Godrej Sara Lee plans to recast distribution, strengthen IT

Mumbai: Godrej Sara Lee Ltd, the household insecticide division of Godrej Consumer Products Ltd, is looking at doing a distribution overhaul of its business in order to create stronger relationship with retailers.
 
The recast will help the fast moving consumer goods (FMCG) company that is a 49:51 joint venture between the Godrej Group and Sara Lee Corp of the US, to find appropriate placing of its products across modern and traditional retail channels.

Tarun Arora, vice-president, marketing, Godrej Sara Lee Ltd, said the company is adopting a segmented channel approach that will involve breaking down of retail points into categories such as specialty outlets, shoe marts, cosmetic stores, and rural space channel.

The company already has a special team for modern trade distribution that it shares with industry peers.

The company is also increasing dependence on IT to get a real-time data on inventory and sales off shelves.

It has already moved 70% of its distributors to electronic payments.

Godrej Sara Lee dominates the insecticide market in India with a market share of 33% with brands such as Good Knight and Hit.
“Our market share in modern trade alone has reached 48% now,” Arora said.

The player has become a leader in the household care space in east and west regions.

Arora said that Good Knight Naturals, mosquito-repellent cream that the company launched recently has already reached a 12% market share within the personal application mosquito-repellents category.

Godrej Consumer Products is looking to takeover 51% stake that Sara Lee Corp has in the joint venture, things have been moving at snail pace.

While Sara Lee Corp wants to do away with its household care division (insecticide), it seems to be in talks with multiple players, and waiting amongst the contenders is Godrej Sara Lee.

Of Sara Lee Corp’s divisions — personal care, food and household care — Unilever in September last year bought the personal care division for $1.88 billion. Soon after, Procter & Gamble Co, US-based consumer-goods giant, acquired the
air-care unit, consisting of Ambipur.

But this, Arora said will not change things for Godrej Sara Lee’s distribution of Ambipur and hair-care brand Brylcreem in India.
Ambipur is a strong brand in Godrej Sara Lee’s portfolio and the company is looking to continue expand the brand with various launches under it.

“We are the exclusive licensee for Ambipur in India. It is a strong brand. Sara Lee’s international business and our business here are separate. Any change of hands at Sara Lee’s business will not change anything for our business,” he said.

Even as another FMCG major buys out Sara Lee’s household care business internationally, Godrej Sara Lee will thus continue to retain the licensing rights to manufacture, market and distribute these products by virtue of a five-year lock-in that exists.

Only two-and-a-half years of the lock-in has been exhausted.