Thread by @stockifi_Invest

A Mega-Thread on the story of one of India's leading FMCG companies built by one of the finest Indian entrepreneurs: Marico and Harsh Mariwala
@hcmariwala @Marico_News

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1) Mumbai's Masjid Bunder market is, on a good day, an energetic cacophony of traders, handcarts, lorries, and snaking rows of shophouses and stalls selling everything from spices to grain and soil.

2) Until 1992, it housed Marico, a fledgling consumer goods company founded in 1990 by an offshoot of Bombay Oil Industries, a commodities firm of the Mariwala family.

3) Marico is India's leading company with a turnover of $1+ billion with a presence across 25 countries.

4) Marico traces its origins back to 1971, when Harsh Mariwala, a 20-year-old commerce graduate, joined Bombay Oil as a third-generation member of the family business.

5) At the time, a B2B business based on the spice industry had no professionals.

6)During Harsh's childhood, everything was managed by the Mariwalas (Mari is Gujarati for pepper): his father, three uncles, four cousins, and Harsh himself. There were no appointment letters or staff policies.

7)In the 15 years, Harsh built consumer brands for the firm's key commodities, coconut oil, and edible oils, learning everything from hiring to distribution.

8)By the mid-1980s, the consumer products division of Bombay Oil contributed 80% of the company's revenue.

9) Already, internal conflict over resources and talent was rife. It took three years before Harsh finally convinced his family to hive off the consumer products division of Bombay Oil into Marico.

10) Culture is crucial for a company to be successful and a great place to work. Culture makes or breaks the business strategy, and the HR function is instrumental in it.

11) So the first person Harsh Mariwala hired was the head of HR, a professional from Asian Paints.

12) Mariwala and his team held numerous discussions with the new senior staff members before coming up with what they called the three Ps of Marico: People, Products, and Profits, as well as the accompanying values.

13) He moved the company's headquarters from Masjid Bunder to the upmarket suburb of Bandra, creating one of India's first open-plan offices.

14)Marico encourages its employees to experiment and take risks. An employee may stay in the same job for a max of 3 years before moving

15) Marico also has an internal innovation award that attracts about 20 entries a year. Many of the awards have gone to factory workers.

16) One such winner had come up with a simple solution to coconut oil bottles left empty on the filling line: install a fan to blow them off.

17)Not all Marico innovations have succeeded, but lessons learned from failed experiments went into making subsequent brands a success.

18)Building market confidence - Marico went public in 1996 but by 1999, the company was facing an existential crisis.

19) Hindustan Unilever (HU) launched Nihar in 1991, a coconut hair oil brand to compete with Marico's Parachute product, which accounted for 60 % of its profits at the time.

20)Although HU and bankers approached Mariwala multiple times, he refused to sell out.

21)Considering Marico's previous experience and 50 percent market share, he was confident that Marico would prevail.

22)Marco fought on four fronts. First, it improved the quality of the product. In addition, it used the emotional appeal of coconut, a symbol of many auspicious celebrations in India, such as weddings, in its advertising.

23)Moreover, rural distribution was strengthened by the company. As most FMCG battles are fought on the ground, it aimed to empower its sales staff.

24)The relationship between your company and customers should be based on trust and warmth. It cannot be transactional.

25)Mariwala says: “The private sector is an integral part of society. It cannot prosper without recognizing the social context within which it operates.”

26)Aware of India's heart disease epidemic and diabetes epidemic, Marico started Saffola Healthy Heart Foundation to motivate people to live healthier lives.

27)Free cholesterol screenings are conducted at Saffola Health Awareness camps.

28)Today Saffola is a US$143 million brand contributing 16 percent of Marico’s sales.

29)With business partners, Marico has also built trusting relationships. The company cut out the middlemen by opening some 20 copra collection centers in farming areas.

30)Farmers now sell directly to Marico rather than go through various layers of brokers.

31)Marico saves on transport costs and passes the savings on to farmers via better prices for their produce.

32)It also provides the farmers with weather information and productivity tips.

33)With distributors, Marico sponsors training programs where they learn to maximize return-on-investment, among other topics.

34)All these benefits mean Marico’s partners are that much more motivated to work with the company.

35)Almost 30 years after, Marico is entering its next phase of growth. True to the Marico culture, it will be led by professionals, including CEO Saugata Gupta.

36)He is a professional marketer who joined Marico in 2004 and assumed the top job three years later.

37) Engine 2, as Gupta calls the new phase, will be powered by innovation and take the long view. He aims to create new brands in male grooming, superfoods, and skincare to fuel Marico’s growth beyond that spurred by its established brands.

38) Harsh Mariwala wins the EY Entrepreneur of the year 2020 award and said “When you involve people, you win their commitment,” Mariwala says of the lesson he learned.

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