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Tag: Devendra Chawla

  • Encourages customers to celebrate life with good food

    Nature’s Basket rolls out digital video…

    By A Correspondent

     

    Fine food store Nature’s Basket has unveiled a digital film that encourages customers to celebrate life in these tough times. The video, which features Radio Jockeys – Hrishikesh Kannan, Jane Jeyakumar and Prithvi Vishwanath, also highlight’s the brand’s attention to detail and standards of safety. The film is conceptualised by Nature’s Basket and Adfactors PR.

     

    Said Devendra Chawla, CEO, Nature’s Basket and Spencer’s Retail: “The past few months have been really difficult for everyone and with the festive season beginning in India we wanted to do something to encourage people to celebrate life in their own way. Food has always been the centre of every celebration and Nature’s Basket, with its promise of safety and #TasteTheWorld, aims to make these moments even more special.”

     

     

  • Patanjali Ayurved injects new life into herbal market, helps rivals sell more personal care products

    Jai Patanjali! Jai Herbal!

     

    By Sagar Malviya & Neha Tyagi

     

    MUMBAI: In a short span of time, Patanjali Ayurved has not only made a name for itself among Indian consumers, but also fuelled expansion of the herbal products market and helped rivals sell more home and personal care products, grabbing share from MNCs.

     

    The Baba Ramdev-led company’s sales jumped 64 per cent to Rs 731 crore in the six months ended December and rivals Dabur and Himalaya grew in double digits in a consumer products market that expanded barely 6 per cent, according to IMRB data. The figures exclude commodity products such as ghee and atta.

     

    What’s helping these firms is a growing preference for Ayurvedic products known for natural ingredients and health benefits. In addition, herbal products are cheaper.

     

    “Patanjali has registered a near-80 per cent growth in penetration, which is about 5 per centage points on an absolute level, in one year,” said K Ramakrishnan, general manager, IMRB Kantar Worldpanel.

     

    “The first wave of growth came from personal care products only, but the recent growth has been driven by homecare and food and beverages, which still has a smaller base,” said Ramakrishnan.

     

    Patanjali started in 1997 as a small pharmacy in the holy town of Haridwar to make healthcare products and was incorporated in 2006 as a company to sell personal care, food and beverage products through its own outlets. The company expanded its reach from 200 Patanjali outlets in 2014 to 5,000 franchise stores currently and launched more than two dozen mainstream FMCG products as none of the existing herbal players catered to categories such as noodles, oats and detergents.

     

    In October last year, Patanjali formed a marketing partnership with Future Group, which will offer over 300 of its products in 77 categories through stores such as Big Bazaar in about 250 cities. Four months after partnering with Future Group, the country’s largest retailer, Patanjali products have cornered a 7-12 per cent share in categories such as detergents, toothpastes, soaps and shampoos at Big Bazaar stores. In food products including oats, noodles and honey, the share gains are 7-37 per cent, according to Dunnhumby, a UK-based research company that has tied up with Future Group for data science.

     

    Patanjali has grabbed share from non-Ayurvedic companies. While the growth of Ayurvedic brands in the face wash category increased to 50 per cent from 36 per cent earlier, the growth of non-Ayurvedic brands eased to 16 per cent from 21 per cent a year ago. The share of market leader Himalaya remained unchanged at 35 per cent as Patanjali gained 7 per cent share.

     

    In shampoos, sales of Ayurvedic brands more than doubled to 194 per cent, while for multinational companies, it declined to 15 per cent from 21 per cent earlier. Categories such as chyawanprash, amla and aloe vera juice saw growth double to 42 per cent, with Dabur retaining its 53 per cent market share.

     

    “This unusual phenomenon of consumer products market disruption is rare as brand erosion or loyalty for well-established brands generally doesn’t happen so quickly,” said Devendra Chawla, president, food and FMCG, at Future Group.

     

    Patanjali products were purchased by about 21 per cent of Future Group shoppers in January compared with 2 per cent in October. “While Ayurveda brands were always there, the entire category has now arrived with a bang, thanks to heightened awareness benefiting the overall ecosystem,” Chawla said.

     

    Patanjali attributes its success to consumer shift from non-Ayurvedic brands owned by multinationals to Indian herbal companies. Its products are on average 15-20 per cent cheaper than the competition and several rival companies have been running offers and promotions to compete with them.

     

    “Other Ayurvedic companies are coming up with good quality products at even cheaper prices, which is ultimately doing good. The country is huge and the FMCG market is so large that we may not be able to provide for everyone,” said Acharya Balkrishna, managing director at Patanjali Ayurved, adding that the company has almost met its sales target of  Rs 5,000 crore for the financial year ending March 2016, more than double the revenue of Rs 2,000 crore in 2014-15.

     

    Hindustan Unilever’s net sales increased 10 per cent to more than Rs 30,000 crore in the previous financial year and Colgate-Palmolive (India) sales rose 12 per cent to Rs  3,955 crore.

     

    Source:The Economic Times

    Copyright © 2016, Bennett, Coleman & Co. Ltd. All Rights Reserved

    Licensed to republish

     

  • Devendra Chawla, CEO, Food Bazaar, chronicles the many shifts in consumer behaviour and attitude over the last decade

    Now & then: Here’s how contemporary consumers behaved a decade ago

     

    By Devendra Chawla

     

    Consumers of today have evolved into a hyper active multi-taskers, constantly squeezing the 25th hour out of a regular day. Here are some of the most radical changes between contemporary consumers and how they behaved as recently as a decade ago.

     

    In this article, Devendra Chawla, CEO, Food Bazaar, chronicles the many shifts in consumer behaviour and attitude over the last decade.

     

    The star of a movie called ‘me.’

    Indian consumers are a liberated lot. It’s not hard to spot a 40-plus man in a colourful ensemble; green or red trousers, if you please. Women no more need male or peer endorsement as approval of what they wear or how they look. They expresses beauty in their own way – via choice of apparel and personal grooming.

     

    There’s friction building between conformity on one side and self identity on the other, as consumers see themselves as stars of their own movie. They want to play multiple roles and make many appearances.

     

    Hair streaking, frowned upon once, is now a style statement. So are male grooming products. Consumers can now choose facial structure, shape of nose, and skin type thanks to contact lenses, plastic surgery, botox jabs, etc.

     

    Yes, people do look up to trendsetters, but instead of aping them, prefer to create their own sense of style. Brands can no longer feed on the fear, insecurity, or preaching. This generation of consumers will make allies of brands that allow self-expression.

     

    They are a product of abundance unlike yesterday’s consumer, who was born in scarcity. And yes, today’s consumer may reject brands that claim to help one find a groom or a job based on the colour of skin.

     

    Zero to best in 2 seconds

    Upgrading sequentially from good to better and better to best stands disrupted. Now consumers parachute into the best of one category while at same time making a trade off in other categories for value deals. This approach sees many youth opting for a top of the line smartphone at the start of their careers, while eating at budget restaurants.

     

    Unlike the past, where category upgrades coincided with a change in income, now they make a trade off, choosing most premium in the category where they want the best and settling for good or better than average in others.

     

    What else can your product do?

    From a mere mode of communication, the mobile phone is a life supporting system including a music player, a portable gaming console, weight loss monitor, camera and most recently a shopping basket given the mania for e-tailing.

     

    An unlikely category like food is starting to take a few cues. While consumers sweat it out in gyms and perform yoga, food brands have been stretching from the role of satiating hunger to manage and support functions like weight management, stress and hypertension management, brain, muscle and bone development, height gain, etc via ingredients like Omega-3, vitamin and mineral premixes, co-enzyme Q10, etc.

     

    Products that provide convenience and perform with speed are much in demand. A case in point is the emergence of multigrain, multivitamin, multimineral food across the spectrum. Expect food to multitask more and provide more benefits.

     

    Back of the pack

    In a world where “you are what you eat”, consumers want to know what are they eating. The attention has shifted from the front to the back of the pack, an uncommon phenomenon 10 years ago. They are checking for ingredients, potential allergic reactions, gluten as well as carb, protein and energy values. Expect back of pack to become more engaging than just being statutory information.

     

    Even home food gets ‘outsourced’

    Banks have outsourced many functions, opting for a tight focus on the core. And so, even if a consumer calls a BPO, they are still dealing with the bank brand. The same applies for telecom operators and many other industries. As more women step out to realise their ambitions, they’ve kept the flag flying for home cooked meals.

     

    What has been outsourced here is preparatory functions like cutting vegetables; either left to the maid or the supermarkets which stock precut veggies. This has also given rise to fruit platters, ready batters, pastes, mixes, powders, etc.

     

    The last mile is where the lady of the house has her hands and eyes, converting all these first stage conveniences to home cooked food, thus serving as the gateway for customised meals. The kitchen is a food factory with multiple gadgets and ingredients allowing even the time pressed lady to convert the dining table into a “food court at home on demand.”

     

    Again an uncommon phenomenon 10 years ago. Here each family member can have different cuisine sitting next to each other, yet with the final touch of it all being home cooked food.

     

    Cooking is the new golf

    From provider to a nurturer – the role of the man is undergoing a radical change. The kitchen is his new golf course, even if occasionally, these activities compete with each other. As more women step out, men find themselves taking care of the house, children and the kitchen.

     

    Punishments works better than complaints

    Reactions to brands have never been so quick, personal and unique. The old cliché about a happy customer telling three people and an unhappy one telling ten has been unimaginably amplified in a world powered by social media where consumers routinely pour out their emotions to hundreds or maybe even thousands of friends and followers. The power of an organisation or brand is all but equal to one consumer’s tweet or Facebook or YouTube post.

     

    Remember, “United breaks guitars”, by Canadian country band Sons of Maxwell? A complaint song about a broken guitar on a United Airlines flight has grossed 14,299,132 views on YouTube at last count.

     

    Brands must prepare to listen to consumers 24/7 specially when it comes to grievances. As consumers do things they never imagined they could and experimentation is order of the day, they are moving from transactions to experiences. While consumers have been upgrading, its time for marketers to upgrade more often.

     

    Source:The Economic Times

    Copyright © 2014, Bennett, Coleman & Co. Ltd. All Rights Reserved

    Licensed to republish

     

  • Consumer product companies have confirmed the slowdown in product launches and said they will bring out new variants and products once overall market improves

    FMCG product launches dry up in a tough market

    By Ratna Bhushan & Sagar Malviya

     

    Consumer product companies drastically cut down on product launches in 2013 to avoid additional cost pressures in a year when sales growth slipped to a decade low. Growth in product launches in the fast moving consumer products (FMCG) segment dropped to just 5 per cent last year from 35 per cent in 2012, according to data shared by research firm IMRB. Consumer product companies confirmed the slowdown in product launches and said they will bring out new variants and products once overall market improves.

     

    “This is not the best time to launch new products. We are waiting for consumer sentiment to improve, which we believe will be in the second quarter of the next financial year,” Sunil Duggal, chief executive officer at Dabur India, said. Dabur restricted its new products, Real drinking yogurt and premium chyawanprash Ratanprash, to select markets instead of a national rollout.

     

    Companies want to keep their expenses low even as they increase ad spends to protect existing brands and roll out higher promotional offers or price cuts to mop up volume growth. “Any FMCG company will have to take into consideration the high expense of taking a new launch national. The second half last year was bad in terms of cost perspective,” said Anil Chugh, senior VP at Wipro Consumer Care and Lighting.

     

    Consumer product companies have been facing relentless rise in the prices of raw materials such as crude and palm oil that went up by 19 per cent and 32 per cent, respectively, in the last 12 months. Consistent demand pressures weakening margins also resulted in the BSE FMCG Index underperforming Sensex by 10 per cent in the past six months. Some experts, however, feel marketers are making a mistake by not exciting a dull market with new launches. “It’s an irony that marketers take upon themselves to open consumers’ purse strings while they themselves tighten theirs,” Devendra Chawla, CEO at Future Group’s Food Bazaar, said. He said companies that continue to invest and innovate in a slowdown will benefit once the economy rebounds.

     

    According to IMRB’s group business director Manoj Menon, categories such as tea, breakfast cereals, hair, washing powders and noodles drove the slowdown last year while skincare and oralcare products saw higher launches.

     

    Several product launches in the past three years have been in the premium category – a space which slowed down the most as consumers cut back on discretionary spends.

     

    Some companies said the slowdown in product launches is temporary and it will pick up in the coming months as raw material prices stabilise and food-inflation is controlled. That’s already happening in some cases. L’Oreal has introduced a hair care range called 6 Oil Nourish, ITC has launched Sunfeast Farmlite and Procter & Gamble has rolled out a shampoo for men -Head & Shoulders Men. A recent Goldman Sachs report said marketers expect things to improve after the general elections. “Most companies pinned hopes on improved consumer sentiment post elections,” it said.

     

    Source:The Economic Times

    Copyright © 2014, Bennett, Coleman & Co. Ltd. All Rights Reserved

    Licensed to republish

     

  • Colgate MD Prabha Parmeswaran gets aggressive to edge out P&G's newly launched Oral B toothpaste

    Colgate launches offensive to take on P&G’s Oral B toothpaste

    By Kala VijayaRaghavan & Sagar Malviya

     

    Last week, when Procter & Gamble launched Oral B, its first toothpaste in India, perhaps no one else was watching it more closely than Prabha Parameswaran, the MD of rival Colgate, also the market leader in the Rs 5,000-crore oral care market.

     

    Ms Parameswaran’s swift and no-holds-barred retort to the P&G threat has by all accounts left the latter overwhelmed in the market.

     

    A heap of 250-odd Colgate toothpaste packs greets customers at a leading supermarket in the suburbs of Mumbai. Almost each of the neatly stacked packs forming a mini-pyramid has either BOGO (buy one get one) printed on it or carries reduced price tags. Here and across 4.5 million retail outlets, Colgate is being a shameless bully, elbowing P&G out of any shelf space. It is throwing toothbrushes, pastes, and brand events and promotions with trade partners, and discounts, all to deny or delay giving P&G even a toehold. Such promotional intensity wasn’t there even two weeks ago.

     

    “Several large retailers haven’t even stocked P&G’s new toothpaste as the margins offered were lower than Colgate and GSK,” said two officials at leading supermarkets.

     

    This is already turning out to be a costly battle – Colgate has hiked its advertising and promotion spends by 31% during the first half of this calendar year.

     

    Devendra Chawla

    “There has been a new-found aggression in Colgate during the past year,” says Devendra Chawla, president-Food Bazaar at the Future Group.

     

    P&G India is hardly a wimp when it comes to a scrap for market share. The Cincinnati-headquartered company has had dozens of such brawls with arch rival Unilever in segments such as detergents, shampoo and skin creams. But this is the first time P&G is wrestling with Colgate.

     

    “Though it is still very early, our launch of Oral B toothpaste and initial plans are very much on track,” a P&G spokesperson said, responding to an email about the battle with Colgate. “We are very pleased with the response and support we are receiving from both our customers as well as the professional community.” Ms Parameswaran, 51, too is quite familiar with the exertions of such battles. Before she was elevated to the top job in India, she had fought P&G for over a decade at their home turf – the US – and more recently Mexico, where she was the marketing head until 2012. Colgate controls more than half the market and Ms Parameswaran is fiercely guarding every inch. In the months preceding P&G’s first toothpaste launch, she was hitting the roads, meeting dealers, distributors and trade partners, say sources in direct know of things. A media-shy Colgate declined comment. “Ms Parameswaran has fired up the organisation,” says a highly placed official privy to recent happenings within Colgate.

     

    Since she took charge in February 2012, Colgate’s market share has increased from 53.1% to 55%, its highest since 1998, and a rare instance of a market leader gaining new ground. In the same period, its stock has risen 41%, even as the BSE Sensex has gone up just 14%. “Colgate is like a well-oiled machine. What a very good leader can do with such a welloiled machine is what is happening now at Colgate,” says Abneesh Roy, associate director at Edelweiss Securities. “Usually, the market leader tends to protect share rather than drive further growth. Colgate has managed growth under Ms Parameswaran,” he adds. Roy, who had met Ms Parameswaran recently, says she comes across as an extremely savvy marketer with a curiosity to know what is happening in other categories.

     

    “Colgate has usually tended to do well under attack, earlier from Pepsodent and later from low-cost brands such as Anchor,” says Vikram Kaushik, ex-MD of Tata Sky. He was executive vice-president (marketing) at Colgate-Palmolive (India) in 2004. Ms Parameswaran has worked with Colgate for two decades. She started off with experiences across verticals including initiatives to revitalise its personal care business that included the launch of Palmolive Naturals soap, Palmolive Optims and the male toiletries and skin care equities. She moved to New York as associate director (global business development), oral care, in 1997, and was later the vice-president (marketing) for Colgate India between 2007 and 2009.

     

    Ms Parameswaran worked with Lintas India (now Lowe Lintas) before joining Colgate and had handled HUL campaigns, including ‘Zara sa Rin!’, ‘Dur ho ja meri nazron se!’ (for Wheel) and ‘Dhoondte reh jaoge!’ (for Surf Ultra). “I remember her then for her team leadership skills as well as witty sense of humour. She was extremely insightful,” says Pranesh Misra, chairman & MD, Brandscapes Worldwide. He had worked along with Ms Parameswaran in Lowe Lintas on HUL brands. “After years at Colgate in different geographies and roles, she has further sharpened her skills in marketing and business leadership,” he adds.

     

    (With inputs from Amit Bapna)

     

    Source:The Economic Times

    Copyright © 2013, Bennett, Coleman & Co. Ltd. All Rights Reserved

    Licensed to republish

     

  • Both are responding to the changes in consumption patterns in India's Rs13,000-crore soft drinks market, according to experts

    Coke & Pepsi to sizzle summer with more drinks

    By: Ratna Bhushan

     

    Forget the Cola war; Coca-Cola and PepsiCo are heading for a high-pitched battle in the flavoured soft drinks segment this summer.

     

    Soon after reviving lemon drink Citra, Coca-Cola has decided to give fresh lease of life to orange drink Crush and tonic water Schweppes, said an industry official aware of the development.

     

    Rival PepsiCo, which has rolled out two variants of orange drink Mirinda and revived lemon drink Duke’s after a seven-year hiatus, plans to launch more flavours under its clear-lime brand 7Up, said trade insiders.

     

    Both are responding to the changes in consumption patterns in India’s Rs13,000-crore soft drinks market, said experts. “Flavours are growing faster than colas…heightened focus is recognition of the demand,” said Ravi Jaipuria, PepsiCo’s biggest bottler in South Asia.

     

    Crush For the Masses

    Coca-Cola plans to revive Crush and Schweppes, which it bought along with clear lemon Canada Dry as part of a global acquisition of Cadbury Schweppes soft drink business in 1999. Crush, like Citra, may target the low-income group with a lower price tag than Coca-Cola’s own Fanta orange drink, said an official familiar with the development. “That way, both brands can co-exist.”

     

    Schweppes tonic water and premium soda will be taken national across more than 10,000 outlets, and will be packaged in cans, the official says. Currently, Schweppes is available only in non-returnable glass bottles in a few restaurant channels and select modern trade stores.

     

    A Coca-Cola spokesman declined comment on the forthcoming launches of Crush and Schweppes, but said: “A combination of our ‘occasion, brand, pack, price, channel’ architecture along with brand activation plans and route to market focus will help us capitalise on the existing opportunity in the flavours segment.”

     

    Coca-Cola is already in the process of reviving Citra, which it had acquired from Ramesh Chauhan two decades ago, priced about 20 per cent cheaper than existing lime lemon drinks, Sprite and Limca, mainly to fight smaller regional B-brands.

     

    Unprecedented Rush

    Devendra Chawla, president of food and FMCG businesses at the country’s largest retailer Future Group, said launch of so many flavours and brands in one season is unprecedented in the industry. “While there would be some casualties among these by end-season, it’s good for the industry as India’s share of throat of soft drinks is minuscule; this engagement will grow consumption,” he added.

     

    Some experts say that a key factor that helped flavours outgrow colas is the widespread belief among Indian consumers that flavoured soft drinks are less harmful to the body than colas.

     

    Ruchira Jaitley, PepsiCo’s executive VP marketing, beverages (flavours), said flavours are growing in high double digits, without sharing exact numbers.

     

    But surprisingly, the new Mirinda flavours will be around only for three months and go off the shelves before peak season of May-June.

     

    Late last year, PepsiCo had relaunched its age-old Duke’s range of beverages, mainly as a regional brand in Mumbai, in lemon, raspberry and gingerale variants. It bought Duke & Sons in 1995. The rush for flavours is in the packaged juice segment as well.

     

    Source:The Economic Times
Copyright © 2012, Bennett, Coleman & Co. Ltd. All Rights Reserved
  • Contribution of premium items is growing in most FMCG categories, giving a breather to marketers fighting rising input costs and slowing overall demand

    Young urban users and modern trade boost demand for premium FMCG products

    By A Correspondent

     

    Makers of packaged food and personal care products are increasingly focusing on premium products as rising aspirations of young urban consumers and widening reach of modern trade help boost demand for high-value, high-margin products.

    Contribution of premium items is growing in most FMCG categories, giving a breather to marketers fighting rising input costs and slowing overall demand, particularly in rural areas.

    “Consumers are moving from value-added products to products that offer value benefits,” said Shirish Pardeshi, executive director and co-head, research, at Anand Rathi Securities.

    Big retailers play a key role in increasing demand for premium products within a category, by helping companies directly engage with consumers.

    Future Group, the country’s largest retailer, has reported premiumisation in the last several quarters. “Consumers are upgrading and there is not much impact of the external economic scenario,” said Devendra Chawla, president, Future group food and FMCG businesses.

    Mr Chawla said the trend of premiumisation is high in categories like soaps – the premium variants (priced above Rs 35 per soap bar) accounts for 40 per cent of sales at Big Bazaar – biscuits and detergents.

    Premium cream biscuits and cookies are growing 20-25 per cent a year, double the pace of mass variety Glucose and Marie biscuits, according to Parle Products, the country’s largest biscuit maker.

    Contribution of Glucose and Marie to the biscuit market has slipped to around 55 per cent from 65 per cent in the past one year, according to B Krishna Rao, group product manager of Parle Products.

     

    SUPERMARKET DRIVE

    Modern retail has been the saving grace for FMCG companies that had warned of slower growth this fiscal, more so after they had to resort to multiple price hikes of up to 15 per cent due to increases in commodity costs and pressures on margins.

    Retailers such as Future Group and Spencer’s Retail have reported rise in average purchase size of most product segments, confirming the premium drive.

    Anand Mour and Shariq Merchant, analysts with financial services firm Ambit Capital, wrote in a report in January that growth is moderating in rural India, but aspirational consumption of young urbanites is driving premiumisation. Expansion of modern retail, which accounts for less than 10 per cent of the country’s Rs2 lakh crore retail market, will facilitate this premium drive.

    A recent Nielsen study expects Indian shoppers to increase spending on FMCG at modern retail to $5 billion, or about Rs24,700 crore, by 2015 from $1.8 billion, or Rs8,900, in 2011.

     

    NEW PRODUCTS

    “Absolute price is no longer the only consideration, the price benefit equation is what needs to be managed,” says Jayant Kapre, president of McVitie’s India, a subsidiary of British confectionery firm United Biscuits. The firm has rolled out a premium range of McVitie’s Hob Nobs biscuits.

    Now Nestle is expected to launch a chocolate dessert called Fudge priced at Rs200, according to industry insiders. GSK has launched Horlicks Gold at a 30 per cent premium and within six months it has generated sales equal to 3 per cent of the more than Rs1,500-crore flagship brand. Marico, Dabur and ITC are all gung-ho about such products.

     

    Source:The Economic Times

    Copyright © 2012, Bennett, Coleman & Co. Ltd. All Rights Reserved

     

  • A Coca-Cola spokesman confirmed the company is introducing Citra in "a few towns in Maharashtra and Gujarat" on a pilot basis

    Eye on volumes, Coca-Cola to revive Citra after 19 years

    By Ratna Bhushan

     

    Coca-Cola will revive Citra, a clear-lime drink it bought from Ramesh Chauhan two decades ago but junked in favour of Sprite, in a move that analysts believe is more to target price-sensitive consumer segments than to unlock the brand’s heritage value.

     

    A person familiar with the top beverages maker’s plans said Citra will be priced about 20 per cent cheaper than existing lime-lemon drinks such as its own brands Sprite and Limca as well as PepsiCo’s Mountain Dew and 7 Up, to target a wider audience and take on smaller brands.

     

    A Coca-Cola spokesman confirmed the company is introducing Citra in “a few towns in Maharashtra and Gujarat” on a pilot basis. This will be followed by a staggered launch across other metros and bigger cities.

     

    The move has surprised industry watchers because Coca-Cola’s Sprite, the second-largest soft drink brand in the country after Thums Up, leads the lime-lemon drinks segment, which is the fastest-growing soft drink category in India’s Rs13,000-crore fizzy drinks market.

     

    Among those surprised is Ramesh Chauhan, who created brand Citra and made it popular in the late 1980s and early 1990s.

     

    “After keeping the brand in cold storage for so many years, it’s strange they want to re-introduce it now, especially when they have a strong presence in the clear-lime segment,” Chauhan said. “If they are looking for retention and heritage value, then logically even Gold Spot should be revived.”

     

    When Coca-Cola re-entered India in 1993, it bought out all Parle brands except Bisleri from Chauhan.

     

    Move aimed at mopping up volumes

    While Citra and Gold Spot were phased out to make way for Coca-Cola’s global brands Sprite and Fanta, respectively, Thums Up, Limca and Maaza were retained. Shashi Kalathil, CEO of management advisory firm Y-factor and partner at private equity fund Exponentia Capital, said the move may be aimed at mopping up volumes. “Coca-Cola probably doesn’t want Citra’s pricing to impact its larger brands. So this could be more of a pricing game and about treating Citra more as a trademark than a brand,” he said.

     

    Parle brand again

    It’s history that the US major sidelined Parle’s cola brand Thums Up to promote its own brand Coca-Cola for years before waking up to the potential of the Indian brand and backing it.

     

    Now it seems like deja vu for Coca-Cola as it is banking on a Parle brand once again to push market share in the lime segment. The Coca-Cola spokesman said Citra would not cannibalise its existing lemon drinks because there is ample room for multiple brands in a developing segment like sparkling fizzy drink in a high-potential market such as India.

     

    Devendra Chawla, president of food & FMCG segments at the country’s largest retailer Future Group, said the move will aid the growth of the clear-lime category, which is already seeing heightened brand activity. “To grow carbonated soft drinks’ per capita in India, apart from growing colas, it’s critical to activate flavours which have natural acceptance from Indian consumers such as lime and mango,” said Chawla, who formerly worked with Coca-Cola.

     

    India’s per capita consumption of carbonated drinks is just 11 litres a year compared to 34 litres in China and 675 litres in Mexico.

     

    The lime-lemon category in India has been growing 16-17 per cent a year, ahead of colas at about 11-12 per cent and orange drinks at 8-9 per cent. Apart from being a familiar flavour that Indians consume at home (in the form of nimbu paani), lime-lemon drinks are considered ideal thirst quenchers.

     

    Both Coca-Cola and PepsiCo have been promoting their brands aggressively in this segment. PepsiCo has Bollywood star Salman Khan endorsing Mountain Dew and actor Sharman Joshi for 7 Up, while Coca-Cola pushes clear-lime drink Sprite and cloudy lemon drink Limca on the irreverent and freshness platforms, respectively.

     

    Source:The Economic Times

    Copyright © 2012, Bennett, Coleman & Co. Ltd. All Rights Reserved

  • This strategy is not only giving smaller brands a pan-India presence, but also helping them reap dividends

    Small regional brands get modern retail push

    By Sagar Malviya

     

    Small and regional brands are tying up with retail giants to push their merchandise, as middle-class Indians shift from mom-and-pop stores to the comfort and variety of modern retail.

     

    The latest to join the bandwagon is ayurvedic products maker Baidyanath Ayurved Bhawan. The 95-year-old company has tied-up with Future Supply Chain Solutions, the logistics arm of retail giant Future Group to widen its consumer base and boost its position in the health products segment where it competes with Dabur and Emami. The Kolkata-based company will use Future Supply Chain’s network to sell its ayurvedic medicines, tonics, hair oils and toothpastes in more than 2,000 outlets in the country.

     

    Future Supply Chain serves several large retailers besides the parent group’s Big Bazaar.

     

    “More than just sales, modern trade gives a very high visibility that’s important to us. Also, it’s an easy way to break into newer markets without investing substantially in distribution,” said Ameve Sharma, president of the over 350-crore Baidyanath.

     

    This strategy is not only giving smaller brands a pan-India presence, but also helping them reap dividends. Within a year, the share of organised retail in total sales of brands such as Wagh Bakri tea, Super-Max shaving products, Nilon’s pickles, Dukes biscuits, NR Group’s Ripples fragrances has risen from near zero to about 15%.

     

    “Due to consumers moving and settling across geographies within the country, we are able to support small and regional brands get national footprint and also where relevant communities stay,” said Devendra Chawla, president of FMCG and food at Future Group. “For several small vendor partners, setting up distribution networks can mean lot of resources and costs. Modern trade is the quickest route to market in relevant markets,” he added.

     

    The move is also partly driven by the need to be where the competition is. “You have to be where your competitors are,” said Ravi Chandra, general manager, sales and marketing at Super-Max Personal Care, which earned 2% of sales from modern trade from just 0.2% a year earlier. “We have heightened our focus on modern trade as our product portfolio matched the target consumers of these stores,” Mr Chandra added.

     

    Nilon’s, the country’s largest pickle brand that was available in some 100 stores two years ago, is now available in 400 stores.

     

    “We were hardly present earlier in Mumbai and Tamil Nadu. We realise that the future in big cities is through large outlets,” said Nilon CEO Rajheev Agrawal. The company has seen sales from modern retail rise from 7% to 15%. Future Supply Chains, which works with 20 such clients, has added half of its clients over the past one year.

     

    “No distributor has an all-India presence, and that’s where we come in. We also take care of shelf and merchandise management,” saidAnshuman Singh,MDand CEO of Future Supply.

     

    However, firms say that jump-starting sales has its own problems. The margin for modern trade is higher than that of general trade, and small brands end up paying about 10% more than their bigger counterparts. But they are not complaining. “The fallout of margins is basically on the return on investments calculations and large stores are increasingly giving higher throughput,” said Mr Chandra.

     

    Also, these firms are getting into premium products, which need the platform of modern trade. For instance, Baidyanath is entering soaps and shampoos while Wagh Bakri Tea is focusing on tea bags and instant tea.

     

    This trade route has another plus: when a retailer expands, it carries the product with it. “Retailers have almost doubled their stores. This means more sales of our products,” said Anik Mukherjea, chief business creator (fragrances) in NR group, the Mysore-based maker of Cycle Agarbattis and Ripples.

     

    Source: The Economic Times

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