Nihar grows slowly but surely

Marico's second-largest hair oil brand has been gaining market share with some buzz in its marketing

Even as Marico's flagship brands such as edible blended oil, Saffola and coconut oil Parachute face some headwinds, the company is quietly working to grow its other brands like Nihar. It added a new angle to buying a bottle of Nihar Shanti Amla hair oil, for example. Two per cent of the sales proceeds from each would be put in children's education with the help of CRY India.

Both Saffola and Parachute have seen price-cuts on the back of slowing growth rates. However, Nihar has been growing its market share in the Hindi-speaking belt over the last one year, says Sameer Satpathy, executive vice-president and business head (sales and marketing) at Marico. "Nihar has been growing upstream, as the Ganga flows. From the east, we are strengthening it in the north," Satpathy adds.

The brand that did not fit in with the then-Hindustan Lever's (now Hindustan Unilever) power brand strategy and was a low margin, branded commodity business for it, meant opportunity for the ones which entered the fray in buying it in 2005-06. While for some it meant an entry into a new segment, for Marico, which finally acquired it, Nihar meant an upfront entry into the eastern hair oil market, lorded over by Shalimar but with a strong Nihar bias and bolstering its perfumed coconut oil offerings, which also enjoyed higher profit margins than regular coconut oil.

While the coconut hair oil space, which includes Marico's Parachute and Nihar's coconut oil variants, brings in around Rs 1,500 crore for the company, according to analysts' estimates, value-added hair oils, that include light hair oils such as cooling, amla, almond and perfumed oils account for around Rs 720 crore of Marico's revenues. The total hair oil segment is worth around Rs 5,000 crore.

Nihar's perfumed coconut hair oil, with fenugreek extracts (around Rs 100-120 crore), and other value-added variants such as almond and cooling oil together will be around Rs 250 crore, while its Shanti Amla brings in Rs 200 crore (according to analyst's estimates), making Nihar the second-largest hair oil brand in Marico's portfolio. The third brand it has is Hair&Care.

With Nihar, Marico is trying to flank Parachute's strongholds in the west and south of India in branded hair oils. It had been strong in eastern India, to begin with, second to the local Shalimar. But as numbers show, it has been able to gain further ground in its strongest market as well. Two years back, Marico gave a fillip to the brand, Nihar Naturals, in the east with its region-specific advertising. It tied up with the Bengali band, Chandrabindoo, to come up with a song, Jaani Naa, taking after the band's tongue-in-cheek satirical style, and an album called Niharika.

While the original song played frequently on regional FM stations, it did not have any overt branding, but the benefits and brand name of Nihar Naturals Hair Oil (the value-added coconut oil) were weaved into the lyrics. When the video was rolled out with the band and actor Vidya Balan, people were already attuned to the music, shooting up recall. The song and the album, which featured eight contemporary Bengali vocal artists, underlined the progressive women's need to look beyond the stereotypes painted in advertisements and society. Marico claims that the value share of Nihar Naturals in the east grew from 19.5 per cent to 21.5 per cent in January-October 2011 - the duration of the campaign, against a drop of 0.3 per cent in the same duration the year before.

According to Nielsen data quoted by industry insiders, Nihar grew its market share by 1.3 per cent in the north (to 5.7 per cent market share), 0.7 per cent in the east (23.5 per cent market share) and 2.3 per cent in the west (to 8.6 per cent) in value in the period of June, 2012-May, 2013.

Volume growth in the north was 2.6 per cent (to 10.3 per cent market share), 2.3 per cent in the east (30.8 per cent in market share) and 4.3 per cent (to 15.1 per cent market share).

It also helps that the company brought in Shanti Amla oil under its aegis, giving the brand a stronger recall in the amla hair oil segment, where Dabur leads with its eponymous amla oil brand. "Shanti Amla used to be big brand with its own standing before being branded as Nihar. In fact, in the last few years, it has been gaining market share rapidly by its disruptive pricing, selling much lower than Dabur Amla," points out an analyst. Nihar Shanti Amla's price cuts get reflected in its double digit volume share as compared to its single digit value share in the north of India, where amla is a reigning category.

With the last communication infusing corporate social responsibility in the brand, Sathpathy says, "We have been able to get purpose into the brand. It has really helped rally the team on the ground to push the brand as much as it has clicked with consumers."

Value-added hair-oils, be they coconut or lighter oils, are where the margins lie for players. Marico, apart from ensuring a presence in nearly all the variants, will bank on Nihar to flank Parachute. After all, preventing competition from benefiting from Nihar, which had usurped Parachute in rural markets at the turn of the century, was also seen as a reason for Marico's acquisition for Rs 240 crore in 2006.