Dermicool soaps? Emami bets on legacy brand extensions to fuel growth

The move will see the Kolkata-based company extend its established brands, including Dermicool and Kesh King, into new categories such as soaps and wellness, signaling a strategic shift to capture a larger share of India's burgeoning consumer market and ensure sustained growth.

Emami recently extended its Smart and Handsome cream into the wider male grooming segment and is chasing similar expansions for other brands to increase their addressable market size and consumer relevance.

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“Our growth strategy is very clear—how do we make our legacy brands bigger. There are two or three areas to make them bigger. One is, how do we make our existing products grow faster. Number two is, how can we extend those brands via premiumization or targeting different sets of audience and selling through different channels," Harsha V. Agarwal, vice chairman and managing director, said in an interview with Mint.

Earlier this year, the company renamed its almost two-decade-old male grooming brand Fair and Handsome to Smart and Handsome with plans to tap into a broader male grooming market that is set to expand to  ₹32,000 crore over the coming years.

For instance, it has launched soaps, cooling gels and specialized powders under its talc brand Dermicool that it acquired in 2022. It recently launched a ₹1 talcum sachet under its Navratna cooling oil brand, expanding it from oils to powders apart from adding more expensive therapeutic oils under the brand.

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“We are relooking at our entire portfolio of our brands, be it Navratna, Dermicool—brands that are summer-focused.  When we took over (Dermicool), it was only one product brand i.e. talcs—now we are doing specializations like active talcs targeting those into sports etc. Apart from that, we have launched a summer gel and soaps. The point is to expand the overall market as well as play to the overall strength of our brands," he added.

This aligns with a broader trend among large packaged goods companies that are chasing growth by entering previously untapped categories amidst intense competition. Rivals such as Dabur, Marico and Hindustan Unilever have similarly extended their core brands.

For example, Hindustan Unilever now offers peanut butter under its Kissan brand, while Marico has established a significant foods business under the Saffola oil brand.

In FY24, Emami reported a 5% increase in revenue to ₹3,578 crore and a 13% rise in net profit to ₹724 crore. Despite its portfolio of well-known brands like Navratna, Zandu, Boroplus and Kesh King, the over 50-year-old company's overall business remains relatively smaller than domestic peers.

“There is a very clear target, whether we can take Navratna to ₹1,000 crore in the next two to three years or can Dermicool reach ₹500 crore mark in next three years," he added.

Although Emami doesn't disclose individual brand performance, the cooling oil market is estimated at ₹1,048 crore, with Navratna cool oil holding a 62.8% share by volume.

“You will see a lot of activities in all our brands, particularly in Dermicool we are very, very aggressive. From the new product perspective, a lot of work is happening in brands like Kesh King, Boroplus, Navartna etc," he added.

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Agarwal also acknowledged greater competition in the market that he said is prompting companies to step up innovation.

Emami has all also had a string of acquisitions over the years—in 2015, it acquired the hair and scalp care business of Kesh King for ₹1,684 crore. It acquired the Dermicool brand from Reckitt for ₹432 crore. Emami has over the years invested in Helios Lifestyle Pvt Ltd, which owns the men's grooming brand The Man Company. In 2023, Emami entered the juice category by acquiring a 26% stake in Axiom Ayurveda. In 2022, it bought a 30% stake in Cannis Lupus Services India, a pet care startup, among other investments.

On future acquisitions, Agarwal said the company was “open to all kinds of acquisitions".

Emami Ltd is part of the Emami Group, which operates in healthcare, real estate, cement and retail, among other sectors.