Parachute coconut oil maker, Marico seems to have set out in grooming its image by making its presence felt in the fast moving consumer goods (FMCG).
Sensing tremendous potential in the segment, the company has fully acquired Berado, a startup company which operates into the men’s grooming market, by buying 55% additional shares, a move which will help FMCG firm to extend its play into the segment.
The move is a complete surprise, considering the fact that Marico had planned to “prioritise” on food and hygiene segments through Saffola and other brands, including new ones. The premiumisation drives across categories such as male grooming was suppose to take a back seat, at least for this fiscal.
Marico has acquired the remaining 55% share of Zed Lifestyle, Berado’s parent firm, in an all-cash deal, making a step-down company.
The investment makes the investee company (Zed Lifestyle) a wholly-owned subsidiary of Marico and gives Marico a complete control over the operations of the investee company.
Venture Catalysts (VCats), an integrated incubator and accelerator platform, also announced a complete exit from Zed Lifestyle after the acquisition of its portfolio company Beardo by Marico.
Marico had made an investment in the company in March 2017, which was equivalent to 45% of the issued and paid-up share capital of Zed Lifestyle.
Beardo, which sells beard oils, beard waxes, soaps, and other products for men’s facial hair, had a turnover of Rs 78.49 crore in FY 2019-20.
Founded by Ashutosh Valani and Priyank Shah in 2015, Berado is one of VCat’s earliest bets.
Marico’s entry into the health and hygiene segment has been strategically planned.
Saffola Edible Oils and foods have been growing year-on-year over last year while Parachute, amongst Marico’s major brands, has managed to maintain average sales of FY20 for the first two months.
Premium hair nourishment and male grooming volumes declined by 19% and 9%, respectively, in Q4 FY20. These continue to be weak with lower discretionary spends being expected.
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