In­dian Food Cos Give MNCs a Run for Their Money

Home-grown Amul, Mother Dairy, Bri­tan­nia, Parle & Ruchi Soya gain higher mar­ket share in pack­aged foods, out­pac­ing global gi­ants Nes­tle, Mon­delez & Pep­siCo, says a study

The Economic Times - - Business Of Brands - Ratna.Bhushan@ times­group.com

New Delhi: Home­grown firms such as Amul, Mother Dairy, Bri­tan­nia, Ruchi Soya and Parle Prod­ucts dom­i­nated the coun­try’s pack­aged foods sec­tor in 2015 even as Swiss gi­ant Nes­tle slipped five places to sev­enth in over­all rank­ing, says a new re­port. The data from mar­ket re­searcher Euromon­i­tor shows only three multi­na­tion­als — Mon­delez, Nes­tle and Pep­siCo — fig­ured in the top 10 play­ers by mar­ket share across pack­aged foods as do­mes­tic firms in­creased dis­tri­bu­tion, pen­e­trated into ru­ral In­dia and launched smaller packs at lower price points.

Ac­cord­ing to Euromon­i­tor, the In­dian pack­aged foods mar­ket stood at .₹ 2,572 bil­lion last cal­en­dar, up about 15% from .₹ 2,232 bil­lion in 2014. “Do­mes­tic man­u­fac­tur­ers dom­i­nated pack­aged food in 2015, whereas in­ter­na­tional play­ers still have to un- der­stand the dy­nam­ics of the In­dian con­sumer mind­set. Do­mes­tic man­u­fac­tur­ers are also in­creas­ing their prod­uct port­fo­lios,” said Euromon­i­tor In­ter­na­tional re­search an­a­lyst Man­ju­nath Reddy.

The shares, by re­tail sales value, cap­tures data which in­clude sale of fresh, pack­aged and pre­pared foods for home prepa­ra­tion and con­sump­tion. Amul con­tin­ued to top the pack­aged foods mar­ket with 7.2% re­tail value share last cal­en­dar, while Nes­tle, which was the sec­ond largest player in 2014, saw its share drop al­most a third to 2.9% in 2015 from 4.2% in the pre­vi­ous year due to the im­pact of a ban on its flag­ship brand Maggi that kept the pop­u­lar in­stant noo­dle brand out of shop shel- ves for five months.

This helped dairy brand, dairy prod­ucts and fruits and veg­eta­bles firm Mother Dairy to grab the sec­ond spot be­hind Amul.

Last fort­night, Gu­jarat Co­op­er­a­tive Milk Mar­ket­ing Fed­er­a­tion (GCMMF), seller of Amul cheese, milk, ice-cream and but­ter, re­ported a turnover of .₹ 23,000 crore for 201516, an in­crease of 11% over the pre­vi­ous year.

“We’ve fol­lowed an um­brella brand­ing strat­egy, bet­ter prices, nat­u­ral in­gre­di­ents, and don’t spend much on mar­ket­ing, celebrity as­so­ci­a­tions, trade dis­count­ing, and so on. We don’t waste as­sets on build­ing and main­tain­ing too many brands,” GCMMF man­ag­ing di­rec­tor RS Sodhi said.

While each of the top five brands on the Euromon­i­tor list were home­grown, only three of the top 10 were global foods brands.

“Re­spon­sive­ness to chang­ing con- sumer mind­sets and fo­cus on lo­cal tastes and flavours is what is help­ing us drive top lines,” said Mother Dairy Fruit & Vegetable man­ag­ing di­rec­tor S Nagarajan.

Mother Dairy has now taken its lo­cal­i­sa­tion fo­cus deeper with the launch of re­gional flavour ‘nolen gur’ (palm jag­gery) flavoured ice-cream in Kolkata. Nolen gur flavoured ice-creams so far have been re­stricted to un­branded play­ers.

Like Amul, Mother Dairy, too, has steered clear of ex­pen­sive celebrity en­dorse­ments.

Nes­tle’s Maggi, which re­turned to mar­ket in Novem­ber last year af­ter a gap of five months due to a ban by food reg­u­la­tor Food Safety & Stan­dards Au­thor­ity of In­dia (FSSAI), re­turned to lead­er­ship po­si­tion last month with close to 50% share in the .₹ 2,000 crore in­stant noo­dles cat­e­gory. Maggi’s mar­ket share, how­ever, is sig­nif­i­cantly lower than what it was be­fore the con­tro­versy.

Lo­cal brands have kept a lean cost struc­ture by re­frain­ing from celebrity en­dorse­ments and have been com­pet­i­tive in their pric­ing

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