held on to it for long.  

Steps have been initiated by the company to come out of loss. De-bottlenecking legacy inefficiencies in the organisation structure and activating cost rationalisation initiatives to offset inflationary impact are among them.

In addition, consultancy firm, Bain & Company is also scripting a strategy to improve operational efficiencies. With these measures, Eveready is hoping to return to a higher level of profitability in 2022-2023.

The operational changes, however, pale compared to the major shake-up taking place with the ownership and management of the company. Existing promoters, Khaitans, have stepped down from the board and divested executive role paving way for a professional at the helm.

The Burman family – promoters of Dabur India – who had been waiting in the wings for over two years with a large stake, has made its intention public to take control and become a promoter.

As a prerequisite, Burman Group entities have proposed an open offer which is awaiting approval from the Securities and Exchange Board of India. As of April 26, the holding of the Burman Group was at 20.83 per cent. Whether the changes re-energise the company and the brand, remains to be seen.

EVEREADY INDUSTRIES

Year End	Networth	Total Debt	Net Sales	PAT
FY16	206.29	200.43	1323.66	69.03
FY17	289.5	216.1	1357.24	93.53
FY18	342.72	264	1456.38	53.16
FY19	375.9	408.03	1506.64	47.83
FY20	555.51	393.97	1221.09	178.3
FY21	244.91	441.49	1248.99	-312
FY22	290.06	395.51	1206.76	46.47

Figures in Rs crore
FY22 figures are as per results filing

Source: Capitaline
Compiled by BS Research Bureau