FMCG major Dabur India expects strong consumer demand for Ayurvedic healthcare products and medicines to make up for any loss in the discretionary products business in case the COVID-19 pandemic worsens, according to company Chairman Amit Burman.
In his address to shareholders in the company's annual report for 2020-21, Burman said with the "emergence of the second wave and talks of another wave likely in the future, we might have to cope with the related challenges in the months to come".
"While we will remember 2020-21 for the significant challenges the year presented in the form of COVID-19, the fact remains that the pandemic is far from over," he wrote.
That said, Burman added, "We are better prepared to handle the pandemic as compared to last year. We are also applying learnings from last year on streamlining the supply chain to ensure minimal disruption in the availability of our products".
While this remains a developing situation, he said the company's factories continue to operate on a relatively normal basis.
"We are also encouraged by the strong consumer demand trends for Ayurvedic Healthcare products and medicines, which is expected to make up for any loss in the discretionary products business in case the wave worsens," Burman asserted.
After the initial period of disruption in the first quarter of FY2020-21, Dabur India made a "good recovery led by healthcare business, which saw a huge tailwind with the growing consumer demand for Ayurvedic immunity-building products", he added.
Burman also said Dabur could post a significantly strengthened performance in a 'COVID year' due to "the high degree of resilience that we built into our business through a series of consumer-centric and tactical innovations coupled with investments in adding capacity for our immunity-building portfolio of Ayurvedic medicines and products".
"Our diversified portfolio and our strong financial position helped us successfully navigate the uncharted waters of the pandemic and emerge stronger," he noted.
In response to the challenges when the pandemic broke out, he said the company had "sharpened our focus on our power brands and the Ayurvedic healthcare portfolio, besides building increased flexibility into our planning and go-to-market strategies to drive profitable growth".
Dabur India said as part of its attempts to make Ayurveda mainstream and bring it closer to consumer households, it has rolled out Dabur Arogya that "aims to provide Ayurvedic treatment for various ailments through telemedicine - capitalising our Ayurvedic know-how, panel of Ayurveda doctors and facility of online consultation".
During the lockdowns, the company said it had also initiated a series of virtual doctor engagement programmes to reach out to more than 1 lakh Ayurveda practitioners.
Citing Expert Market Research consultant services data, the company said, "The market for Ayurvedic products is expected to grow at a CAGR of 15 per cent between 2021 and 2026".
As for the company, the healthcare business contributes 39 per cent of its FMCG business and "the category witnessed a strong growth of 31.9 per cent during the year 2020-21", the annual report said.
In the last fiscal, Dabur India had posted a 10 per cent growth in consolidated revenue from operations, touching Rs 9,562 crore, while the consolidated net profit stood at Rs 1,693 crore, a 17.2 per cent jump over FY20.
In FY21, Dabur India said, it rapidly expanded its healthcare portfolio with the introduction of a range of products like health juices, immunity-boosting herbal tea, single herb tablets, and herb-induced honey, among others.
"Moving forward on this mission to make Ayurveda more mainstream and accessible to every household, Dabur has now rolled out a new retail initiative christened 'Ghar Ghar Ayurveda'," the report said.
The programme works towards increasing penetration of the company's range of products by adding stores and driving assortment through a better store programme
