Imagine a business strategy so bold, it could shield a company from the unpredictable swings of the global oil market. That’s exactly what India’s AWL Agri Business is attempting to do—and it’s turning heads in the industry. But here’s where it gets controversial: instead of doubling down on its traditional edible oil business, the company is betting big on packaged foods, a move that could redefine its future. Could this shift be the key to stabilizing profits, or is it a risky gamble? Let’s dive in.
In a recent interview, Shrikant Kanhere, the newly appointed managing director and CEO of AWL Agri Business (formerly Adani Wilmar), revealed the company’s ambitious plan to expand its higher-margin packaged foods segment. The goal? To reduce dependence on the volatile edible oil market, which has seen inflation rates soar between 18% and 21% in the September quarter—the highest among food and beverage categories. And this is the part most people miss: by increasing the share of packaged foods to 30% of its total volume within five years, AWL Agri Business aims to secure more stable margins and diversify its revenue streams.
This strategy isn’t unique to AWL. Industry peers like Marico, the powerhouse behind the Saffola brand, are also diversifying their portfolios by introducing products such as oats, muesli, and soya nuggets. These moves reflect a broader trend: the rising demand for branded staples in a market where consumers are increasingly health-conscious and quality-driven.
Kanhere emphasized, ‘Food remains a high focus for us because it offers a better margin profile compared to edible oil.’ Currently, packaged foods account for about 20% of AWL’s total volume, but the company expects this figure to grow significantly in the coming years. To support this expansion, AWL plans to increase its retail reach from 900,000 outlets to 1 million by next year, ensuring wider product availability.
Despite these ambitious plans, the road ahead isn’t without challenges. AWL’s projected 10% revenue growth in the second half of the fiscal year marks a sharp slowdown from the 35% growth seen a year earlier, when surging edible oil prices artificially inflated sales. In the September quarter, high prices forced consumers to switch to cheaper alternatives, impacting volumes. Here’s the burning question: Can AWL’s packaged foods segment truly offset the volatility of its edible oil business, or will it face unforeseen hurdles in this competitive market?
As AWL Agri Business navigates this strategic shift, one thing is clear: the company is not just adapting to market conditions—it’s actively reshaping its future. But will this bold move pay off? Only time will tell. What’s your take? Do you think AWL’s focus on packaged foods is a smart strategy, or is it a risky diversion from its core business? Share your thoughts in the comments below!
