Thread by @FinEklavya

The Story of Parachute

How an Indian Brand Defeated a Multinational Behemoth and Cemented its Legacy for Decades to Come.

Decoded! 🕵️

@dmuthuk @Gautam__Baid @unseenvalue @NeerajMarathe @stockifi_Invest @drprashantmish6 @ms89_meet @caniravkaria @saketreddy

🧵👇

“Kehte hai kisi cheez ko dil se chaho,
toh puri kaiynaat tumhe usse milaane ki koshish mein lag jaati hai.”

An iconic dialogue from the movie Om Shanti Om held true for the founder of Marico. His passion and devotion pushed the brand to win against all odds.

A warrior never knows what’s going to be his next challenge or how mighty it will be. The only thing that he can master is his ‘will’ which can make him sustain the brutalities of war. One such warrior is Harsh Mariwala, father of an iconic brand, Parachute.

Parachute has been in the market for more than 5 decades, commanding a monopoly in the coconut oil industry. Today, that blue bottle sits on the shelves of 1 out of 3 households in India & is almost synonymous with the word coconut oil.

But it wasn’t an easy ride for Mariwala.

Mariwala was in his twenties when he joined his family business. At that time, the business was already producing coconut oil except in an unbranded form with a business-to-business model (B2B).

Soon, Mariwala realised the supremacy of his product and its potential to rock the consumer market. This realisation made him undertake the risk of transforming his company’s business into a business-to-consumer model.

Mariwala left no stone unturned in establishing Parachute as a retail brand by improving the packaging and investing heavily in its marketing. To make it more attractive and consumer friendly, he sold Parachute in plastic bottles over tin containers.

By the late 90s, Parachute was making a killing in the market. It was successfully able to acquire more than 50% market share of coconut oil in India.

While Mariwala was basking under the glory of his achievements, little did he know that he was about to endure the biggest challenge of his life. He was going to lock horns with a ferocious opponent and the outcome would decide the fate of his company.

Hindustan Unilever (HUL), a multinational FMCG behemoth entered into the coconut oil market through the brand Nihar after acquiring Tata oil mills.

Nihar owned roughly 17% of the market share. After its acquisition, HUL was eyeing to capture Parachute’s market.

One day, Mariwala received a call from Keki Dadiseth, the then chairman of HUL with the proposal to buy Parachute. It was a clear sign of war from HUL to Marico, from Dadiseth to Mariwala and from Nihar to Parachute.

Dadiseth: “ Mr. Mariwala, I will give you enough resources to take care of you and all your future generations. But if you do not sell..”

Mariwala: “ Mr. Dadiseth, you may think I am a nut but you will find I am a tough nut to crack. Thanks but no thanks.”

Since HUL had recently given Colgate a run for their money by taking away a sizable chunk of their market share through their own brand Pepsodent, the call was a warning for Marico to get out of their way or else, they’re going to be the next Colgate.

Everybody had shunned Marico in the capital market. They believed that a dwarf like Marico would stand no chance against a giant like HUL.

HUL, at the time, was 50 times more resourceful and influential than Marico.

But against all odds, Mariwala chose not to succumb without giving a fight. This was going to be the ultimate test of his passion and grit.

It was a Do or Die situation. He put everything he had accumulated over the years into saving Parachute.

While HUL’s strength was in advertising and distributing, Marico was focussing on something that was extremely sacred to them and the only arrow in their quiver that could have saved them.

Quality.

But a sense of fear had gripped Mariwala’s employees and so, he decided to ignite an equal passion and inculcate a feeling of belongingness within his field force through the launch of an operation called ‘Parachute Ki Kasam’.

Mariwala made his employees dress up like soldiers. The room was designed like a battlefield and the entrance wasn’t through a door. Instead, the soldiers would have to crawl through a tunnel.

This was a war. The employees were the army protecting their Motherland, Parachute.

Marico's corporate team had set up exclusive telephone lines to extract information from the field and react quickly to the opponent’s initiatives.

It was more like, ' the fox was running for its dinner, but the rabbit was running for its life. '

The difference between HUL & Marico was that for HUL, Nihar was just one out of the other 20 projects they were operating but for Marico, Parachute was everything.

HUL was trying everything in the book. It was deliberately undercutting Parachute & aggressively advertising Nihar.

Despite having an extremely strong network with distributors, Nihar’s market share dropped down to 8% and Parachute, on the other hand, kept growing. Even the relentless marketing of HUL was no match against the quality of Marico.

Eventually, HUL swallowed its pride and decided to sell their coconut oil division.

Guess who bought it?

It was Harsh Mariwala. Marico acquired Nihar in 2006. Since then, it exploited Nihar’s substantial presence in East India and now, Parachute and Nihar together command nearly 80 % of the coconut hair oil market, of course under the sole name Parachute.

Marico had finally turned the tables. And today, the brand Parachute itself is a testimony to the brilliance with which they fought. Remember, no matter how tangibly small one is, if the intangibles are large, one is always going to make it.

As they say, the universe falls in love with a stubborn heart and that is exactly what transpired in the story of Harsh Mariwala.