Marico CEO Saugata Gupta Its D2C Business And India's Changing Consumption Patterns
Govindraj Ethiraj speaks with Gupta, the CEO of a company that makes Saffola and Parachute hair oil, on how it has changed strategies to keep up with the changing demands of Indians.
NOTE: This is a transcript of the interview including questions by the host and responses by the interviewee. Human eyes have gone through the script but there might still be errors in some of the text, so please refer to the audio in case you need to clarify any part. If you want to get in touch regards any feedback, you can drop us a message on [email protected].
Saugata, thank you so much for joining me. So you're entering your 25th year in Marico. Marico started with two prominent brands, Saffola and Parachute, and that continues to be the mainstay today. If I've got it right, Parachute is still your biggest brand. Saffola follows close behind. It's more than a 2,000 crore brand. So these are substantive brands which have held their own. And within themselves, they've split into many tributaries, so to speak. I mean, many different kinds of brands across other countries and so on. From your vantage point, as you look back and as you stand today, what's changed and what's not?
So obviously, this has been our core. And in 2006, we acquired Nihar. That has become a very, very big brand. And although it's a very, very, I would say that it's much more in the north and the east part of the country. I think one of the biggest changes that has happened in Marico is, and if I look at Marico 1.0, 2.0, and 3.0 was, initially, we started off as an Indian company with most of the large presence in India with Parachute, Saffola. We started venturing into other brands and other markets. Initially, we started catering to the Indian diaspora, then started acquiring businesses. So today, our international business is around 26%-27% of our turnover. It's actually, we compete in much more different categories, like we are there in shampoo, baby. We are there in ethnic hair in South Africa. It's a very, very successful and profitable, in spite of all the vagaries of currency and other things. The other interesting journey has been foods.
So if you look at our entire diversification into foods, which I believe is one of the most successful case studies of expanding the total addressable market of Saffola. Because Saffola, once upon a time was, basically, the center of gravity was on heart health, and it has now become a better-for-you product, where people want to adopt Saffola if they want to adopt a healthy way of life. So today, food is a big business.
I think, interestingly, we started digital in around 2020 when we first acquired Beardo. And since then, again, digital has been. So I think the entire, while the core has remained constant, I think, the overall profile and the portfolio has changed.
It's far more international, far more diverse. And I think the reason we have done it is we believe that in any organisation if you don't reinvent yourself, and especially if your core has high penetration, and you need to actually refresh and re-imagine yourself. But I think it also gives a beautiful opportunity for a lot of youngsters, the Gen Z, because to experience these brands and offer interesting careers out there.
And what's changed in the way people consume it? So as per capita income has gone up in the last two decades, do they consume the same products the same way? Or do they consume extensions of the product, which you subsequently rolled out?
So I'll tell you what is the golden truth in India. If you look at any category, and I'm not talking FMCG, I think a classic case has been telecom, airline—affordability and availability drives the biggest drive. In a market where there's aspiration, there's a constant increase in per capita income, there are a lot of young people. I think affordability and availability and relevance are the biggest drivers of growth. And whether it's in CPG, whether it's in if you look at banking, adoption of digital, telecom has shown that as a great example, or when airlines became privatised, and I think there's this change.
Now in terms of CPG, I believe the two, or three big shifts which we're doing is people want to look good. They want to stay, look young and stay healthy. And health has something which has become far more heightened post-COVID. One thing people realise is that those who had certain issues.
Or did not have comorbidities.
Yeah, comorbidities, their survival, and they had a problem. And therefore, I think in India, these are the three drivers. Obviously, convenience is emerging as a big driver. But one thing is happening is that if you look at in the last three, four years, people want to invest behind experiences. If you look at the surge in travel, hotels, people who want premiumisation.
Now coming to what works, I think the biggest two drivers is driving penetration and price disruption. For example, if you look at any category, shampoo sachet being a great example. That a category penetration can drive with price disruption or format disruption. The other interesting thing that has worked far more in developed markets working in India is what I call category premiumization, which is through format. For example, if you look at the entire home cleaning or detergents, it started with a cake, went to powder, went to liquid, went to pods today. And each premiumisation gave consumer better benefit, better experience, and your ability to therefore premiumize and charge. So that's how the categories have spread. And I think in each category, for example, today, serum, for example, it's a bridge product for hair oiling because it's a contemporary format.
If you look at the mask. So the other thing that is happening is that people wanting to look good is that a lot of things in say, in consumer goods salons coming home. But one interesting thing that has happened is that if you look at a habit of hair oiling or old Indian habits, as people have adopted modern formats, there is a trend to go back into the roots. And I think the Indian consumer today…
The roots quite literally.
You know, the Indian consumer today is very, very comfortable in adopting Indian things. So when we grew up, I remember anything Western was seen as, you know, okay, I'm seen to be adopting that. But today, if you look at, yes, I know you are right that it has to transcend the West, you know, the turmeric latte or yoga. But I think Indians are far more, whether it's looking to music, films, culture, I think Indians are far more comfortable, you know, in adopting.
So you're saying hair oil is being re-adopted in some ways for its original purpose, which is to hair oil.
I'm just giving hair oiling as a habit or even things like Ayurveda today or natural. I think these are the trends today which we are seeing. And I think people are, if you look at even doing multani mitti or something on your face or haldi on your skin, I think what is happening is the more there is pollution, the more you are like, for example, more you're adopting transformational cosmetics and habits, the more there's a trend to also go back to your roots and do something natural. And there's a great trend. And if you look at some of the successes of even Ayurvedic brands today, I think what has happened is that e-commerce has democratised availability and decreased exit barrier, entry barriers. In today's US, there are a lot of Indian brands today who have been successful in the Ayurveda thing. Now, I mean, Indian brands have transcended beyond Patel stores in the USA. They're available in the mainstream. They are doing well. So I believe that, I think these are the changes I see in the consumers.
Right. So just to come back to the point about hair oil. Now, again, it's a traditional product. And you're saying there is some revival caused because of the way people are consuming media about Indianness which is a more cultural heritage thing. But how do you sense that? Are you sensing that because of sales or are you sensing that because of surveys that you're doing with consumers?
So as a habit, I don't think it has continued to be a habit. Now, I think what we are now seeing is that people believing at the very top end, for example, those who were lapsing out of the category, we see them coming back into the category. We are also seeing Western adoption of the category. By the way, the category is equally strong in the Middle East, North Africa. We're seeing some resurgence of it as a category in some of the Western markets. So I think it's a habit. Just as I said that in both hair, skin and other things that traditional habits are coming back. And I think the biggest thing is natural. And the natural can be given anything. If you look at, say, if you look at K-Beauty, one of the magic ingredients is Jeju volcanic ash, for example. Or if you look at some products from an Amazonian rainforest. So I think globally there is a trend towards natural.
Interesting. And how is that manifesting itself for you in the way you're responding to product differentiation? I mean, when I say differentiation, I mean, parachute is again, let's say the mother brand. What new things are you doing or thinking of in response to this?
So I'll give you an example. We acquired this brand called Just Herbs. It's again, modern Ayurveda. And it is in skincare, colour cosmetics, but everything which is Ayurvedic. And if you look at the success of a brand like Forest Essentials, again, if you look at it, it's a very modern rendition of Indian Ayurveda. So it's like, you know, fusion Indian food, you know, in a Michelin star restaurant. So I think that is one trend which is happening, that how do you deliver Indianness in a contemporary format, for example. So if I look at serum as a category, serum is nothing but oil plus, you know, something which is a far more, better sensorially. And if you look at some of the brands, you know, global brands who have gone into serum as a category, it's actually nothing but a leave-in conditioning, which is also nourishing. So what's happening is people are adopting contemporary formats of an age-old habit. And this is the same thing with skincare.
And I guess it will happen with, look at, for example, look at hair colour as a category, started off with no ammonia but even organic, organic is a big thing. And it's happening in food also, for example. You look at edible oil today, cold press oil is a trend.
Or virgin coconut oil has been a superfood in, you know, in the US and other markets.
So I'm going to come to foods in a moment. So in a situation like this, you quoted the example of Forest Essentials, who seems to have come and grabbed, let's say a certain share of the premium end of the Ayurvedic market. Are you as an incumbent at an advantage or a disadvantage in as brand in brand terms?
I think one of the things which incumbent CPG companies globally had been slow to respond to is to look at these D2C and founder-driven brands, which have been able to create far more belonging to the new generation and carve out growth opportunities. We realised it early. And that's the reason we started our D2C journey. But one of the things we realised that you have to completely have a different business model in order to achieve this.
But the same brand, but different business model.
It could be a different brand…a same category, but a different this one.
No, the reason I'm asking is, is it a, I mean, is it a liability in some ways? I mean, having a traditional brand, or is it an asset to go in with more, which is more a distribution set? When you said D2C, it's more a distribution play rather than a brand play, isn't it?
I'm talking about brands which are digital. See, they cater to a different set of consumers. To give you an example today, in male grooming, I have a brand called
Set Wet, which is a mass brand. Beardo operates the premium end. Now Beardo, for example, as a brand, the brand stands for it's the Harley Davidson of male grooming. And that's what the equity of the brand was crafted from. And it can now, if I didn't have a brand called Beardo, I can't see myself as a mass brand of Set Wet playing in that area. So what has happened is this, as the affluence of India started, as digital, modern trade, what organised trade has done is to drive premiumization… It has created, I think, a kind of a platform for newer experiences, a newer set of brands who are far more experimentative.
And if you look at the new generation, they look at brands with a purpose, they look at brands with a difference.
And yet new brands.
And yet new brands.
So in a sense, they're not necessarily consuming old brands. And for you, it's really the advantage of obviously having the scale experience, big enterprise, which allows you to start a new brand and then go after it in a new channel, in this case being D2C.
Yeah. But you see, the question is that India is a very interesting, this one, you know, India is always what I call an ‘and’ market, like people say that, okay, traditional kiranas will die, don't think so. India's traditional kiranas are very smart. Okay. Similarly, if I look at it, India is a large market, it's a complex market. And therefore, different sets of consumers and different sets of this one will coexist. So traditional brands will no not go away.
So if you look at one of the things that you know, brand equity or loyalty or retention in India, India legacy brands is one of the highest. It's because people are, you know, people have been using through generations and this one and they believe in it, they believe in this one. And therefore, I think the Indian consumer is extremely comfortable in coexisting, in the sense that he will go for the prayers, he will listen to techno music, but in a concert in the evening, and they will do it seamlessly.
I think that's what the consumer has become. And this we would say for someone who's born after 2000 as well.
Yeah.
Someone born after 2000 will connect with Parachute, the brand and maybe consume one of its offshoots.
Yeah, and consume and use and completely. So I think it's, see, the thing is that that's why I said that at the end of the day, you know, people are happy to coexist with different sets of brands. And it is ultimately, the brand has to be relevant at that point in time. And the benefit has to be relevant. It is not about… this is my brand, this is your brand. See, earlier, you know, if I look at when I started working in the 90s, companies used to have a rural portfolio and urban portfolio. Even in rural, if people are challenged with an outlay, they will still want an aspirational product. And that's why you have, say a brand like a Dove or a L'Oreal in a sachet. Because people and what has also happened is today, the media you consume, the information you consume is universal. It is not that in earlier days, you had a Doordarshan and you had satellite television and something. It's a common one. Today, if you look at with the internet penetration, people consume the same thing. So the aspiration is the same. And India is a country where people aspire and people want change. The youngsters, you know, it's a very, very ambitious and aspiring country.
So from your point of view, now you're essentially, this is a twin engine company. You've got the D2C side and you've got the traditional channels and brands, of course. So tell us about how this is working and what are the challenges, if so, that you face in running a twin engine?
So you're absolutely right. I think two, three things we realised. One thing we realised is that there are two essential business models. The core engine, which I call the mothership, runs on scale efficiency. It's a repeatable model of mass distribution, mass marketing, and it operates with a different cycle time. Perhaps the risk appetite is low because the degree of risk when you try to do any change is different. The Engine 2 works with high-velocity innovation. So the approach Engine 2, is think big, start small, scale up fast. You need to quickly destroy things, stop doing things. The velocity of innovation is different. The risk-taking appetite is different, but they are very, very, there would be a hundred bite-sized risks, you know. And secondly, therefore, the process system, the kind of people, the kind of compensation, everything is different. And we were comfortable working with two different systems. A lot of legacy companies want to say that this is the thing which has worked in the last 200 years, I'm going to impose that on the second one.
I'll give you one example of this. A simple thing as innovation cycle times, it's maybe eight to 10 months there, it's 60 days out there. Or even compensation, simple things.
You have very low fixed pay, very high risk pay. You have a completely different set of people, much more undergrads, like here you have far more, what I call top school MBAs, so the profile of people.
The second thing we realised is that you have to give them freedom to operate. So because what happens is there are far different kinds of process systems. So the four things we only look at is portfolio. We look at capital allocation, we look at quality and we look at regulatory and compliance. The rest, they have the freedom to operate. We also realise that different sets of mindset of people work in. So if I look at typical leadership in these businesses, an interesting thing is that it has also offered avenues for a lot of, like we have four companies, therefore potentially four new business ads. Beardo, I took a punt, by the way, Beardo first CEO, when we took over Beardo in 2020, was a management trainee of ours. He has worked in legacy brands for 14 years, but I think attitudinally he was an entrepreneur. And he did it. But what we are looking at now is a set of people who have perhaps started their lives in CPG, but experienced new age, the companies and then wanting to go to a digital company. Because if you have been just working in a traditional set for say 15-20 years or 10 years, it's very difficult to adopt, you know. And we have consciously kept their head offices away from the Marico head office.
So Beardo is in Ahmedabad, Just Herbs is in Chandigarh, Plix operates out of Bombay, but a different office, True Elements operates out of Thane and we let it be. So I think that has helped. And I think one has to have the humility to say that, okay, I have been a great successful company, but I don't want to impose all system processes in that, let it thrive.
And the other interesting thing we did was, we take nowadays, of course, Beardo started with the minority stake, but we take the majority stake, but we let the founder run it, and learn from them rather than take it up from day one, you know,
Or allow them to go away
So they operate for three years, that helps us also, you know, understand the company better, integrate it better. And I think that has helped tremendously. Because to me, that has been, if I look at the entire growth agenda of Marico, in 2020, our diversified part of the portfolio, which is food, digital and premium personal care was 6%. Today, it's 20%. It perhaps will be 25% by 2030. Because see, if I have a double digit revenue growth ambition, you need to diversify. But more than the intent to diversify, how do you create an enabling environment and culture for the diversification of these businesses to thrive?
So you talked about this 60-day make-or-break kind of approach. So Beardo is a success and many of the other brands as well. What's an example of something that didn't work?
Within Beardo, obviously, I might be launching 100 things, 50 won't work. But I think the good thing is that you start small, and have the, you know, you need to embrace reality and say it will not work. Now, what happens in a large company is that you only do few things with skill. There, even to check, if we do go through the traditional system of mass market, to check whether things are working or it takes one year. So I think it's that mindset to say that, so far, I mean, we have been lucky. Our success rate in our digital has been 100%.
So when you say 100%, you mean all the four?
All the four we have, which two we have 100%, two we have a majority in terms of our assumptions. And our business plan is fairly on track and above track. And as I said, that we must be the only one of the very few digital brands which are making money, we are profitable. And the reason it's profitable is also because that there is always a synergy of all the four brands and they can always tap the expertise of Marico as and when they want to.
So how does this equation work? So you have the traditional mother brands and then you have the digital brands. So is the company going in a way that these digital brands could one day potentially become bigger than the offline brands or do they all need to run together to make the company what it is?
They need to run together. See at the end of the day, core has to deliver growth because they are resource engines for us to invest behind this one. And that's why we ensure that it's not a resource allocation at the expense of others. And we almost see, you know, Marico, these are engine one and engine two running parallel. And within engine one also, I think we have been a little more different in food because sometimes new food business also requires different capabilities because now we are getting into snacking, experimenting with some other things. So therefore, they also require different capabilities. So I think… so I see three engines because the international business and other engine, we have a fairly profitable and a successful international business. So almost three engines running. Indian companies are very lucky that their home market is still invest to grow market. A lot of Western companies, you know, especially in Europe, obviously, where their home markets are saturated, the need for international diversification is imperative. For us, it is an end.
So the digital part, is it like a flanking strategy as things stand today? I mean, because we don't know how it will grow and where it will grow. And is it going in a way that let's say this could be more profitable or give you some kind of brand benefits or brand rub offs? How does it sit today? I know it's an experiment in some ways, which is successful. But if you were to look at it strategically, where is it sitting today as?
So I'm investing ahead of the future, looking at developed markets, which has seen digital brands getting scale and therefore taking away growth opportunities from traditional brands. So I'm securing growth. I'm investing and creating long term future capability. And someday we believe that that will also infuse these capabilities and culture into my mothership in order to improve agility, in order to improve creativity, in order to improve speed and other things. So I think it's, see if I have to secure long term growth, see what happens in growth? Why do companies have a stall point? Companies have a stall point because, especially companies who are market leaders, they get complacent.
They don't innovate. They don't diversify. Or they start making supernormal profits.
And these are the four drivers of, you know. And what we have done is we believe that if we hadn't diversified, our long term growth would have been under this one.
Therefore, what we have opened up is two, three, this one and around two, three different avenues of growth and say that how do I secure long term growth? And the other interesting thing you must realise is that, you know, we are not a, we are emerging market MNC, I mean, we are not a global company. We compete with, in our sector, we compete with really top notch global companies for talent. It is extremely important for an organisation to grow. Growth is oxygen. Growth means talent, opportunities for talent. And therefore, it is very, very critical that we grow.
So let's talk about foods for some time. So Saffola is the mother brand again. And you said you're looking at newer areas like snacking. I don't know if it's under Saffola, but it is foods. Tell us about the foods journey from oils to foods, which is from cooking oil to foods and including, let's say things like oats and so on. And what are the key takeaways at this point of time?
So if I look at, again, the journey of Saffola, we started with edible oil and it was on heart health. And it was almost seen as a therapeutic space. If you see the old Saffola ad on heart attack. Now we moved it from therapeutic to more of a preventive space. And then we said that, hey, listen, this is a brand with huge equity, but it is under-leveraged because this brand is into a category which is oil, which is less evil, and it's a health brand. So what this brand can get into? And therefore, we said that Saffola is basically a brand which is targeted at people who want to have a healthier way of life. They are typically people who are 35 plus, and more conscious about health. They are into healthier living in terms of food habits, and exercise. What are the kinds of products they consume? And can Saffola be a part of their lives? And therefore, Saffola offers better for you alternatives. So if you really look at it, it has been a very methodical expansion.
Of course, during COVID, we went a little here and there, but I'm just a tactical opportunity. But it started off with oats. And we realised that oats is, again, a very, very healthy grain. Having said that, the oats habit was very Western and Indians don't like having cold milk because Indians like something savoury, Indian doesn't like bland. So we moved it to savoury oats, which is masala oats. Then we realised why restrict ourselves to breakfast? Because India, the largest meal location is due to snacking in between meals.
Because Indians sometimes snack at 11 o'clock or 6 o'clock. Because Indians have dinner late. So can I participate in that? So therefore, that has been the oat journey.
And now we have launched masala millets, which is again a grain based journey where you can participate in breakfast and in between meals. Honey was a tactical opportunity during COVID actually. Again, Saffola, logically, can it stay with immunity? The third platform is snacking. We have gone into millet-based snacks. There's a sub-brand called Saffola Crunchies. We've also brand noodles, which are available again.
The fourth is the plant protein where we are into soya. In India, we believe that plant protein is used by vegetarians as a substitute and opposed to mock meat. Because mock meat journey in India is going to be restrictive. Now, what do you want to do with Saffola is that, you know, if I look at it, I can't get into the brand, can get into only better for you health. Similarly, I can't, my distribution is very urban. I don't want to get into, you know, a distribution of say, a pan outlet or some impulse outlets. Neither can I do cold chain. So we have defined ourselves to say that if I have to expand the brand, I have to go to the same set of consumers, the same set of distribution, the same set of supply chain capabilities. And if you look at it, mostly it's oats plus millets, you know, that space which we are doing. And as you know, as a company, we are very good at procuring, procurement of eggs. So we have kept those capabilities, this one. I don't see ourselves, do I see ourselves getting into biscuits? No. Same time, I don't want to get into staples, branded staples, because they don't make that much margin. It's a scale based, this one in a separate capability.
Subsequently also acquired this brand called True Elements. And True Elements is something which is again a premium. So again into health. It is into grains.
It is into mixtures. One of the successful products is, you know, we have gone into things like chiki. So if you look at in India, one of the thing in food has a significantly bigger runway because a lot of other packaged foods is, you know, penetration is low.
People are wanting health. People are wanting better packaged hygienic opportunities. So, I mean, there are a lot of unbranded snacking markets that exist. You know, one of the biggest inspiration we get from designing products, you know, are these outlets like Neelam Foodland and all in Bombay. You go there and you see people shopping habits. They are buying so many healthy snacks. So can brands like Saffola and others, you know, or True Elements then leverage those? So it's a two brand journey. And we believe that we started off sub 200 in 2020. We have become 4X nearly. We want to double every three years. And the interesting part of it is that today in the Saffola master brand, 70% is oil. 70-72%, 28% is foods. Next three years will be 50-50. Maybe in the next five to seven years, it will be a food brand rather than edible oil brand.
So, you know, we are at an interesting stage because I think in some sectors, at least, we seem to be seeing the end of the big post COVID spending splurge. And it seems to be evening out. This was also the period that saw the premiumization and companies and brands moving towards that, creating either products or offerings that were aimed at more premium consumption, consumers and so on. Where are things today?
If you ask me in India, urban consumption at the top of pyramid is still robust.
I think what happened post COVID is, and it's because of easy money, a lot of so-called founder-driven brands splurged and did growth that was not sustainable. And there were obscene discounts. So I think what will happen is that today capital is still available, but it's available for the quality players. So I think there will be more sanity in that. And also, I think even some of the e-commerce players, I think there is a certain expectation of profitability for everybody. I think there will be much more sanity about it.
But if I look at today, you know, Indians continuing, and we are having decent economic growth, with this economic growth, I think people want to aspire. But yes, people will want more value. People, as I said earlier, want to specifically spend on looking good.
People want to stay young, stay healthy. I think as long as you're, you know, giving benefit. And the other interesting thing is the Indian consumer is still value-seeking.
And the value-seeking is different for different categories. But I think…I think what I think will happen now is quality players or players with robust models will thrive more.
So you're saying premiumisation as a trend will continue as we've been seeing it in the last couple of years at least, and you don't see that changing. And you're saying that within foods, for example, you're saying you're transiting or trying to transit more from oils to more foods, foods. And within that, you said Chikki. Do you have a brand for that?
No, no. We are expanding with Chikki in True Elements. I'm just saying that there's in any category in foods, there's a large unorganised sector. Now, how do you make that into unorganised to organise it? That is the biggest driver of growth for the future for food companies.
Got it. OK, so let me come to another point. As you've bought all these companies and you laid out the architecture, you said that most of them are sitting outside. They have separate teams, maybe separate CEOs, and they continue to have the same culture that they did. I'm sure there is a temptation every now and then to bring them into the fold and maybe there's equal resistance from them. So how do you manage that?
I think one of the things is that we are driving synergies within those four. So, for example, can I have common logistics, common tech stack? Can you tap on to the sourcing capabilities of Marico? I think as long as they add value, I think they will tap on to. So there are certain things, as I said, which are very true ethos of Marico, which we definitely deploy in the organisation. This organisation stands for meritocracy, stands for transparency, openness, and a high degree of consumer centricity. We have this concept called founder's mentality, which says that if you are empowered, you have ownership, you think like a founder. So some of these also we ensure that there's a commonality in this. I think so far the experiment has been good. I think simply because it's been highly synergistic. And to give you an example, today we see a lot of synergies and learning from each other that is happening. I think as long as we try to, you know, keep this ecosystem, it will work. Now, obviously, someday the digital business will be at two and a half thousand, three thousand crores. Now, that time we'll see, is it almost like a company two within the Marico system? But that's something it will take.
So you talked about Neelam Foodland as a store. So this is more a question to you. So where do you pick up your cues?
I think to me, I spend a lot of time browsing, you know, looking at some of the e-commerce sites whenever I do shopping. I think one of the things I believe the biggest ideas come from is when you visit consumers or visit trade. And one of the things I really do is also spend time noticing shopper behaviour. The shopper behaviour is very, very important. And I believe for anybody to succeed, you have to be much more outside in picking ideas rather than… See, I think everybody is very good at, you know, making PowerPoints and staying at. I think to me, the biggest ideas come from talking to people, talking to partners, distributors, market visits, and trade visits. And I think they're the best ideas come from it. I would encourage people.
In fact, I was just talking to some of my sales leaders just in the morning and I was telling them that unless you are there 12 to 15 days in the market… You know, there you know what is happening because a lot of initiatives happen from my HO, you know, but ultimately that last guy on the last mile guy. I keep on telling them he can only…you can ask him to only do three things or five things. So I believe that it's extremely important for everybody, all leaders to actually spend time with the last mile, whether it's distributors, partners, retailers, or consumers.
What’s the example or one example of a signal that you've picked up recently, which makes you, let's say, think twice, question, go back to.
So I think we have an early trend spotting, which we do. And I'll tell you upfront what has been my biggest miss and therefore will not allow it to happen. I think, as you know, Mama Earth did honey and oil and they have been very successful. We should have done it. And after that, I have said in this organisation that in the categories where I dominate, ability to spot a trend and jump onto it should be mine. And I think to me, the reverse is also true. For example, I'll give you an example of it. You know, whenever there is high food inflation at the bottom of pyramid, people start titrating. And I think you have the moment you have high food inflation, one of the learnings has been be careful about price increases. See, one of the interesting things about the emerging market is that volumes is the most important thing. If you drive volume, sustainable volume, not…. margins will follow.
So I think one of the learnings has been sometimes to see for other factors…Like, for example, if there's a 20 percent input cost increase, depending on food inflation and other economic factors, your pricing decision should be influenced and not by just that, you know, that simple thing. So the ability to take that into account is, you know, very, very important.
You know, and coming back to the signal and one of my last questions. So, you know, I was looking at the automobile industry and I was talking to the dealers and I've been consistently talking to them for the last seven months. They've been talking about inventory pileup. Now, obviously, an inventory pileup over time, it's now over 80 days, means that there is something fundamentally wrong in demand. But that interpretation of the signal does not seem to have been transmitted so clearly to the manufacturers or they did not. They chose to ignore it. So I'm just wondering, does this happen often? I'm sure it happens, but does this happen? How do you guard against something like that?
I think you need to have neutral data points, multiple data points, because sometimes you can hear your own noise in the system. I think the ability to, you know, get into multiple data points is extremely important. So if I look at today's world, I keep on telling people that there are two very critical things for leaders of today.
Obviously, you have to have resilience, you have to have agility. But two things which I believe in the post-COVID world where black swan is embedded into today, any risk management, you know, COVID happened, Ukraine happened, you know, is that your sense. The sense means the ability to spot an opportunity or a threat. It could be a slowdown. It could be the reverse also. How do you see those signals? Grip is having that control to say that whatever I promise, I deliver it. Having that sense, like I tell my people that by the mid-month, I know how the month is going. If you don't know, either you are trying, living in hope or you're not taking action. So I think the more you work and the more you have an expertise and this one, I think there is an algo in your brain that starts working and to say that is there an opportunity or a problem. And sometimes what happens, past successes makes you blind or complacent that you get shackled by those and saying that. So if you ask me, in 2020, had we not reinvented ourselves, our growth trajectory would have been different.
So last question. So I mean, this is the MBA question or young MBA question. So you talked about going to the market, spending time. You quoted the name of a store. I don't know whether you actually go there.
I used to go there once in a fortnight. Now it's reduced.
Lever sends young MBAs to Etawah. So what's your equivalent? Even in thought, where would you want people to spend time? Today, in this world, where you talk about this dual engine, D2C.
I think there is no substitute for personal discipline and getting that experience.
And I believe that in your formative years, see a lot of today's young generation want varied experiences. But to me, still now, depth is very important. So in any role, if you have to create an impact, the first six months you learn or 12 months and then the next 12 months you contribute. So that has not changed. To me, that is most important that in your formative years, if you… And I think work-life balance is something which is critical, but you have to find and seek on it. And I have my only advice to youngsters.
I give it to all my team members and everybody. If you choose a profession or choose something, you will find your calling in the next 3-5 years and start working on something which you are good at and you like doing. And don't be influenced by peer pressure. Today, a lot of things we do are influenced by peer pressure. Because if you do something which you don't like, but you are good at, there could be things which you are good at, but you might not like. You will have a burnout. And if you like something, but you are not good at, it better be your hobby, your side hustle. It can't be your main profession. So I think to me, that is important. That whatever you do, and this is not for professionals, it's for sportsmen, people in that big world. Focus, personal discipline, I think is important.
And 6 plus 12 months, that's the critical.
I think 6 plus 12 months, you have to learn. You have to do that. I think you have to have that focus that ois important. Focus is extremely important. For every new thing you do, you have to have a stop-doing list. It's very difficult to be a champion in 15 things. I mean, okay, I mean, not everybody is a superman, but…
