Ed­i­ble Oil’s Part of Health­care at Home

The Economic Times - - Brands: Creating Desire - SA­GAR MALVIYA & MADHVI SALLY

Mumbai | New Delhi: Oils sur­passed dairy as In­dia’s largest pack­aged­food item, un­der­pinned by in­creas­ing aware­ness among con­sumers who now pri­ori­tise health and hy­giene over expenses on the sta­ple cook­ing medium. Sales of cook­ing oils in­creased 22% at ₹ 1.05 lakh crore, out­pac­ing dairy that was be­low ₹ 1 lakh crore dur­ing 2016, ac­cord­ing to Euromon­i­tor In­ter­na­tional. Do­mes­tic com­pa­nies har­nessed their last-mile dis­tri­bu­tion net­work be­yond metropoli­tan cen­ters to dom­i­nate sales: The top five com­pa­nies in the over­all pack­aged foods in­dus­try worth ₹ 3.5 lakh crore were home­grown.

Ang­shu Mal­lick, chief op­er­at­ing of­fi­cer at Adani Wil­mar that sells the For­tune brand of cook­ing oils, said ru­ral In­dia was at the van­guard of sales growth. “Peo­ple are be­com­ing con­scious of what they eat. The per capita con­sump­tion of ed­i­ble oil too has in­creased from 8 kg per per­son an­nu­ally to 16 kg in the past one decade,” he added.

Sales are in­creas­ing by more than 25% in ru­ral In­dia, where in­creas­ing far­m­gate prices of ce­re­als and veg­eta­bles are help­ing broaden the con­sumer base. The in­tro­duc­tion of smaller and more af­ford­able pack sizes is also bring­ing more pack­aged food cat­e­gories within the reach of price-sen­si­tive con­sumers in semi-ur­ban and ru­ral In­dia. By con­trast, com­pa­nies are stress­ing health and

well­ness through in­no­va­tive mar­ket­ing in ur­ban In­dia, help­ing shift value to the pre­mium end of the spec­trum. Ruchi Soya, the third largest com­pany within the foods seg­ment, launched the “Kill lethargy with Sun­rich Sun­flower Oil” cam­paign as part of the strat­egy to fo­cus on health and well-be­ing: Sim­i­larly, Adani Wil­mar sought to at­tack di­a­betes, a con­di­tion that af­fects mil­lions of In­di­ans, with the For­tune VIVO di­a­betes care oil.

Siraj Chaudhry, chair­man, Cargill In­dia said the ef­forts of the in­dus­try and the gov­ern­ment to in­crease con­sumer aware­ness on food adul­ter­ation and safety have helped spur sales. “Con­sumers be­lieve it is con­ve­nient to buy pack­aged oil. The cost dif­fer­ence be­tween the two is also not much,” said Chaudhry, who be­lieves that sales growth would get more com­pa­nies to for­tify oil with vi­ta­mins.

Ex­perts, how­ever, at­tribute higher sales in part to a wider cat­e­gory: Dairy is con­sumed largely by end-users, but cook­ing oils have con­sumers within the pro­cessed food in­dus­try. “The growth in ed­i­ble oils is driven more by out of home con­sump­tion by fast grow­ing snack­ing com­pa­nies and quick ser­vice restau­rants. Also, oil comes with a higher price tag com­pared to dairy prod­ucts on a sim­i­lar pack size,” said Devendra Chawla, group pres­i­dent at Fu­ture Group, adding that dairy will be the next big bet within foods as the econ­omy ma­tures.

Chang­ing life­styles are lead­ing to strong growth in areas such as savoury snacks, and man­u­fac­tur­ers re­main sen­si­tive to the pe­culi- Ben­galuru: Liquor gi­ant Di­a­geo’s busi­ness ser­vices cen­tre in In­dia could be­come one of its largest tech­nol­ogy and an­a­lyt­ics units by 2020, its chief ex­ec­u­tive, Ivan Menezes, has said.

Di­a­geo launched its first busi­ness ser­vices cen­tre in In­dia in Ben­galuru on Tues­day. The world’s largest spir­its maker op­er­ates sim­i­lar cen­tres in Manila, Nairobi, Bu­dapest and Bo­gota.

“In the next three years, it is likely to be­come one of Di­a­geo's big­gest busi­ness cen­tres sup­port­ing Di­a­geo's cus­tomers, sup­pli­ers and em­ploy­ees, pro­vid­ing servi- ar­i­ties of the In­dian palate.

By con­trast, dairy has not inn ov a t e d much and the in­dus­try is largely con­trolled by state-led co-op­er­a­tive pro­duc­ers that are be­set with chal­lenges of prompt lo­gis­tics and pre­serv­ing prod­ucts that have short shelf lives. Amul and Mother Dairy, the state co-op­er­a­tives that lead the dairy busi­ness, re­mained the two largest food com­pa­nies and ac­counts for about 10% of the en­tire pack­aged food mar­ket.

Dairy was the slow­est-ex­pand­ing cat­e­gory with 4% vol­ume growth last cal­en­dar year due to its rel­a­tive ma­tu­rity in the food sec­tor. In­dia is the ninth-largest mar­ket for dairy prod­ucts and the largest for milk, glob­ally.

“Dairy is still driven largely by loose or un­branded prod­ucts even at ur­ban cen­tres. Hence, as a prod­uct cat­e­gory, it is way big­ger than ed­i­ble oil that is hardly be­ing sold loose now,” said RS Sodhi, manag­ing direc­tor at Gu­jarat Co- o p e r at ive Mil k Mar­keti ng Fed­er­a­tion that sells Amul. ces to 70 global mar­kets for Di­a­geo,” said Menezes, who was in the coun­try to launch the cen­tre.

In­dia is the sec­ond largest mar­ket for Di­a­geo, the pro­ducer of John­nie Walker whisky and Smirnoff vodka. About three years ago, it had ac­quired a con­trol­ling stake in United Spir­its, which holds 35% mar­ket share in In­dia with a large port­fo­lio of brands that strad­dle price points in the whisky cat­e­gory.

Di­a­geo said it is look­ing to hire over 1,000 peo­ple for the new cen­tre over the next few years.

USL, Pernod In­dia and Al­lied Blenders & Dis­tillers to­gether ac­count for over 60% of In­dian made for­eign liquor vol­umes. New Delhi: The brave and bold four-let­tered logo, em­bossed on the col­lar­less tee, now needs a new pa­tron in In­dia as FCUK’s ex­ist­ing li­cence holder is look­ing be­yond French Con­nec­tion for fresh ideas in fash­ion. “The Mur­jani Group is try­ing to sell the FCUK busi­ness in In­dia. It will ei­ther sell com­pletely or find a strate­gic in­vest­ment for the busi­ness,” said a per­son di­rectly in­volved in the pro­posed di­vest­ment. Mur­jani Group is the owner of Brand Mar­ket­ing In­dia (BMI), the hold­ing com­pany in the coun­try for Lon­don’s French Con­nec­tions that owns the FCUK brand. The group, which was known for its re­tail pres­ence and launch­ing sev­eral in­ter­na­tional brands in In­dia, ear­lier sold off Tommy Hil­figer and Calvin Klein busi­ness also. An email sent to BMI and French Con­nec­tion re­mained unan­swered. Ini­tially start­ing out as a women’s brand, FCUK be­gan in the United King­dom 1972 and added menswear to its range of of­fer­ings within the first five years. It be­gan us­ing the bold, four-let­tered logo in advertising in the 1990s, mak­ing the brand stand out in a fast-fash­ion

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