Packaged Foods
Inside a CEO’s Mind: Lessons on FMCG Growth, Business Turnarounds and the Future of Consumer Markets
What does it take to unlock the potential of an underperforming business? How should leaders balance growth, profitability and organisational transformation? And what will shape the next phase of India’s FMCG industry?
In this episode of Behind the Boardroom with Reshma, Sudhir, former CEO of Raymond Consumer, Organic India and RPSG, shares his perspectives on business transformation, leadership, portfolio strategy and the changing dynamics of India’s consumer market.
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1. Introduction and Background
Reshma: Sudhir, I want to start by talking about your experience over the past few years. You’ve been leading businesses as a CEO. Could you share some of the situations you’ve encountered and the outcomes you’ve helped achieve?
Sudhir: Sure. I’ve been a CEO for the last six years, just to make a quick correction.
My first company as CEO was Raymond Consumer. The company has been around for quite some time, with brands initially launched in the 1980s. However, until the early 2000s, its valuation, revenue growth and overall financial performance were significantly behind those of peer companies launched around the same time.
My passion project at Raymond Consumer was to transform the business into one of India’s leading consumer companies. The product portfolio was very strong, but the business needed a significant turnaround in terms of product strategy, growth strategy, people and culture. It also required bringing these different aspects together. The results were very strong and encouraging.
The second company I led as CEO was Organic India. This was not a typical turnaround story because the brand was already very strong and well-positioned from a process perspective. However, the company needed a major reboot in terms of monetising its overall brand and product portfolio. My focus was therefore on the commercial strategy. The stint was short, as the business was eventually acquired by the Tatas.
The third company I led as CEO was RPSG, which had a diverse portfolio spanning established snacking businesses and new-age D2C brands such as Naturally Yours and Within.
There was a significant opportunity to align the product and brand portfolio more closely with consumer markets by moving beyond a General Trade-centric approach and expanding into new-age channels. Revenue increased significantly, margins improved, and the contribution from new-age categories saw a complete turnaround.
2. The CEO Diagnostic Triangle and the First 90 Days
Reshma: When you enter a business where the potential hasn’t been fully unlocked, what do you look at first? What are the initial parameters you assess to understand the state of the business?
Sudhir: The framework I follow consists of three corners of a diagnostic triangle. Every business is unique and different, so the same playbook cannot work everywhere.
- Strategy: Evaluate what uniquely sets the business apart from the rest of the market and positions it for extraordinary growth in the future. This involves an external assessment of consumer trends, technology and channels, along with an internal assessment of brand portfolio alignment and geographical presence.
- Execution Health: Execution is about the organisation’s ability to translate its intentions into action. This requires re-engineering, with a strong emphasis on measurement, performance against commitments and a clear focus on leading objectives.
- People Climate: Assess the culture of accountability and leadership, including the ability to manage oneself and others with empathy during challenging turnarounds, while doing more with fewer resources.
Reshma: How do the first 90 days look for a new business leader?
Sudhir: The first 30 days are about listening, walking around and meeting stakeholders, from frontline employees to business partners.
The next 30 days focus on assimilation and building early trust with key team members.
The remaining 30 days involve articulating the initial agenda.
In Indian mid-sized companies, it is important to keep a reassessment window open for the next six months because new information and surprises continue to emerge.
3. Key Health Metrics, Back to Basics and Portfolio Segmentation
Reshma: What are the key metrics that help assess the health of a business?
Sudhir: The two golden parameters are market share and profitability.
Other important measures include margin trends, field execution health, effective coverage, asset productivity, supply chain positioning and an early assessment of sales quality.
Reshma: How do you approach going back to basics when fixing a business portfolio?
Sudhir: You need to segment the portfolio into three buckets:
- The Core: Ensure that the core business does not become a leaky bucket. If it is profitable but not growing, activate its existing brand equity through branding and product support.
- Satellites (High-Growth Peripherals): Prioritise fast-growing categories around the core. For example, hand wash and body wash around soaps, or non-chip snacking in the case of RPSG.
- Future Growth Legs: Identify categories that can become major pillars of the business in the future. At Raymond Consumer, scaling the soaps business from Rs 20 crore to Rs 80 crore in two and a half years was one such opportunity. At Organic India, it was about expanding beyond teas into packaged foods.
Reshma: In the early stages of a turnaround, where should leaders focus more?
Sudhir: All systems must perform at peak efficiency simultaneously. Growth strategies, process pain points and efforts to fix inefficiencies must reinforce each other.
The early turnaround phase is intense and typically lasts between nine and 15 months. It requires authentic leadership and a high level of execution.
4. Leadership Time Allocation, Data vs. Instinct and Board Relations
Reshma: How do you allocate your personal time as a CEO?
Sudhir: I allocate 20% to 30% of my time to strategy, another 20% to 30% to leadership climate and culture, and the remaining time to transformation execution and high-stakes projects.
Operational handholding is delegated through an empowered and distributed leadership structure.
Reshma: How much of your decision-making is backed by data versus instinct?
Sudhir: When evaluating past performance, KPIs and operational health, the approach is 100% data-based.
However, when it comes to anticipating the future, it is a combination of soft sensing, validating hypotheses through data and intuition.
Reshma: How do you manage relationships with boards and promoters?
Sudhir: Boards expect five main things from a CEO:
- Keeping the organisation future-ready for the next three or more years.
- Maintaining a strong leadership climate.
- Ensuring complete transparency.
- Avoiding surprises.
- Providing strong strategic direction and oversight.
An HBR study noted that while CXOs believe CEOs are fired because of short-term sales performance, boards identify a lack of confidence in the CEO’s ability to build the organisation for the future as the primary reason.
5. Rapid-Fire: True or False and Hypothetical Scenarios
Reshma: Let’s go through a few quick true-or-false statements and hypothetical scenarios.
Is the CEO ultimately responsible for organisational culture?
Sudhir: Absolutely true. Strategy and culture are two primary responsibilities that a CEO cannot delegate.
Are decisions delayed by an overflow of data in FMCG?
Sudhir: Decisions need to be fast. Organisations need a decision-making climate with the right filters so that leaders focus only on material decisions.
Is market penetration the only way to grow?
Sudhir: False. Penetration is an industry-driven growth vector, while premiumisation is driven by a country’s GDP.
Should CEOs approve major marketing campaigns?
Sudhir: This may have been true earlier. However, in the era of user-generated content and social media influencers, it is largely redundant.
Should businesses focus on growth levers or cost-cutting?
Sudhir: Always focus on growth levers, supported by cost efficiency.
What is the biggest risk in decision-making?
Sudhir: Not taking decisions at all is a much bigger risk than making a wrong decision.
If you had Rs 10 crore to invest, where would you allocate the capital?
Sudhir: I would focus on food categories such as healthy snacking, breakfast cereals and protein bars because consumers are dissatisfied with many legacy food products.
After that, I would look at beauty and personal care, followed by home care.
How should a company handle a product crisis?
Sudhir: The first priority should be to take care of affected consumers. This should be followed by necessary product or batch recalls and honest, transparent communication.
Businesses should also establish an early-warning system because even a single consumer complaint about product quality is a significant signal.
6. Macroeconomics, Quick Commerce and Channel Transformation
Reshma: What do India’s macroeconomic numbers mean for the FMCG industry?
Sudhir: India’s GDP growth of 7.8% to 8% is strong. However, the top 10% of the population is prospering significantly, with average incomes of around Rs 32–33 lakh, while the remaining 90% continues to face real income stagnation.
Based on the Kuznets Curve model, around 2033–2035, when India’s per capita GDP reaches $5,000, government strategy is likely to shift towards middle-class upliftment through manufacturing jobs and formalisation.
That shift could trigger the golden era for mainstream FMCG.
Reshma: How has Quick Commerce impacted traditional FMCG?
Sudhir: Quick Commerce generates around 90 lakh orders per day, serving approximately 2 crore unique households and reaching 33% urban penetration.
It is disrupting FMCG in four ways:
- Capturing consumption-starved, situational occasions: For example, impulse-led snacking.
- Creating a virtual shelf: It allows D2C brands to bypass traditional gatekeeping and reach consumers directly.
- Enabling fragile and perishable categories: Products such as fresh avocados can now be distributed more easily.
- Serving as a channel for premium products: It has become an important channel for premium product launches and purchases.
Reshma: What does the future look like for Modern Trade and General Trade?
Sudhir: Modern Trade needs to evolve into an experiential and frictionless hub, much like how malls have transformed into destinations for entertainment and food.
General Trade in the top 20 metros will undergo significant reduction and transformation. However, it will continue to remain dominant in Tier 2 and Tier 3 towns and rural markets.
7. Omnichannel Strategy, Marketing Skills and the Success Triangle
Reshma: How should leaders structure an omnichannel strategy?
Sudhir: We need to move away from isolated product and channel strategies towards an integrated approach: a specific product for a specific channel in a specific geography.
The approach should be:
- Non-Negotiable Core: Distribute core products across all channels pan-India.
- Peripherals: Target specific channels or regions based on opportunities.
- Future Growth Legs: Experiment in markets with high total addressable market (TAM) potential.
Reshma: How has marketing changed?
Sudhir: Smart marketing is moving away from pure brand equity building towards online influencer spending and authentic, product-led brands.
Consumers are dissatisfied with legacy FMCG products, including issues such as hidden sugar levels. They are increasingly looking for transparency, finesse and information about product origins.
For marketers, the ability to create relevance is becoming essential.
Reshma: What is your philosophy of work?
Sudhir: My philosophy aligns with Naval Ravikant’s quote: “What sounds like work to others is play to you.”
Work should be fun, fully engaging and focused on personal craftsmanship.
Reshma: What is your Success Triangle for professionals?
Sudhir:
- Love, Passion and Curiosity: Liking what you do builds resilience and gives you the staying power to continue.
- Character and Values: Hard work, transparency and integrity help build trust within an organisation.
- Impact on Others: Your presence should energise the room and help lift the people around you.
Reshma: Sudhir, thank you so much for all your valuable teachings today.
Sudhir: Thank you, Reshma.