Dabur well placed to tap in post-Covid market: CEO Mohit Malhotra

Dabur India CEO Mohit Malhotra says as the world prepares for life after Covid-19, economies across the globe are more likely to look inwards. The same will be true for India with 'Made in India' being a key factor that is likely to influence purchase decision of consumers.

In an interview with IANS, Malhotra said that Dabur is well placed to successfully tap the emerging growth opportunities in healthcare and deliver profitable volume-led growth in the coming quarters.

<strong>Q: What is Dabur's take on "Go Vocal for Local" call? Several of Dabur products have been endorsing this theme on social media?</strong>

A: Dabur is an Indian company with an over 135-year-old heritage. We are a true Indian transnational with manufacturing bases spread across 12 locations in India, besides eight locations abroad. We have launched a series of campaigns on 'Vocal for Local' that highlight our Indian roots, which includes two films that have been specially created to showcase our heritage and our Indian roots.

As a brand, Dabur evokes feelings of trust, health and wellbeing in the minds of our consumers. With our 'Vocal for Local' campaign, we are highlighting the Indian roots of Dabur and our 135-year-old heritage of caring for every Indian household's health and well-being.

Our brand communications around #Vocal4Local reflect our Ayurvedic and Indian heritage, and our strong sense of pride about 'Made in India, by Indians, for Indians'. We have started promoting these ads on digital media and also on television, particularly news channels.

As the world prepares for life after Covid-19, economies across the globe are more likely to look inwards. The same will be true for India with 'Made in India' being a key factor that is likely to influence purchase decision of consumers. The 'Vocal for Local' campaign has the potential of harnessing India's traditional knowledge like Ayurveda, our diversity and even our indigenous products that are an integral part of our identity.

<strong>Q: As the lockdown is ending gradually, what is the Dabur strategy to scale up production and restarting the manufacturing capacities?</strong>

A: All our plants are operational now. We are today operating at two-thirds of our operating capacity. That said, availability of manpower continues to be a challenge due to the exodus of migrant workers. We are currently trying to rope in local workmen from nearby areas around our manufacturing units, and even seeking permissions for inter-state transportation of workers.

<strong>Q: The e-commerce space is seen massive traction first due to the lockdown restrictions and now has become a way of life with ongoing social distancing? How is Dabur playing this?</strong>

A: E-commerce sales for us almost doubled in Q4 of 2019-20 fiscal and has a saliency of 3.1per cent now as compared to 1.31per cent a year ago.

E-commerce was the fastest mode to reach out to consumers, particularly when the lockdown is in place. This is the reason we chose to launch Dabur Sanitize hand sanitizers and a host of other new preventive healthcare products through the e-commerce route and supported them with special campaigns on digital media. This helped us reach the consumers faster and meet their growing need during the lockdown period.

That said, the neighborhood Kirana stores have also gained relevance in the minds of consumers during this period and this will continue in the days post-Covid-19.

<strong>Q: Several retail outlets continue to be closed and since that forms the crucial last mile delivery link for consumption of products, how do you see the situation?</strong>

A: In the initial days of the lockdown, supplies of all products, except essential goods, were restricted. However, with the gradual lifting of restrictions, the situation has improved. While retail outlets in shopping malls continue to face restrictions, the neighborhood Kirana stores are filling the need gap and meeting the consumer's need for daily use products.

At Dabur, we have also invested ahead of the curve in building a strong rural footprint, which today covers over 52,000 villages. We are investing in enhancing this coverage to around 60,000 villages by the end of this year, which would further strengthen our foundation and help us deliver sustainable profitable growth in the coming quarters.

<strong>Q: The FMCG sector has been more resilient than the others as it did not shut down completely and was part of essential services. What is the outlook going forward?</strong>

A: The FMCG business is largely seen as being more resilient in view of the fact that these include essentials like healthcare and hygiene products.

While we saw a significant decline in the second fortnight of March and in April this year, the situation improved in May and we are already at near normal levels. We see sequential improvement and expect business to revive gradually. The situation is still fluid and it is difficult to give an outlook now as Covid is on the rise in many geographies and situation is still dynamic and uncertain.

Dabur is progressing on its new strategy to navigate the new normal and turn the challenges into opportunities. We are already witnessing a strong surge in demand for our healthcare products. We are currently seeing a 400 per cent surge in demand for our flagship immunity booster Dabur Chyawanprash and an 80 per cent growth in Dabur Honey. With these products facing a stock-out in the market, we have already invested in expanding capacity to meet the growing consumer demand. With our recently launched Dabur Sanitize hand sanitizer too, we are on track to record Rs 100 crore sales in the first quarter of 2020-21.

In the post-Covid-19 world, I feel the importance of preventive healthcare, particularly with Ayurveda, and of personal hygiene will grow in the consumer mindspace. I feel healthcare would gain as consumers would be seeking more preventive healthcare products for boosting their immunity. Even personal hygiene products like hand sanitizers would become an essential part of the monthly grocery basket.

In line with this changing demand pattern, Dabur has developed a strong pipeline of innovations to address the growing consumer need for Preventive Healthcare and Personal Hygiene. We have already rolled out a slew of innovations in the Preventive Healthcare space with the launch of immunity boosters like Dabur Tulsi Drops, Dabur Amla Juice, Dabur Giloy-Neem-Tulsi juice and Dabur Immunity Kit, to name a few. In addition, the company has also ventured into the personal & household hygiene space with the launch of hand sanitizers, air sanitizers and disinfectants under the Dabur Sanitize brand. Going forward, Dabur will capitalize on the emerging tailwinds and the distribution might to further strengthen its position as a frontrunner in the Ayurveda products market

With the lockdown easing, Dabur has been at the forefront on delivering authentic Ayurvedic solutions to meet the emerging healthcare needs of consumers in the post-Covid market. Demand patterns have also changed significantly, with consumers increasingly seeking Ayurveda-based interventions for boosting their immunity, besides products that meet their personal and household hygiene needs. Dabur, as the world's leading Ayurvedic and natural healthcare company, is well placed to successfully tap the emerging growth opportunities in healthcare and deliver profitable volume-led growth in the coming quarters.

<strong>Q: What are the supply chain issues being faced by companies due to the restrictions?</strong>

A: Though the situation has improved with the easing of restrictions, supply chain continues to be impacted due to non-availability of trained manpower and truck drivers following the exodus of migrant workers. As a result, companies are facing difficulty in ensuring smooth functioning of the entire supply chain with movement of materials, be it raw material, packing material or finished products, facing bottlenecks.

<strong>Q: What is the Dabur view on the stimulus package and its impact on consumption?</strong>

A: The underlying principle of the government financial package has been to empower people in their fight against the distress caused by Covid-19. They have addressed nearly all sections of the society—from migrant workers returning home and farmers to MSMEs and large industries.

Some steps like collateral free loans for MSMEs and reduction in TDS rates and EPF contribution, etc., will overall ease the liquidity pressure in the economy, help restore normalcy and improve consumer sentiment. The government also sought to soothe the frayed nerves of migrant workers returning home and the urban poor by providing them free foodgrain, portability of ration cards, easier access to funds and affordable housing in their second tranche of relief measures.

The most significant of announcements came in the third tranche, which sought to empower farmers and drive long-term growth through creation of infrastructure to support the agri-industry. The investments in farm gate infrastructure would go a long way in reducing food wastage in the country and also ensure availability of quality local produce for food processing companies, besides generating employment.

Promoting cultivation of medicinal plants is a big positive and will help the Ayurvedic products and medicines manufacturers by ensuring availability of key raw material. Encouraging more farmers to enter this field will ensure a steady increase in the population of native herbs, besides boosting farmer income. The formation of Beekeeping Infrastructure Development Fund is another step in the right direction.

The government's decision to allocate additional Rs 40,000 crore for MGNREGA scheme is another big positive which would lead to creation of more jobs in the hinterland and ease the distress of migrant workers returning home. This would put more money in the hands of rural consumers and spur consumption in rural markets. Allowing private investments in all sectors would also lead to job creation..