Adani Wilmar witnessed double-digit volume growth and an increase in its rural sales in the September quarter (Q2FY24), the Adani Group's FMCG company said on October 5. Large opportunities in packaged staple foods and strong execution boosted the volume growth, the company said.
While the volume growth was strong in the period under review, the sales value has dropped compared to the same period last year due to a sharp fall in global edible oil prices. "The profitability for the quarter remained under stress due to divergent trends in the spot and future prices of edible oils," the company said.
The edible oil segment volumes grew by around 5% year-on-year, and the branded business volumes grew at a rate of 12%. The volume in the first half of the current fiscal grew by around 16%, compared to the same period last year.
The company noted that volumes in the edible oil segment in the second half of a fiscal are relatively better than the first half on account of seasonality, particularly due to higher demand arising from out-of-home and festive consumption.
The food and FMCG segment — which involves products such as wheat flours, rice, pulses, gram flour, sugar, soya chunks, poha and soap — contributed nearly 80% to the overall segment revenue in the second quarter of the current fiscal. In the domestic market, the revenue from branded products has been growing at a rate of more that 40% year-on-year for the last eight quarters, the company said.
The company had seen a 55% growth in revenue in the previous fiscal in the food and FMCG segment.
The FMCG major is focusing on gaining "fair share of the market" in the South where its presence has been weak. The company added that improved presence in the South with Fortune Sunflower oil and Fortune Chakki Fresh Atta will boost the sale of other food products in the region.
Adani Wilmar markets rice under two brand, Kohinoor and Fortune. The Kohinoor brand has crossed ₹250 crore revenue milestone on last 12-month sales basis. It noted that this rise is despite the decline in revenue due to restrictions on rice exports.
The company also introduced a ready-to-cook ‘Lucknowi’ variant of ‘Kohinoor Biryani kit,’ and a ‘Fortune Biryani Kit’ for the exports markets to cater to the Indian diaspora in UAE, Singapore, Mauritius etc. Further, it launched brown rice under the Kohinoor brand.
The company leased new manufacturing units during the quarter to cater to the increase in wheat and rice demand.
The food and FMCG segment revenue amounted to ₹4,300 crore in the last one year, and contributed nearly 10 percent to the company’s standalone revenue in the second quarter.
Adani Wilmar attributed strong execution in alternate channels (modern trade and e-com), in close collaboration with the channel partners, to be the reason behind higher growth rates in these channels for both oils and foods.
The company’s direct distribution reached 6.5 lakh retail outlets during the quarter — expanding its distribution network to 31 cities via hotels, restaurants and catering.
