Eveready’s Non-Battery Business to Account for 45% of Revenue: CEO

Eveready is a highly regarded, trusted and credible brand. It has been around for decades, going back to the Union Carbide days, and enjoys very high awareness and trust among consumers.

But prior to the Burmans coming in, there was almost a decade during which growth in the organisation was absolutely flat. I think the primary change was the recognition that, like any consumer-facing organisation, the brand needed to grow. Since they came in, we have registered growth at various stages, compared with a decade of being flat.

There were many things that needed to be set right to regain momentum. It started with getting the right set of people to take the organisation forward and making policies that were conducive to attracting and absorbing younger talent.

We also undertook a large route-to-market (RTM) transformation a couple of years ago. It was done quickly, and then it took some time to stabilise the RTM. Traditionally, the organisation was extremely general-trade heavy. Post the Burmans coming in, and with a lot of new talent joining the organisation, today roughly one-third of our business comes from alternate channels. That has given us the ability to partner with e-commerce, quick commerce and modern trade.

Modern trade retailers in India traditionally did not keep flashlights. We had to convince them and, over a period of time, build demand and get them to stock and sell flashlights.

We are also partnering with players such as Zepto to propagate batteries. If you go back a few years, when you ran out of batteries at home, you would typically go downstairs, call a retailer or send the domestic help. By the time you got the batteries, the earliest could be 15 minutes.

Today, an app can probably get batteries delivered to your home in around 9.5 minutes. Batteries are a category where, when you need them, you need them. You don't want to wait. So e-commerce and quick-commerce channels are very friendly for the battery category.

So, people, go-to-market transformation, alternate channels, premiumisation, expansion of the portfolio within batteries, new kinds of batteries, expansion within non-batteries, strengthening the lighting portfolio and driving innovation have all become central pillars.

You can't keep doing the same thing again and again. You need to innovate. There are many examples of innovations that I can share with you that have hit the market over the last two or three years.

As a result, there has been a change in mindset and approach: we should not be doing anything less than double-digit growth, like any regular company. Eveready is very unique in its approach because we sit at the intersection of a large-scale FMCG company and an FMEG company.

When you talk about batteries, it is more FMCG. Your reach could be as high as around 4.5 million outlets. When you talk about lighting, small appliances, wires, MCBs and electrical accessories, you are talking FMEG. Those products are mainly propagated through electrical outlets across the country.

So we manage and straddle both, while e-commerce and modern trade continue to provide an umbrella across the two.

All of this has come in as a mindset and culture with the new family coming on board.

In batteries, it's a bit of a niche category. If I weren't working for a battery company, I wouldn't even know what zinc or alkaline batteries were. For consumers, a battery is a battery. You put it in the remote and that's it.

At the same time, there are many other things entering households. You can have a lot of toys if you have children. You can have optical mice. Post-Covid, the number of medical devices entering households has increased, and these require good batteries.

You could also have electric toothbrushes or an Xbox. All of these are high-drain devices where power consumption is higher.

While these devices are not yet heavily penetrated, over the next two decades, with India's GDP growing at around 6.5-7%, it will be one of the few countries where adoption of some of these high-drain devices per household is likely to increase.

That essentially means the need for power for these devices will increase. As a result, there is a growing need for alkaline batteries.

These batteries have a chemistry oriented towards higher power. They can deliver roughly three times the power of zinc batteries, depending on the type of zinc battery you are comparing them with. These batteries perform better in some of these power-hungry devices.

If your household consists essentially of traditional television remotes, wall clocks and similar devices, you are fine with zinc batteries. But tomorrow, if you are using smart remotes, medical devices and other high-drain products, their higher power consumption makes alkaline chemistry more suitable.

If you go to Europe or the Americas, for example, or even parts of Asia, device penetration per household is much higher than in India. As device penetration increases, stronger batteries are needed, and that has driven the evolution towards alkaline chemistry.

As alkaline adoption grows, premium batteries naturally come into play. At the moment in India, alkaline batteries are roughly 25-30% more expensive than zinc batteries.

Should it be only a 25-30% premium? Maybe not. Ideally, if it offers three times the power, you should perhaps be paying at least twice the price. But currently the premium is around 25-30%.

Over the next two or three years, I see that premium becoming at least 50% over zinc batteries, roughly speaking. As the category focuses on growing alkaline batteries, deeper penetration of high-power devices will naturally drive premiumisation in batteries.

Within flashlights, we have made a very strong foray into products priced at ₹500 and above.

If you look at the flashlight market, products priced at ₹200 and below account for roughly two-thirds of volumes, while one-third is ₹200 and above.

But we have a very strong play in what we call the Commander segment—torches priced at ₹500 and above. At almost every price point, we have tried to innovate.

We are also focusing on consumer luminaires and other accessories that sit on the relatively premium side of the lighting category.

If you look at the combined effort, there is a focused approach towards offering premium products that are aligned with consumer needs and that consumers are increasingly adopting.

We are currently growing at a double-digit pace. Given that the company had no growth for almost a decade, it was important to first establish that we could grow properly in what has been a sluggish battery market.

If you look at our last six or seven quarters, we have demonstrated that, and hopefully, by the time we end the financial year, we will remain on track.

Have we extrapolated that into a specific medium-term aspiration? No. We are going by what we are currently doing and projecting that forward.

There is also a lot of focus on growing the non-battery segment.

My sense is that over the next three or four years, if batteries currently contribute close to two-thirds of our revenue, that could come down to around 50-55%. The non-battery side could grow from roughly one-third to around 45% over the longer term.

Obviously, batteries will be driven significantly by growth in alkaline. The non-battery side will be driven by our foray into lighting, some amount of growth in flashlights, and our entry into the mosquito-repellent segment, where we recently launched a liquid-vapouriser category.

All of that, along with innovations, should fuel the non-battery side equally.