After 12 years of operations in India, Germany-based Dr. Oetker, the market leader in mayonnaise in this country, is expected to break-even at the EBITDA level this year with a top line of Rs 340-345 crore.
It has targeted to reach revenues of Rs 500 crore in 2022.
The growth is majorly led by new stock keeping units (SKUs) the company introduced in recent times, extension of existing products and an increase in its outlet count.
“We had invested in a plant in Rajasthan in India which is spread across 15 acres and has an installed capacity of 46,000 tonnes. Thus, we were unable to report profit. However, last year (2019) we reported break even at the cash level and this year, in 2020, we will report break even at the EBITDA level”, Oliver Mirza, managing director and CEO at Dr. Oetker India and SAARC told Business Standard.
Dr. Oetker follows the calendar year to report its financial numbers.
The company recently unveiled a new natural variant of its peanut butter range and also launched smaller 150 gram SKUs two months ago. It also has a 925 gram jar and another 340 gram pack.
“This way, I think it will help us expand the business. Smaller SKUs will help to get new customers and the existing consumers can scale up to higher SKUs. The new natural variant of peanut butter will also help to expand into the health and wellness consumer segment”, Mirza told Business Standard.
The Rs. 250 crore peanut butter category in India is expanding at a rate of 35 per cent per annum and Dr. Oetker has a 20 per cent market share. This product comprises around 25 per cent of the company’s annual revenues from India while 50 per cent comes in from mayonnaise.
“The growth had accelerated since 2015 when we came up with advertising campaign and also launched new SKUs”, he told this business daily.
The mayonnaise category in the country is Rs 300 crore string and has been growing at around 35 per cent per annum. Dr. Oetker, which has a 60 per cent market share in this category now, entered the mayonnaise category in the country back in 2008 with the acquisition of Funfoods. Back then, mayonnaise was only a Rs 8 crore market.
The company plans to also increase its outlet count from the current 1 lakh to 1.2 lakh this year. The new outlet coverage will majorly be centred on existing metro cities and tier 2 locations. Delhi and Mumbai are its strongest markets together contributing 30 per cent of the turnover.
The company is reluctant to bring its global brands into India or enter new categories as it feels Funfoods has grown to be its flagship brand in the country and the portfolio will suffice its business interests in the foreseeable future.