Adani Wilmar’s continuing double-digit growth

The changing health preferences and surging penetration of processed foods drive the country’s edible oil consumption. According to reports published before the onset of Covid-19, the Indian edible oil market was forecast to grow from US$ 21.5 billion (approximately Rs 1.5 lakh crore) in 2019 to over US$ 35 billion (about Rs 2.5 lakh crore) by 2025. “Adani Wilmar is the market leader in the Indian edible oil segment with over 20% share,” says Ajay Motwani, marketing head, Adani Wilmar.

One of the fastest-growing food FMCG companies in the country, Ahmedabad headquartered Adani Wilmar (AWL), is a joint venture stemming from January 1999 between the multifaceted Adani Group and Wilmar International – Singapore, Asia’s leading agribusiness group.

Adani Wilmar has expanded its initial edible oil portfolio to several other food items. Its products include famous brands such as Fortune, King’s, Bullet, Raag, Avsar, Pilaf, Jubilee, Fryola, Alpha, Alife, and Aadhar. Motwani explains, “We are constantly expanding our product portfolio, and also increasing our presence by launching in newer markets. Recently, we entered the personal care segment with the launch of Alife Soap. All our products are doing very well, but the edible oil segment is growing the fastest among all.”

Edible oil market & consumer trends

The demand for branded edible oils has shown strong growth in recent years. Studies suggest that more customers opt for branded oils in place of non-branded ones with a change in preferences driven by a growing middle class, rising disposable incomes, and better awareness.

Motwani believes that the branded edible oil segment will continue to grow at a healthy rate. “Fortune as a brand has been very well received in urban markets and rural markets. For us, growth in rural markets is twice that in the urban markets.”

Adani Wilmar has voluntarily participated in the ‘fortifying edible oils’ initiative by FSSAI and fortified its edible oils with Vitamin A and Vitamin D.

Edible oil manufacturers in India

While India is a huge edible oil market, the considerable difference between packed and loose products leads to the sale of many unhygienic, substandard, and adulterated products. Speaking of challenges, Motwani says, “From the time of our inception and entry in the edible oil sector to date, it has been quite challenging to educate the consumers about the benefits of buying branded products.”

“Another challenge is competing with various brands at a regional level that do not follow proper taxation norms, and FSSAI requirements, which in turn makes them cheaper compared to us. Nevertheless, we have held to our commitment to serving our consumers with quality products.” According to Motwani, the loose product (fill on demand) market needs to be curtailed, and more focus should be given on the packed products to ensure hygiene and promise better quality.

Shift in consumer preference to value packs

The Covid-19 disruption has had an adverse impact across businesses, and the FMCG sector is no exception. The key challenges faced by Adani Wilmar because of the extended lockdowns included the impact on production due to workforce shortage, disruption in the supply chain and distribution logistics, lack of packaging materials, and others.

“All products, including edible oil, were impacted. However, customers’ panic buying in later stages of the lockdown led to higher demand for various essential products. We have also seen a shift in the consumption pattern as more customers are now buying value packs. While the FMCG sector is better placed than others, nevertheless, growth will be hurt.”

Business and export

According to Motwani, the company has experienced double-digit growth for many years and is confident of maintaining it in the future. “Business has taken a hit in the first quarter because of the extended nationwide lockdown due to the Covid-19 pandemic, but we see a rise in demand. We expect to return to pre-Covid sales levels in the coming months.”

AWL’s export division commenced operations in 2004. It has extended its footprint across the world, including the United States, Canada, Middle Eastern countries, South-East Asian nations, and Africa. “In a short period, Adani Wilmar has been awarded Trading House status by the Government of India,” he says.

Strengthen branded customer base

Motwani adds, “The target for this year is to increase the branded customer base in categories like atta, basmati rice, non-basmati rice, and besan. The focus will be to gain share in these categories and strengthen its position in branded commodities.”

With the introduction of innovative products like Rice Bran oil or Vivo Pro Sugar Conscious Oil for managing blood sugar levels and sugar-related complications, the company aims to continue progressing on research-led innovative concepts. He concludes, “We will continue to supply high-quality products at extremely competitive rates. We will continue to innovate and expand our product portfolio and offerings to meet customers’ requirements and expectations and emerge as the preferred food brand of India!”