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“We have to move at the speed of culture,” says L’Oreal’s Asmita Dubey who has spent years driving the digitalisation of the world’s largest beauty company. In a wide-ranging exclusive interview with Storyboard18's Delshad Irani, Dubey, who is the chief digital and marketing officer of the global beauty juggernaut, talks about disruptive consumer trends and creating experiences that marry online, offline and on-chain worlds. She also shares her views on the shift from social to equitable and empowered communities, Live and Conversational commerce, exploring Web3 worlds and venturing into the metaverse at a time when it’s hit a few snags. 

Edited for length and clarity. 

How is the recovery phase going for L'Oréal after the pandemic hiatus?

Beauty is social by nature. When we talk about the post-pandemic world, people are coming together and meeting each other, and that is a social interaction. In that sense, there is a lot of positive excitement around beauty and fragrance and we're seeing lots of growth. The other thing from a consumer sentiment point of view is health and wellness and concerns about that. Therefore, our dermatology and dermatological skincare business is seeing exceptional growth everywhere. So all in all, we are coming back from the pandemic very well. The beauty market has grown about 6 percent year-on-year this year, globally. Our ability to outperform the market has been great. We've been growing across divisions and zones, and we are gaining market share. 

The Indian beauty industry’s potentially so huge. The penetration in categories is growing everywhere. We have beautiful brands like L'Oréal Paris, Maybelline, Garnier and Lancôme, and even on the haircare and hair color side. So we feel very optimistic about the Indian beauty market and again we have outperformed the market.

What are the key consumer trends that you are focused on? 

We have to move at the speed of culture because so much is changing around us. Post pandemic, there is a social and relationship reset. A lot of people are thinking that we need to move from casual to close relationship, quantity to quality in terms of relationship and that impacts the way they are interacting. That impacts the ecosystem in which we are playing. So I'm coming a bit to the digital side of it. There are almost 5 billion people that are online now and India has more than 800 million people who are online. So the social ecosystems are changing because of the social reset that has happened. Then there is the Gen Z and from their point of view what matters most to them. What matters to them is authenticity and proximity. They are also heading out more in the metaverse and gaming. There is a lot of social concern in terms of sustainability and radical inclusivity. At the same time, there is a need for a personalized, relevant, individual beauty. And what we do today in beauty tech, with data and AI, allows us to offer something very unique and individual.



<blockquote>There are new epicenters of influence that are growing. We are continuously moving from social following to more equitable and empowered communities… the digital transformation itself is transmuting from digitalization to virtualization, from Web2 to Web3. So creation is moving from social to empowered equitable communities.</blockquote>



Can you elaborate on the trend of ‘radical inclusivity’? 

We believe that the future of beauty is diverse and inclusive and it is sustainable, committed and generous. The future of beauty will be fueled by innovation. It will be nurtured by science. It will be powered by tech. And what we are doing is shaping that future with science, technology and creativity. So all of that is helping us to bring that personalized, unique beauty for everybody. And I can pivot to the point of pioneering Beauty Tech and moving from products to services. We are offering a lot of services to our consumers today. Services like fragrance finders and virtual trials, which are based on augmented reality. These services are both offline and online. For our brand Lancôme, for instance, we have the skin diagnostic service that’s available at the counter in store and it is an online diagnostics. You take a 360 image and it analyzes the skin and gives you routines that are personalized. So that brings an extremely personalized beauty that the consumer is looking for. They look for relevance in the offerings.

Watch the interview here: <a href="https://www.moneycontrol.com/storyboard18/watch-listen/loreals-global-marketing-chief-asmita-dubey-on-beauty-tech-radical-inclusivity-big-consumer-trends-3877.htm">L'Oreal's global marketing chief Asmita Dubey on beauty tech, "radical inclusivity", big consumer trends </a>

Social and live commerce presents exciting opportunities for marketers especially in countries like India that are witnessing a digital surge. What is L'Oréal doing on that front? Are you excited about the prospects here? 

We have been experimenting with some fantastic social commerce models because it is an opportunity for our consumers and our prescribers - beauty advisors, the dermatologist, the hairstylist, to get closer to our consumer, but then also offer products and services to them. And maybe make a sale. There can be different business models on social commerce. The first one can be on the platform itself. So if you look at a market like China or Indonesia, TikTok and the commerce there tends to be very interesting. That is the platform commerce. 

There's also affiliate commerce with our partners, where it need not be an external platform, but we could be bringing them together. So the Experts Salon Care in India for our professional products division happened during the pandemic, actually. The salons were closed and we had the whole ecosystem of hair stylists, salons, consumers who wanted to connect with each other and who wanted products. At that point, L'Oréal was the facilitator. What we did was we said we will provide you a platform (on WhatsApp) in which you can come together, share the products, have the conversation, find something, and get it. That is the business model. It now moves into services where they can do a booking there and create a deeper relationship with the consumer.



<blockquote>It is a charged digital space. More than 15 percent of the economy today is based on the digital economy. There are 5 billion people that are online today. And over the coming years it will become 7.5 billion, which means 90 percent of the world will be online. So that direction of change and that positive charge will continue.</blockquote>

 

What is working well in India, and that’s also because WhatsApp is for everybody in India, is what you call conversational commerce. It is really growing and here we are working with a lot of our partners to look at what conversational commerce means. How do we empower our consumers and prescribers to have the conversation, create the relationship and then be able to sell a product or give information or offer a service. And the last point is things like live streaming or live shopping. These are just tools to be able to do all that well. In fact, we do more than 10,000 live streams in a year! 

As a marketer what’s your take on influencer marketing coming under greater scrutiny from consumers and governments that are calling for more regulation?

There are new epicenters of influence that are growing. We are continuously moving from social following to more equitable and empowered communities, which means that we are moving into more personalization and more relevance. Individuals talking to each other or more opportunities for individuals to talk to each other. Because the digital transformation itself is transmuting from digitalization to virtualization, from Web2 to Web3. So creation is moving from social to empowered equitable communities, from a look-down smartphone to probably new unabashedly face-forward devices. So, we will have to be prepared for a world which behaves a bit differently. 

We work with a lot of influencers and brand ambassadors - some of them are artists, some of them are stars. We work with prescribers - beauty advisors, dermatologists, makeup artists, hair stylists, and all of them have influence and all of them create advocacy for us. The way we work is we create a values charter. That value charter is available publicly and it's online. We say that these are the values on which we work. So it is an equitable, empowered community. It is about their expression of our brands, but so long as we are within those values charters, which are based on mutual respect, transparency and integrity. That's how we work with all our influences everywhere in the world.

Moving to things like NFTs and metaverse. Mark Zuckerberg’s Metaverse plans have hit a few snags. The sheen seems to be wearing off. From your vantage as a marketer, was it just the shiny new toy or is there a long term strategy in place for these new worlds?

It is a charged digital space. More than 15 percent of the economy today is based on the digital economy. There are 5 billion people that are online today. And over the coming years it will become 7.5 billion, which means 90 percent of the world will be online. So that direction of change and that positive charge will continue. 

Now, the second thing is digital infrastructure which is the backbone of the digital economy and digital infrastructure continues to grow. 5G connectivity is becoming a reality. One of the lowest 5G costs is going to be there in India. So there will be more immersive technologies that will become very mainstream and consumers will start experiencing it because of that accessibility. 

The reason I say it is a charged space is because there is innovation and in that innovation, we can talk about the metaverse, but startups are fostering innovation. And they continue to question the way we do business otherwise, whether it is the future of work or health and wellness or energy transition, all of that is digitalized. So that direction of change is just inevitable. It is going to happen. 



<blockquote>We have our feet firmly grounded in the Web2 deployment and then we are exploring Web3, the metaverse and gaming.</blockquote>



Yes, there are new digital realities. We are moving from Web 1.0 to Web2 to Web3. It is a reality which is taking shape today. And in that sense, what we are saying is that we have our feet firmly grounded in the Web2 deployment because it is about digital transformation. It is about image recognition, video, live streaming fast, cloud, data, automation, all that is very much here. So at L'Oréal our feet are firmly grounded in the deployment. And then we are exploring Web3, the metaverse and gaming. Moving from offline to online, to offline plus online plus on-chain, based on the blockchain and on the vision of Web3. It comes back to the point of empowering communities, more equality, changes in platform, a new vision. Beauty has always been about self expression. And what we are doing is exploring these new codes of beauty on the web. 

L'Oréal seems very bullish on the metaverse and the Web3 world, and committed to carving out a competitive edge there. 

In fact, we had a first-ever multi-brand beauty partnership with Ready Player Me, the leading cross-game avatar platform for the metaverse. Maybelline New York and L’Oréal Professionnel premiered exclusive makeup and hair styles for avatar creation that can be used on more than 4,000 platforms and apps worldwide. We are working with makeup artists, hair stylists, and also new kinds of 3D artists and developers like Evan Rochette. They create those looks together and that is about an expression of beauty. We have a lot of other partnerships.

We just announced a partnership with Meta to launch the first startup acceleration program dedicated to creativity in the metaverse, located at STATION F which is one of the largest startup accelerator programmes in the world.

Creativity in the Web3 is about moving from 2D to 3D buildings, understanding virtual avatars, looking at new kinds of creators, finding the answers to what is loyalty tomorrow. All that is in the making and we are very excited to explore it. We are digital-first. For the last decade we have been digitizing and we continue to explore and remain number one for the coming decades. 

Gaming is another space which L’Oreal has plunged into especially targeting women gamers. 

There's more than 3 billion gamers today, that may be casual gamers or very serious gamers. Within that 3 billion, more than 40 percent are women. So it's a very large women audience there. We do a lot of work on that and we are working with gaming influencers to bring an expression of our brand’s salon experience in the gaming world and do it with credibility with these gaming influencers. Armani Beauty worked with Fortnite to create a game called “Rewrite the Code.” It is inspired by the brand’s new scent for men, Armani Code Parfum. So we are very much into the gaming space. 

The interview first aired on Storyboard18 - CNBC-TV18.

New epicenters of influence are growing: Asmita Dubey, L’Oreal global marketing chief

boAt is one of the most exciting Indian startups that emerged in recent years. But how did boAt go from a challenger brand to one of the leading consumer goods companies in India? We find out about the brand’s journey from Vivek Gambhir, CEO of boAt. In an interview with Storyboard18's editor Delshad Irani, he shares what lies ahead for the brand, winning growth strategies and expansion plans and why he along with the founders - Aman Gupta and Sameer Mehta call themselves "the three idiots". Read on. 

boAt has gone from a challenger brand to a sizeable consumer goods company. What’s your report card?

We've continued to strengthen our business and maintain our strong growth momentum. We have crossed over Rs 3,000 crore in revenue. Globally, we are now the number two brand in the earwear category and number five in the wearables category. This is just through selling in India but it just shows the potential that we now have to be able to start creating an Indian brand that will become, hopefully, a global champion. The other brands are the likes of Apple, Samsung and a couple of the Chinese players, so it's a matter of great pride that a brand that was born in India, in such a short amount of time, has earned so much brand love to be now amongst the biggest brands in the world.

There are lots of brands which can create cheap products at the expense of quality and then there are expensive brands with great quality. But being able to marry features, design, quality, innovation and affordability, that's where we find our sweet spot.

Do you still consider boAt a challenger brand or has it shed its challenger brand mindset?

Absolutely not. When boAt started, a couple of 100 brands started in India at the same time. We were competing against players who were much, much larger than us. Even today, some of our competitors are very large global companies. And so it is a matter of pride that the Indian brand has managed to achieve a leadership position, where our market share today in personal audio is almost four times more than the number two player. 

I believe that the future is even more exciting. So being paranoid, being humble, being agile, being obsessed with consumers, that's what keeps us going. We are market leaders, but at the heart, this is a company with a lot of hustle and a company that is continuing to be a challenger.

You joined boAt in February 2021 and you came from well-established legacy companies like Godrej, where you were CEO. So what are some of the goals that you set for yourself and how far are you in terms of achieving these?

It's very important to partner with the cofounders Aman and Sameer, who have done a brilliant job taking boAt to where it is today. My mandate was about adding muscle to the hustle. There are some incredible qualities that have made boAt successful so far. But we also know that what got us here will not get us where we want to go in the future. So being able to preserve the legacy, preserve the values, shape the culture, enter new categories, think of bigger dreams and scale up the company have been my mission. The idea is to work together with the co-founders to make boAt a truly admired global company.

<blockquote>We sometimes joke that we have a CMO who has not studied marketing and a chief product officer who's not an engineer. But this shows how important passion, grit, hustle and conviction are to be able to create a successful business.</blockquote>

You raised about $60 million recently. Where will these fresh funds go?

There are three main areas where we will deploy the funds. The first area is to make smartwatches or wearables. We entered this category relatively late, about 18 months ago and within a very short amount of time, some of the best-selling watches are boAt. We want to deploy this money to create a health and wellness ecosystem. A lot of the game being played today is largely in hardware in watches. Our belief is that if we truly want to make watches relevant, useful, and a part of consumers’ lifestyles, we need to start investing in creating a platform that allows us to offer much more advanced features, better analytics and much more reliability. The game will change from hardware to much more of a software play. And we are one of the very few companies in the world, which owns an end-to-end platform. So being able to own the platform, drive it and be able to offer these features is going to be the first area of focus. 

What are the other areas of focus?

To continue investing in the personal audio category. While we are clear market leaders there, there are significant opportunities that we are seeing to be able to build stronger R&D and also start playing in the premium category. The third area for investment is around making in India, and also engineering and designing in India. This year, almost 40 percent of our manufacturing volume will be produced locally, from almost zero percent last year. We've already manufactured almost eight to nine million units locally. But making in India is not just about manufacturing in India, we have to build deeper design and engineering capabilities. During the pandemic, we launched boAt Labs, our in-house R&D team that's based in Bengaluru. About a third of our employees are involved in R&D, design and product development. We have about 65 patents in the wearables technology space. So that's the big shift we are making to be able to be a company that stands for strong tech leadership across the world.

Does boAt want to be the Apple of India?

The price points are very different and there will always be a certain consumer segment that will only seek Apple products, but that is the top 1 percent of the population. For us, the interest is the remaining 99 percent of the population in India, which will look for great quality, innovations and affordability. I think very few companies have managed to crack that – how do you make products more affordable while providing world-class quality? When I joined boAt, one of the first things I heard from a lot of people was ‘Oh! We didn't know that boAt is an Indian brand.” That’s just because of the kind of quality and designs boAt stood for. 

What are key consumer trends that are forming your growth and marketing strategies?

Consumers, particularly our target segment - millennials and Gen Z, are far more aware of technology trends and so the desire to buy and use world-class products and designs increases by the day. 

This is the moment of reckoning for Indian brands. There's a much higher pride that consumers are feeling about brands that are born in India. 

We’re seeing a far greater consciousness within the consumer in terms of the environment and social consciousness. 

<blockquote>It's a matter of great pride that a brand that was born in India, in such a short amount of time, has earned so much brand love to be now amongst the biggest brands in the world.</blockquote>

Not too long ago boAt hosted an event in the metaverse. How did that go?

The genesis of it is a brand focus. We're investing a lot of effort into the idea of ‘do what floats your boat’. It is to essentially become the voice of the generation and youth culture today and identify the passion points that today's generation can relate to, and find ways to unleash those. That's really what’s behind some of the experiments that we are doing like the metaverse event, even if it’s still early days. But part of being a brand leader is to find ways to innovate and experiment and the metaverse is an important part of that strategy.

boAt is unique in the fact that one of its founders is also its chief marketing officer. Aman Gupta is also now a celebrity in his own right after he appeared on the popular reality show Shark Tank. How has that played out for the brand in your view?

We sometimes joke that we have a CMO who has not studied marketing and a chief product officer who's not an engineer. But this shows how important passion, grit, hustle and conviction are to be able to create a successful business. With Shark Tank, the brand has benefited quite a lot and Aman keeps asking me for a raise saying that we're not paying him enough for all the brand value he's generating. I think he's a natural as far as Shark Tank is concerned. What's quite interesting is that now he talks increasingly about the role the company and he personally can play to nurture the entrepreneurial ecosystem in India. Shows like Shark Tank are also showing that the time for entrepreneurs is now in India and what role we can all start playing to build the next generation of millions of entrepreneurs.

<a href="https://www.moneycontrol.com/storyboard18/watch-listen/from-challenger-to-leader-boat-ceo-vivek-gambhir-on-the-brands-journey-3648.htm">Watch the interview here: From challenger to leader: boAt CEO Vivek Gambhir on the brand's journey</a>

Maybe a boAt incubator for budding entrepreneurs?

We’ve been talking about some campus programmes, growth hackathons along with some social work to start playing a deeper role in smaller towns and partnering with NGOs to make this entrepreneurial movement into a revolution. It can truly become a revolution, particularly if we want to get to our $5 trillion GDP goal. It will be very important for us to now create millions of Aman Guptas and Sameer Mehtas over the next 10 years or so. 

You came from well-established brands to a startup. How has the journey been for you so far? What was the founders’ pitch to you and what did you ask them?

So my first question to them was the company is doing really well, why do you need someone like me to be part of the team? And Aman described it well by saying look we know what we know. And we don't know what we don't know. We have been quite successful at scaling up this company to a certain level. But beyond this, the 1,000 to 10,000 journey, it's not something that we either know how to do or would enjoy doing and so it's better to find a partner to collaborate with us to be able to really harness the full potential and exciting dreams. So in that sense, it was never about replacing them, it was always finding a way to partner with them. Both of them have some extraordinary skill-sets and having me on board is enabling them to play to their strengths. So Aman can focus more on the brand and Sameer on the product and I can focus a lot more on running the company, ensuring governance and being able to define the strategy for the next three to 10 years or so. For me honestly, the decision was quite simple. We had a few conversations. We spent a couple of days together to thrash out what our respective roles would be. Ultimately, it was about the dream they had, the kind of platform they created, and the potential that I saw. 

That’s remarkable clarity and self-awareness. How are they different perhaps from some of the other founders you’ve worked with?

One of the biggest impediments to founders scaling up is when to either give up or sometimes they give up too soon. What's really important is for founders to have a much stronger sense of self-awareness and to really be clear about what their strengths and weaknesses are, and also be clear about what will be required for the next scale-up for the company. This is where I found Aman and Sameer to be remarkably self-aware about what they wanted to do and also what the company needed. Me coming on board was not an investor decision. It was actually a decision driven by Aman and Sameer. Ultimately, it is all about self-awareness, being honest and being clear about what gives you that meaning or high in life. This is where they've been generally quite different from a lot of other founders that I've worked with.

<blockquote>Making in India is not just about manufacturing in India, we have to build deeper design and engineering capabilities. </blockquote>

I read that you called the boAt office space in Delhi not conducive for deep work but rather for something called ‘constructive friction’. Talk about that and the learnings you’ve brought here from previous experiences and the things you’ve had to unlearn.

Some of the fundamentals of what it takes to build an enduring, sustainable company are the same whether it's a large or a small company. Some of my learnings are in terms of what it takes to build enduring brands, how do you build brand love, how do you drive clarity around mission and purpose, how do you have a maniacal focus on consumers and how you play the long game that is a lot more focused on value, not valuation. I think those are some of the hallmarks as far as companies like Godrej are concerned. Having said that, what we are also seeing now is a tremendous amount of changes that are being brought about in terms of consumer behaviour. There are significant opportunities to disrupt the status quo. So this is where I think new-age, digital-first companies are coming in and creating a massive amount of disruption. The two biggest learnings I've had is how to be much more agile in execution and being able to drive a much higher level of speed and velocity. The second is to be able to experiment a lot more. I've had to be able to adapt my approach to be far more agile and to be far more willing to keep on taking smaller bets and experimentation. I've adapted myself to a company like boAt, which operates on a very different clock speed than some of the larger companies.

Also, I would imagine it would be very exciting for you.

The thrill is there every day. Obviously, some of the challenges are there. We know we need to put a little bit more method to the madness. Structure, systems and processes need to be made future-ready. The biggest challenge is how do you leverage the benefits of scale with agility. You don't want the company to slow down ever. But at the same time, at this stage, we have to be a little bit more systematic and more structured. That's the juggling act. 

The other big challenge always is how do you instill a strong sense of founder's mentality, that there's a certain sense of mission that the company was built around. It's very important to preserve parts of that culture. There's a reason why founder-led companies still outperform by a ratio of three to one, globally. So being able to keep the founders’ ethos alive while building new muscles and new strengths is the biggest challenge we are collectively working on. 

The global economic climate is challenging and there are significant headwinds. What’s your outlook for 2023?

The biggest challenge in times like this is how do you balance growth and profitability. For the Indian consumer, as far as demand over the next 10-20 years is concerned, it is incredibly exciting. The key is to be able to use this uncertainty to get operationally more efficient. From our perspective, we are putting our learnings into place. We were forced to rely on China from a supply chain perspective. This year 40 percent of our products will be produced locally. Covid-19 was a wake-up call. We used that to our advantage and we fundamentally changed our supply chain model. So being able to drive greater operational efficiencies, change the business model and use this uncertainty to one's advantage is very important. 

The second is frugality and prudence. Companies that do have funds available have a war chest. That's exactly why we decided to go and raise this funding because it will be a huge amount of strength for us as we keep on investing. 

Companies that managed to actually take advantage of the downturn end up being far stronger. That's happened consistently across every single downturn. There is no downturn today in India. There are certainly challenges - inflation and some concerns about rural demand, but, I think, companies that continue to focus on the basics, getting their share of consumers and coming up with winning products will emerge stronger. The key is to play the long game.

This is a moment of reckoning for Indian brands: Vivek Gambhir, boAt CEO

This is the Indian decade. I would also say it's the start of the Indian age: Mark Schneider, Nestle CEO

Sudhir Sitapati joined Godrej Consumer Products Ltd (GCPL) as managing director and CEO last year, just as the world had begun to open up in a post-pandemic era. In a candid interview with Storyboard18, Sitapati tells us how he articulated his vision for GCPL back then and his approach towards marketing and brand building. Sitapati also shares how Godrej is democratizing categories and the secret to building enduring brands. 

Edited excerpts. 

You joined the company in year two of a life-changing pandemic. How did you articulate your vision for GCPL at the time? 

I think the vision that I articulated for GCPL was based on what I found Godrej to be good at and what I found it to be not so good at. 

<blockquote>I found GCPL to be a very innovative company. I found it to be a frugal company. I, however, found it to be relatively poor in terms of category development or market development. And I found it to be more complex than necessary for a company of its size.</blockquote>

 So what we basically said is that we need to grow this company at close to double digit volumes, right? That's what the potential of this company is. We said that strategy is market development and we will release the funds for market development by radically simplifying the organization. So that was the basic vision that I laid out to the company which is to focus on developing categories.

One of your key strategies is the democratization of categories through innovation and accessibility. Can you elaborate on that and is the launch of a ready-to-mix body wash a part of the plan to democratize categories? 

<blockquote>The DNA of GCPL in terms of frugality and innovation is geared towards democratization and not premiumization.</blockquote>

 Strategy is about making choices and the first big choice is really about democratization. It has to do with getting access packs. Now, if you take body wash as a category, we’re the number two player in India in the soaps category or the skin cleansing category. It is one of those categories that is very underdeveloped. In many other parts of the world it's a very large category. And our thesis for underdevelopment was that the category's pricing is not accessible. So this was certainly one of the levers for launching Godrej Magic body wash

What were the other levers? And will we see more of these launches and incentives for consumers coming up?

The big sort of parallel track for some time has really been our commitment to sustainability and ESG. GCPL is not the largest company in India, but it's always a top five in terms of sustainability and takes it very seriously. Reduction of plastics has been a big drive within GCPL and this innovation has the intersection of making body wash more accessible and by reducing plastic and energy footprint. They're not two independent things. I think that's the really interesting thing about this product, which is that it's not ecological and economical. It is ecological because it is economical. Because you remove plastic, because you remove the diesel that it takes to carry bottles of body wash into shops from factories, we've been able to get the economy right. I think in both these dimensions we will continue working because if we're about democratization, we've got to bring categories at the right price to consumers and we have a deep commitment to sustainability. So we're going to try and do this in a way that minimizes the footprint to the environment.

What are some of your key focus areas in terms of categories and markets? 

GCPL is blessed to have three of our markets account for about 80 percent of our revenues, which is India, by far the largest market, Nigeria and Indonesia. We've actually got a very large global footprint or almost half our business is outside India and this is not from Indian exports. They're all independent businesses in those countries. These three are really the focus countries. The three categories that are the core of our business are household insecticide, hair colour and aircare. Hygiene is the emerging one that has a lot of potential which is where Magic body wash is. So this is a 3+1 - three is where we are today, and +1 is what we're trying to do with Magic body wash.

Let’s dial back to the point about sustainability. So sustainability is a bit of a buzzword these days at all major organizations. But we also know that sustainability is an essential operating principle for any organization striving for financial success. How are you driving the sustainability agenda at GCPL and what are the challenges to putting some of the strategies and philosophies in action? 

GCPL along with a lot of companies has focused a lot on sustainability in its own operations. So, for instance, 30 percent of the energy we use is renewable. We've cut our emissions by 50 percent in the last decade. All our factories have targets on water usage. We don't send anything to the landfill. One of the targets for every factory manager is the environment friendliness of the operations. Now, what we're trying to do with Magic body wash is to move one step forward. Our own operating footprint is a fraction of the footprint of our consumers, and what consumers use with our products. That's where the real big impact can be. 

So that is a big jump that GCPL is making and I certainly think Magic body wash is a unique product anywhere in the world because I've seen it, we've studied a lot of countries and products. We haven't seen a super concentrated product anywhere in the world at this kind of discount. We've seen green products at a premium where you make consumers pay a premium for being green conscious. But we haven't seen a green discount. The handwash which we launched a few years ago was a good proof of principle. But I think 

<blockquote>if we can contribute to the idea of having a green discount, and sell cheaper products which are green, I think it would be a really big step in sustainability.</blockquote>


Are Indian consumers ready for that? 

I think so. Indian consumers are both environmentally friendly and very conscious on the economy. I mean, I remember that my grandmother used to hang milk packets in her washing line. She would wash them, dry them and reuse them anytime somebody had to go out or to give something. So it was both environmentally friendly and economical. She needn't have done it. So I think it's very ingrained. Probably one of the reasons why Magic hand wash has worked in India is because consumers are both. 

I think this can be a contribution because I know there's a lot of conversation going on in countries like the US on super concentration. I saw Target having products that were at a green premium. But dollar stores don't have green products. So this disrupts their whole thinking and says get to the belly of the market or, in fact, the bottom of the pyramid with green products.


What do you think is the secret to building future-ready homegrown brands and businesses that are built to last? What are the lessons younger Indian companies and brands can take away from legacy organizations like GCPL? 

I think all companies that succeed, young or old, definitely have consumer focus and are, you know, solving unmet consumer needs. I don't think young companies have that much to learn from the older companies on that front because I think they do it very well. Older companies that have lasted for a long period like Godrej have value systems and commitment to the environment is an example of a value system that sometimes transcends profits and, in the long run, it pays off. So companies that last a long time almost always have very strong value systems ingrained in them. Second, you have to have a manic focus on cash and you have to pay for whatever you do. Your own investments have to be paid from your own pocket, in general, I would say.

Get to the bottom of the pyramid with green products: Sudhir Sitapati

FMCG companies across the board are feeling the pinch of inflationary trends. Nestle, the maker of major brands like Maggi and Nescafe, is no different. In an exclusive conversation with Storyboard18, Nestle India’s managing director and chairman, Suresh Narayanan, tells us how the company is sustaining all the momentum in consumption that came during the pandemic for flagship brands like Maggi and meeting customer expectations in challenging times. We dig into trends like D2C and healthy-aging, and how Nestle is expanding its health and wellness bandwidth as a company. Plus, Narayanan shares his leadership lessons during a crisis and he tells us why he is one of the most responsive chief executives on LinkedIn. Edited excerpts:

How has 2022 been for Nestle India so far? How are you sustaining all the momentum in consumption that came during the pandemic for flagship brands like Maggi?

One of the striking features of 2022 has really been unrelenting inflation on commodities that we are faced with. 9 or 10 of our top 13 commodities we procure as a company have crossed their ten-year high. The cumulative inflation in the last three years has essentially met or surpassed the inflation that we are facing today. So, really the commodity inflation is something that is here with us and that is something that we have to cope with.

On the other hand, I must say that the demand for our mainstream brands has been fairly robust. Most of our portfolio is doing well. But the one thing that we have to really combat in the short to medium term is commodity inflation. How do you deal with it in terms of efficiencies, in terms of effectiveness, and also in terms of pricing. So those are some of the concerns that one is combating at this point in time.

Also read: <a href="https://www.moneycontrol.com/news/trends/features/why-we-craved-maggi-even-more-during-the-pandemic-8001741.html">Why we've been craving Maggi during the pandemic</a>

Maggi is now a four decade old brand, it’s an iconic brand, which had a dramatic turnaround when it came back from the brink after the lead crisis. How are you looking at unlocking the next level of growth for a brand like Maggi?

Maggi is really a classic example of a brand that has been mass customized even before the word has been fully digested by marketers. Everybody has an association with it. There’s a Suresh version of Maggi. There’s a Delshad version of Maggi. Everybody has their own version of Maggi.

Yes, it’s a brand that went through some very difficult times. But I’m glad to say that thanks to the consumers, stakeholders and employees of the company, the brand has come back very strongly and rose to greater heights during the pandemic.

Today, the brand’s ecosystem is much bigger than brand Maggi itself - the number of wheat farmers, factory workers, spices and packaging suppliers, and number of vendors who actually sell Maggi across the country, that number runs into hundreds of thousands if not millions. So the footprint of the brand is very big and it's really growing each day. It is going from strength to strength, the strength comes from three platforms.

Number one is innovation, and innovating constantly across variants. Number two is Maggi is now more digital than it ever was. In the last two years, the digital connection with our consumers, whether it is recipe searches, recipe provisions or the experiential part of Maggi and ensuring that consumers talk about Maggi, has become a very important aspect of the brand.

And the third is our sustainability initiatives. A number of initiatives are being put through. As a brand we have been plastic neutral for the last two years. Sustainable farming for spices, we work across five states with almost 2000 to 3000 farmers working on sustainable agricultural practices in growing spices, and also the traceability of spices. During the pandemic we began the Apna Food Business initiative to incentivize and to encourage women entrepreneurs, with training and seed capital.

So there are different initiatives around sustainability and the food business, and really trying to see how the ecosystem of Maggi can become stronger and even more robust.

What’s the strategy in terms of how you handle these challenges and meet consumer expectations when it comes to Maggi’s pricing?

It is definitely very challenging because you know Maggi is almost a common staple in many homes, across income status. That is something that we are very cognizant of. Typically, in a difficult situation as far as commodity inflation is concerned, there are two or three vectors that the company uses. The first one is because of the sheer scale of Maggi, there are economies of scale in terms of buying at the right time, stocking at the right time and really ensuring that you try and minimize the input cost impact that you start feeling from one period to the other.

Number two is we do have a cost efficiency program almost contributing to 1 to 2 percent of sales, we call it sharp savings, which is really operational savings, packaging savings and other related savings. For example, on Maggi, in the last two to three years, there’s been an almost 7 to 8 percent reduction in the amount of packing materials that have been used. So there are efficiency parameters that we work on in order to reduce the cost and only after one and two, which is really the economies of scale and the efficiencies and effectiveness are not fully satisfied do we touch pricing. So pricing is really only the third vector that we operationalize.

But as I told you, the scale of inflation has been rather stiff this year. I mean, 2019, 2020 and 2021 has been more than offset by the impact that we’re facing in 2022. Almost every single element of the value chain has had a substantive increase in costs. So we're trying to do our best to ensure that we mitigate as best as possible the impact that we’re facing. And yet, I’m afraid we've had to, with deep regret, pass on some of the price increase to consumers as well.

<a href="https://images.storyboard18.com/storyboard18/Nestle-India-Suresh-Narayanan-leadership-lessons.webp"><img src="https://images.storyboard18.com/storyboard18/Nestle-India-Suresh-Narayanan-leadership-lessons-300x300.webp" alt="" width="300" height="300" class="alignnone size-medium wp-image-1065" /></a>

We’ve seen a huge influx of D2C brands in food. How are you seeing the D2C brand space play out and how is Nestlé growing its presence in D2C?

The D2C space is really becoming very interesting. Also very challenging because you have to find a differentiator for the consumer experience between buying on organized trade or ecommerce or the general trade versus buying on a D2C platform. So the degree of differentiation really has to be quite acute and quite sharp in order for it to work.

Secondly, D2C is becoming very attractive because consumers are now looking at brands as not just products to be consumed but they're also looking at it as a reflection of their own lifestyles. So whatever they are looking for in their lifestyles in terms of nutrition, health, wellness, advice, tips, etc, all of this engagement has been built into a D2C platform. As I speak to you, we are working on a platform and we will be making our foray into it. However, we just want to ensure that whatever experience we give it is robust and adequate enough to satisfy the most discerning consumers. Nestle would not like to put a half foot forward. We want to put a firm foot forward.

People are becoming more conscious about how they live, what they consume and what they eat. How is Nestle addressing the trend toward more healthier living? Because at the end of the day you are in the business of making snacks, beverages and confectionery.

There's nothing called good nutrition or bad nutrition. It's all about balanced nutrition. During the pandemic we saw two or three things come out very clearly. Number one is that consumers are looking for nutrition and immunity. Second is the preference for quality and the safety of a brand over any other parameters. But they are still seeking value and because of the economic consequences of the pandemic, there are segments of consumers whose budgets are being stressed. And therefore they're looking at better value offerings that companies can give. So, for us, the journey has been to improve the quality of the nutrition that we seek to offer, whether it is Maggi or milks and nutrition or in any other part of our portfolio, to make better, healthier and more relevant offerings.

We are looking at products in healthy snacking, whether it is grain based or protein based. The whole area of plant-based proteins is becoming an additional source. The question is one of adapting plant-based proteins into the Indian context and cuisines' relevance rather than just lifting concepts from the west.

We’re looking at entries into areas like Healthy Aging. As India grows more prosperous and as our population growth rates decline, we also are becoming more of an aging population. The 60-plus population is gradually creeping up in this country. And these are the people who also have the money in their pockets. They earned reasonably well and saved prudently, and now they're looking at products and offerings that can keep them healthy and happy as they grow older.

So these are a couple of areas that we certainly are looking at quite aggressively to develop some of these products and really expand the nutrition and wellness bandwidth of the company as we go forward.

How has your leadership style evolved, particularly given the life-changing global events of the past three years? What aspects do you dial up in tough times?

Having spent four decades in the trenches, there is an advantage and a disadvantage. The advantage is that my leadership style is settled and it is not something that is going to be variable. The disadvantage is that it is prone to less change as one would expect of a leader perhaps 20 years younger.

What for me has been the central theme of this pandemic has been a phrase that I use reasonably often - In a crisis you don’t run a company, you serve a family. I honestly believe that a company is like a family. It's a family of employees, colleagues, partners, stakeholders and of people who have got some stake and some involvement in your business and the larger ecosystem.

In a crisis, you lead by example and you lead by managing yourself. So the biggest challenge is a capability to be able to manage yourself, your emotions, your uncertainties, your fears, because the fact of the matter is that people don't want to see a fearful leader. They don't want to see a leader who spins in his boots and is uncertain about whatever he or she has to do. So number one is managing yourself.

Number two is keeping your ego in check. This is not about you. It is not about how brave you are and what a super human being you are. What happens when you quell your ego is that you generally allow people to do the right things in a non intrusive way, in a non threatening manner in which they are able to contribute the best they can.

A leader has to be authentic and transparent. It is not for me to show my people that I am a superhero but I am as human and that I need to be able to not answer all the questions. I need to be transparent and ask the right questions. If you ask the right questions, you'll get the right answers, provided you're transparent and provided you are as vulnerable as you need to be in a crisis.

Fourth, compassion over competence in a crisis. There are very competent people. The world is full of very bright people. But at this stage nobody wants to see the cranial capabilities or the intellectual capabilities of the CEO. They want to see the compassion of the CEO. What happens to him when there is a death in the family of an employee? What happens to him when there is a serious illness around? How does he react when people and the community around him are suffering? Does he reach out, going beyond empathy and acting with compassion? Or is he only a person who's bothered about the top line, center line and the bottom line?

These are lessons in leadership. The leaders of the future have to be outstandingly good human beings. You can be competent, brilliant, qualified from the best institutions but if you don't have a heart that beats at the right speed for your people, you can't call yourself a leader.

<a href="https://images.storyboard18.com/storyboard18/Nestle-India-Suresh-Narayanan-leadership-lessons2.webp"><img src="https://images.storyboard18.com/storyboard18/Nestle-India-Suresh-Narayanan-leadership-lessons2-300x300.webp" alt="" width="300" height="300" class="alignnone size-medium wp-image-1066" /></a>

Many CEOs today have become social media influencers. But you are one of the most responsive CEOs I’ve seen. Tell me what’s your approach to how you address and respond to your employees, colleagues, customers and consumers on platforms like LinkedIn?

I don't mean to boast but when we were young managers, each one of us had a dream of what we would like to be known for. One of the things that I had hoped to do as a more mature manager is to be able to positively influence as many people as I can.

I am not much of a social media person. LinkedIn is the only thing that I do and I do that reasonably regularly. One of the things that always kind of rankles me is that if I am a 23 year old and I'm writing to someone with a request and that person does not even have the courtesy to reply to me back, simply because he's sitting on a high horse of being the chairman of a company or the director of a company or whatever position he is. I think it is basic human courtesy and respect.

I genuinely feel extremely happy when young people achieve something in their lives because the only legacy that I will ever leave behind as a corporate leader is to have created leaders who are far better than me. Far more competent than me and far more capable of handling an environment that is increasingly going to be more turbulent, more difficult and more unpredictable.

So, in that context, I believe that I should find the time. And I most often do but sometimes I don't and my apologies for those who have not received my replies in time. But I really think that nurturing the young and giving them a few examples of what they could emulate in their lives, or what they could even consider as perspective in their lives, is important.

I can't give knowledge to them. I'm not a professor. I'm not a tech person. I'm not the kind of guy who has got a whole amount of specialist wisdom coming out. What I can share with them is the robustness of perspectives, and the introspection of a lifetime in order to offer them more hope, and probably some examples of what people could look at for themselves for the future.

Watch the interview on Storyboard18 on Moneycontrol and CNBC-TV18.

I want to create leaders who are better than me: Suresh Narayanan

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