Dabur Eyes Rs 7,000 Crore Sales From Home, Personal Care Segment In Five Years

Dabur India Ltd. has set an ambitious five-year revenue target for its food and beverage, healthcare, and home and personal care portfolios.

The Vatika shampoo-to-Real Juice maker aims to garner revenue of Rs 7,000 crore from the home and personal care segments, the company said at an investor meeting on Friday. It also expects revenue from healthcare as well as the food and beverage vertical to touch Rs 5,000 crore each in 5-7 years.

Chief Executive Officer Mohit Malhotra expects the growth to be driven by a three-pronged strategy—firstly, by transitioning its "power brands into power platforms" by extending them to adjacent spaces. At the same time, it will look to scale up more brands to become power brands.

Secondly, the packaged food maker aims to grab a larger share of the booming e-commerce market. Currently, online sales contribute 9% to total sales.

And thirdly, it will be expanding distribution with an eye on increasing market share. It expects to reach 8.5 million outlets in the near term, up from 7.5 million outlets as of FY23, covering 1.2 lakh villages. The company is also looking to increase its direct reach by 15% to 1.6 million outlets.

In FY23, the company's home and personal care business registered net sales of Rs 3,846 crore, making up 47.2% of its domestic business.

The healthcare vertical's net sales stood at Rs 2,581 crore, while the food and beverages business achieved net sales of Rs 1,724 crore in fiscal 2023. This year, the company is eyeing Rs 500 crore in revenue from the food portfolio, as it expects the recently acquired Badshah Masala brand to grow by 20%.

Overall, the company currently has nine power brands, which include Dabur Chyawanprash, Honey, Pudin Hara, Lal Tail, Honitus, Amla, Red Paste, Real, and Vatika. While Real is a Rs 1,500 crore plus brand, Dabur's Red Paste, Amla, and Vatika are in the Rs 1,000–1,500 crore club, followed by Honey and Chyawanprash, which sit in the Rs 500–1,000 crore club.

Further, it has 17 brands within a revenue band of Rs 100–500 crore. "We believe there is a huge potential to scale them up further and take them to as many homes as possible. For instance, Hajmola is now a Rs 400 crore brand. We want to move it to the power brand structure," said Malhotra.

Within the home and personal care category, Dabur said it will drive premiumisation to expand gross margin. For instance, the company has already launched body washes under its Gulabari brand, apart from aerosols under Odonil air fresheners.

As for food and beverages, Dabur expanded Real from a fruit drink brand to include plant-based drinks like soya and almond, superfoods like chia seeds, aerated fruit beverages, milkshakes, coconut water, and peanut butter.

On the rural-urban dynamics, Malhotra told investors that he expects the year ahead to be much better for the company as compared with last year, with volume growth kicking in both regions. The gap between rural and urban is narrowing with moderation in inflationary trends, he said.