SIBF 2021: Marico founder Harsh Mariwala on the challenges of breaking away from a family-run business

Dubai - Carving his own success story, as documented in his new book Harsh Realities: The Making of Marico


Anamika Chatterjee

Published: Thu 4 Nov 2021, 6:57 PM

It is not easy to be a part of a family business and look at it with a critical lens. Harsh Mariwala, however, did just that. Having joined his family business that traded in edible oil, chemicals and spices in the 70s, he broke away from it and set up Marico in 1987 with an aim to professionalise the structures and convert the edible oil business into a branded one. Today, Marico is a name that’s part of every NRI household — be it Parachute coconut oil or Revive or Saffola oil. In a new book Harsh Realities: The Making of Marico, Mariwala details the difficulties he faced when he proposed financial separation from the family-run business, a prospect that also paved the way for the growth of Brand Marico. Ahead of his appearance at the Sharjah International Book Fair, Mariwala talks about his journey and what we can learn from his success — and failures.

At which point did you decide to write the book?

I had been speaking at various events, and had received a positive response every time I spoke. Often, people would come up to me and say, ‘Why don’t you write what you have spoken about?’. That led me to think about writing this book. In 2014, I stepped down as the managing director of Marico and did not have a fulltime role. It was hard to sit and do nothing. One project that I decided to take up was this book, obviously without realising how difficult it is to write one (laughs). I approached renowned management guru Prof Ram Charan and asked him to help out. He went through what was written and started giving insights into each chapter. This book is my story peppered with his nuggets of wisdom. When the pandemic came, my wife read the book and added more personal anecdotes to make it more relatable. It’s in an easy-to-read format and has a take-home value.

What sort of challenges did you face when you decided to set up Marico?

I joined business when I was only 20. It was then a typically family-managed business where my father was the chairman and three of his brothers were managing the company. We had three businesses — edible oil, spices and chemicals. At that time, the quality of talent in the business wasn’t up to the mark. There were some acquaintances who were helping with the business, which itself wasn’t doing exceedingly well, it was doing just about alright. I felt if I could turn the edible oil business from unbranded to branded, it would make the business far more sustainable in terms of growth. I started taking small steps — began to recruit the right talent and appoint distributors. In fact, every time I would recruit good talent, it’d reflect in the performance. Initially, it was a company which had many family members and hence, it was difficult to recruit because the notion was that if it is a family-run business, it may not be very professional and there might be abrupt changes. I sat down with my family members and discussed and debated what could be done. The business was divided into four parts and it was decided that each one of us would manage one business, which would give us autonomy but we would also be held accountable. There was, obviously, resistance to the idea, and it took us about two years to convince the elders. That’s how Marico was formed.

You created a niche with Parachute coconut oil. What did that journey entail?

In the early 90s and even before that, coconut oil exports were banned, so a lot of smuggling used to take place. But because the government was opening up slowly, we approached them to allow us to export coconut oil. Initially, they allowed us to do so through licensing. So once you were done exporting, say, 700 tonnes of coconut oil, you would have to apply for the license all over again. There would be delays and that wouldn’t allow us to plan properly. In a year or so, we were able to convince them to allow us to export coconut oil in small packs. And then delicensing happened. That’s how our international operations began, first with the Middle East. For us, the main area of benefit post-liberalisation was in exports. And because we could export, we began to invest more in international markets. What we also realised once we began exporting was that we could reach out to other communities, so our scope widened. Today, Parachute has multiple variants; we have tailormade our products as per the needs of the consumers.

Why did you decide to name the coconut oil brand Parachute?

The origins of the name came from World War II when parachutes would be dropped. It was something new and fascinating. So, my uncle named the brand Parachute and I did not tamper with it. When I started, Parachute would be mainly sold in 15-litre tins in retail chains who would then scoop it out and sell to the consumer. Very small amounts of oil would go in the packs. When we started selling Parachute in plastic bottles, our market share went up from 15 per cent to 50 per cent. As I started expanding, many uncles and friends asked me to change the brand name, but I decided against it.

How did opening up to international markets change the perspective of the brand?

It made us realise that it was important to diversify. But it also depends on the kind of business you are in and what is your core competency. I strongly believe that you need focus. Ours was related diversification — we stayed within the beauty and wellness framework, and developed products that fit into our distribution network. Whenever we explored geographies where distribution was different, it became difficult. We needed to leverage on our strengths. That’s why we decided to confine ourselves to beauty and wellness. In beauty, we wanted products for hair and skin; in wellness, we developed healthy foods and products. I think there is enough space for us to grow in these categories. If you look at our product portfolios, you will realise we are leading in those segments. For instance, in the shampoo segment, we are only present in the anti-lice shampoo category (Mediker) because other big players will not get into it, and we cannot become market leaders in the broad categories of shampoos because that’s where the MNCs are very strong and there are multiple brands.

How has the pandemic shaped beauty and wellness sectors?

When people do not go out, there is a slim chance that people would use these products. For instance, a hair cream or a deodorant will not be used if you are not going out to meet anyone. But we have been active in healthy foods segment as well, and those products have been flying. So, some categories have suffered while others have witnessed growth.

What is the toughest part of writing a memoir?

Giving true and fair picture of your journey, which is never easy. I had to be very transparent. The book is peppered with anecdotes of my failures. But with every failure came an important learning. But when I sat down to write, I wondered what would people think of me — this is a man who has built this business but also failed multiple times. Secondly, writing about when the business got separated. It was a management separation initially where we had differences of opinion. I have taken care not to name names. I have also had to take hard decisions on some people who worked with me but were not able to perform over a period of time. Finally, the time I stepped down as the managing director. It was quite a defining moment in my life.

You emphasise on talent and put it at the centre of your enterprise. With the Great Resignation being a worldwide phenomenon right now where people are quitting en masse, is it an important learning for businesses to value their staff?

I have always felt many CEOs and family entrepreneurs don’t take talent seriously. Whenever I have invested in good talent, it has shown extraordinary results. First, you have to realise that there is a war for talent because good talent is limited and everyone wants to grab them. You have to market yourself as a good employer and spell out why it is important for a candidate to join you, how they will benefit. Basically, you have to create value proposition for a prospective employee, and a lot of it happens through word of mouth. Our job is to create good brand ambassadors and have talent flourish in a good office atmosphere.

The journey of Marico also reflects on the journey of the modern Indian consumer. How has s/he changed?

Earlier, we were selling products to a family. Now we are selling to an individual. Earlier, a housewife would probably buy products for everyone, now an individual buys things for himself or herself. The recent trend also is that younger customers want a brand that’s more conscious, so brand purpose has become very important.

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