INDIA – Adani Wilmar, a leading packaged food company in India has recorded a year-on-year (YoY) volume growth of 14% in the last fiscal, helping the company’s revenue to cross Rs 55,000 crore (US$6.7M) in FY23, reports ET Retail.
Adani Wilmar is a joint venture between Indian conglomerate Adani Group and Singapore’s Wilmar Group which specializes in offering most of the essential kitchen commodities including edible oil, wheat flour, rice, pulses, and sugar under the Fortune brand
The company attributes the growth to the food and FMCG sector driven by good progress in all enablers like sourcing, manufacturing, distribution, brand building, and strengthening the teams for the new products.
According to the latest regulatory document, Adani Wilmar’s revenue from the food and FMCG segment increased 55% YoY at Rs 3,800 crore led by its 40% YoY volume growth while seeding multiple new avenues of growth during the year.
The company said that the food business is scaling up its operations in India in line with its expectations, adding that, it has reported good growth in both the key categories – wheat & rice.
The company recounted that wheat prices started soaring from July 2022 onwards, prompting the government to release wheat stock in the market to increase supply, which resulted in the normalization of wheat prices.
Forecasting its sales results, the food and FMCG segment is expected to report 40% growth in volume and 60% growth in value terms in Q4.
In the edible oil segment, branded sales volume grew by 4% during the quarter, on the back of good consumer demand due to softened edible oil prices.
Adani Wilmar noted that supplies of imported edible oils have been smoother during Q4FY23 compared to the earlier part of the year. Prices have cooled off from historically high levels and have been stable, stimulating higher consumer demand, particularly in the rural population strata
However, overall edible oil sales volume was dragged down by lower demand from the bakery and frying industry.
Going forward, the company expects the strong growth to continue in both products for multi-years, given the large headroom in the kitchen essential products.
“Improvement in our overall distribution and gaining market share in the under-indexed region will be the key volume levers for the segment,” the company said.
As part of its strategy dubbed “Go to market (GTM)”, the company said it is focusing on bringing more rural towns under direct coverage, while for the existing markets, the priority is to increase retail penetration and improvement in sales productivity
Additionally, the company expects demand for packaged oils and staple foods to remain healthy despite the various macroeconomic and geopolitical events as it plans to continue to navigate the price volatilities and any supply disruptions
However, the likely occurrence of El Nino in the May-June period may affect climatic conditions and negatively impact crops