Marico acquires majority stake in ayurvedic beauty brand Just Herbs

FMCG major Marico on July 14 announced a strategic investment in Apcos Naturals Private Limited with an acquisition of a 60 percent equity stake for an undisclosed consideration. Apcos Naturals Private Limited is the maker of ayurvedic beauty brands Just Herbs, co-founded by CEO Arush Chopra and Brand Director Megha Sabhlok, in 2010.

Marico for the last some years has been scouting for acquisitions in the digital-first and direct-to-consumer (D2C) segment, which has witnessed the growth of several brands of late, especially, in the grooming segment. The company earlier this year completed the acquisition of men’s grooming start-up Beardo.

“This investment is another step towards our aspiration to build a portfolio of at least three Rs 100-crore plus digital brands within the next three years,” said Saugata Gupta, MD and CEO, Marico.

Over the last few years, the maker of Parachute and Saffola has doubled down on the digital channel and has launched several digital-first brands such as Saffola Fittify and Coco Soul. It had also introduced its D2C platform Saffola Stores last year.

The platform currently has a small contribution to Marico’s overall revenue, however, is expected to pick up pace going ahead,” Chief Financial Officer Pawan Agrawal had told Moneycontrol in a conversation.

Overall, the company has seen increased sales from e-commerce in the wake of the COVID-19 pandemic and it contributed 8 percent to its sales as compared to 5 percent a year ago.

The acquisition of digital brands such as Just Herbs is a part of the company’s game plan to get a foothold in the e-commerce segment as well.

Lately, several FMCG companies have made a beeline for D2C companies. At the end of June, FMCG major Emami upped its game in the male grooming segment by further acquiring over 12 percent stake in Helios Lifestyle, known for its flagship male grooming brand The Man Company. British consumer goods giant Reckitt had invested Rs 45 crore in Bombay Shaving Company in February, while another player Wipro Consumer Care backs LetsShave and Ustraa.

Besides its own D2C website, Just Herbs is also available on online marketplaces (Amazon, Flipkart and Nykaa) and its exclusive offline stores in select cities. The brand competes with a host of start-ups such as Mamaearth, MotherSparsh, Skinkraft, and Plum, which also cater to the same set of audiences. Most of the brands are positioned in the mid-premium to premium segment offer consumer products that are organic, ayurvedic, cruelty and chemicals free.

According to a 2020 report by Avendus Capital, beauty and personal care will be a $30 billion market by 2025, out of which digital-first brands could have a $10-15 billion share.