Image: Amit Verma
Rakesh Kapoor, the 59-year-old CEO of FMCG major Reckitt Benckiser (RB), is a man on a mission. Last year, the company spent a staggering $18 billion to buy Mead Johnson Nutrition, a leading manufacturer of baby formula, in its attempt to turn around RB’s fortunes and explore newer avenues of growth. The acquisition has paved the way for what Kapoor describes as RB 2.0, which includes separating its home care and health businesses.
RB—headquartered in Slough, England, and the maker of Durex condoms, Dettol, Scholl, Nurofen, Strepsils, and Vanish—reckons that the Narendra Modi government’s increased focus on health care and Swachh Bharat are huge platforms towards ramping up the company’s growth in India. In an interview with Forbes India
, Kapoor talks about the company’s vision, the importance of the Indian market and the need for self-care. Edited excerpts:Q. What brings you to India?
India is an important market for us, but we want it to become an even more important one. My interest lies in seeing what we can do better in the country. We want to forge a partnership with the government to push our purpose and vision of healthier lives with hygiene. We have already taken on 1,000 villages to figure out how to make an impact in terms of hygiene education. We have written school curriculums to promote good hygiene practices leading up to areas like malnutrition, infant mortality and stunting. We have been very receptive to the government. Q. What is your assessment of the Swachh Bharat movement?
Swachh Bharat Abhiyan, in my opinion, has many dimensions. One is the superficial aspect that everybody wants to see—a cleaner city, cleaner community and so on. Beyond that, however, there are fundamental areas, which are social issues too. Building toilets isn’t about hygiene. It is about how we bring social norm and social practices to the country. And the next aspect is health. Swachh Bharat is not an end in itself. It is a means to Swasth Bharat. We have a vibrant population, but at some point, it’s going to grow older. I don’t think we have the infrastructure and capacity to deal with the type of health issues that we could see [in the future] without basic hygiene and basic education on how to keep us healthy.
Our focus is to bring in some basic changes in terms of behaviour—getting people to wash their hands regularly, clean their surroundings, bring their children up in more hygienic ways, avoid diarrhoea and repeated diarrhoea which causes malnutrition and stunting. We also want to work on wider issues of health. Pollution is a huge issue in some cities, not just in India, but also globally.
We launched something here recently which isn’t just a mask; it comes with a microfilter, so you don’t feel like you are choking. We are working on many dimensions to provide solutions to India. We want to do something here.Q. What are some of the plans specific to India?
It is all about making an impact. The plans range from building toilets to keeping them clean. The second is the area of hygiene at home and outside which is all about how to prevent diarrhoea, how to stop people from passing on their illness through contact… so it’s all about hand hygiene, surface hygiene. The third area we are talking about is the area of stunting and nutrition while the fourth is air [quality].Q. Is this focus on health a part of RB 2.0?
The whole purpose-driven strategy of RB was set about six years ago when we said that the reason we exist is to provide innovative solutions for healthier lives. While we should do that through our innovations and products, we must also play a wider role.
What we are trying to achieve somehow marries with the purpose of the country. We took an important step in February 2017 with the acquisition of Mead Johnson Nutrition. Mead Johnson is still not a big company in India, but it is a massive firm in so many parts of the world. We paid nearly $18 billion for it. We want to use that platform to enhance our scope for a healthier life.Q. How does the acquisition help?
Mead Johnson is about serving and nourishing the best start to life in the first 1,000 days of a child’s life. The first 1,000 days are the most important ones for determining the long-term health, and in many cases the potential, of a child. At RB, we never had anything that could enable and help in those 1,000 days. That’s where Mead Johnson comes in.
It gives us access to so many things to do with nutrition, stunting, etc. Beyond that, what it gives us from a strategic and company level point of view is access to emerging markets beyond India. They have a huge business in Philippines, Vietnam, and China which are important markets for growth. Our health business nearly doubled [since the acquisition]. Our emerging markets business went up by 60 percent.
To achieve the potential of our brands and the necessary impact, we have created two coherent businesses.Coherent because the health brands work with each other and the hygiene home brands do the same. We have given both these business units end-to-end accountability, which means they are fully equipped in the frontline with independent sales forces, independent marketing teams, independent R&D and independent people management.
We hope that this exercise will do a better job of innovating for healthier lives and happier homes, and for improving our performance. In India, we’ve had a terrific track record of growth and performance. But we cannot be happy with just being the best performing company in India, we want to do even more. Q. Since the focus seems to be on health, are you happy with the Indian government’s stress on health care like we saw in the budget?
I am delighted with that because a country cannot prosper if it does not have health on top of its agenda. This government has brought it up. I am glad that we are bringing affordable health care to everyone. It’s a good step and I would also like to see the government providing a framework for self-care.
If you think about it, globally there are fairly advanced systems and policies around self-care. If you have a headache or a common cold or an ailment, you have enough knowledge and expertise in the world of digital technology and information to make informed choices and do the right thing. But the fact is many everyday medicines are not sold over the counter. You need prescription. You can argue whether people really get a prescription or they find a way of shortcutting the system.
We need proper processes and policies to provide people access; access isn’t just providing it through a backdoor system of people getting [medicines] without prescription, but a formal system where we can provide access, not just in one type of store, but everywhere, whichever way people want to shop. People want to shop using different channels and therefore access is important. And if we want to promote a better health outcome, the government has to play a role. But we also need to enable and empower people to take health in their own hands. And the way they will be able to do that is if there is a policy or framework for self-care. We are working closely with the government on this. Q. What would that policy on self-care include?
It would include, for instance, what kind of product active ingredients can be made available in the mass market without the need for a prescription. For example, when you go to the US or UK, you can buy a lot of everyday products in any store without a prescription. The benefit to the government here is not just that it reduces the pressure from an economic point of view, but it also reduces the burden on the medical system and medical infrastructure.
This country will have a challenge of coping up with the medical infrastructure, doctors, nurses and medical practitioners. How do you reduce that pressure? Without a policy on self-care, you are going to have an issue. That’s what we are working on with the government. We have been invited to be part of a small group of people who are helping get the policy, but actually, it’s been a long time coming.
But now, I am glad that it is happening. It should happen in the next few years. It’s clearly understood that without a self-care, over-the-counter policy, we will never be able to empower people.
The other thing I would love to see, and I don’t know how exactly it will shape up, is where the regulation is such that we do not need to reprove what is over-the-counter once again in the country.
That is not just a problem of India, it’s a global problem. It is funny that a product, which is available over the counter in the US, which means that people have been using it for a long time and it’s proven to be beneficial, is still not sold over the counter in some countries in Europe, for instance.
This isn’t good. If we have done clinical trials and proven its safety, if it is being tested in markets, it should automatically work for people across the globe.
So, I would like to see a progressive policy, where if you have something over the counter for a long period of time with proven efficacy and safety, it should automatically be allowed over the counter without having to go through a huge review process, which will only cause delay. Q. Do you see those as challenges in India? Particularly with red tape and policies?
The real challenge at the end of the day is the human capacity to fulfil the potential that we have. The opportunity is limitless. The only limit is the human capacity to serve that opportunity.
I am one of those people who likes these progressive policies; I like them to be faster, more expensive and forward-looking instead of being restrictive. But then we have grown by double digits in the last decade without these policies too. So the issue is not whether these policies will come and open the floodgates; at the end of the day, it is human capacity to realise what is attainable and possible. I am more philosophical about it.
(This story appears in the 30 March, 2018 issue of Forbes India. You can buy our tablet version from Magzter.com. To visit our Archives, click here.)