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After putting Fa on the backburner for almost a year, Jyothy Labs has decided to bring it back and re-enter the cluttered deo category this summer.
Fa belongs to Henkel and Jyothy has been the custodian of the brand in India since the time it acquired the German multinational’s business in 2011.
The Mumbai based FMCG company holds the license to sell Fa in India, Bangladesh and Srilanka. It pays royalty of 2 per cent of sales to Henkel for selling its Pril and Fa brands currently.
``We are optimistic about Fa and will be re-launching it this summer. It is a global brand but with negligible share since we have not been spending any money behind it. But now we will have Indian variants to suit the market along with a new brand manager, ’’ said K.Ullas Kamath, Joint Managing Director, Jyothy Labs.
However in the overcrowded and competitive deo category, Jyothy Labs will find it tough to re-establish Fa. It is not planning to set aside huge investments behind it.
``While there will be a new advertising campaign to support Fa, we will not be spending huge sums of money on it. It is a still a small brand valued at Rs 20 crore but we cannot afford to do away with it and have to maintain it in our portfolio. We do not mind waiting to build Fa, even if it takes five years to make it a Rs 100 crore brand,’’ added Kamath.
It would also not build extensive distribution to support Fa as it is expected to be available across 3 lakh outlets unlike Jyothy’s largest selling brand Ujala which reaches 30 lakh outlets.
Today the Rs 1,600-crore Jyothy Labs is investing mainly behind its six power brands which include Henkel brands like Henko, Margo and Pril.
Unlike big players like HUL who have taken price cuts to sustain volumes, Jyothy Labs has not been resorting to price drops in the past and does not intend doing so in future. `` While crude prices have dropped, inflation will not ease due to which we will not take any price cuts going forward,’’ he added.
With volume growth at 10 per cent during the quarter, the company attributes this growth to having a lower base and geographical expansion at a time when the FMCG industry continues to be impacted with sluggish consumer demand.
It is also open to acquiring regional brands which can go national. `` We would be happy to acquire regional brands and make established national brands out of them. Regional brands with sales turnover of about Rs 500 crore would be our target,’’ he added.
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