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Aiming for a bigger bite

Aiming for a bigger bite

Author | exchange4media News Service | Saturday, Jun 05,2004 9:25 AM

Aiming for a bigger bite

After the West’s infatuation with Indian yoga, ghagra-choli and Punjabi beats, its time now for its focus on Indian food. Home-grown Indian food companies today are eyeing a bigger slice of the growing international food market. If their early presence was largely through exports, Indian companies are now taking steps to establish a more definitive imprint. Is India set to be the new international ’flavour’?

Consider: A plethora of home-grown food companies like Amul, ITC, Satnam Overseas Ltd (SOL), MTR Foods and Rasna are set to deepen their roots in global food market.

SOL’s stalwart brand ‘Kohinoor’ and market leader in Basmati rice, finds presence in more than 50 countries. They introduced ‘Heat & Eat’- a range of Ready-to-eat (RTE) authentic Indian curries, rice pulav, namkeens, paranthas etc targetted at the overseas market. Amul, the flagship brand of Gujarat Cooperative Milk Marketing Federation, is India’s largest exporter of dairy products which includes butter, sreekhand, ghee and gulabjamun.

ITC, besides its RTE curries under the brand ‘Kitchens Of India’, has broadened its base with brand launches in confectioneries and snacks.

The Rs 130 crore Mavalli Tiffin Room (MTR Foods) has come a long way since 1924, with exports accounting for roughly 8 per cent of sales. Aiming to provide natural, wholesome and delicious food that is convenient, they have ‘complete meal solution’ with RTE curries, rice, gravies, soups, frozen foods, instant snacks, dessert mixes and a variety of papads and salads.

Long back when ‘Bikanervala’- a local halwai started off it didn’t know it would go onto establish a manufacturing base overseas. Their products have taken them far beyond the geographical limits of India to USA, Europe, Canada, Australia, Malayasia and the Gulf.

Rasna, in India, holds close to 90 per cent market share in the soft drink concentrate market and about 75 per cent of the in-house consumption of soft drinks market. Little wonder then that it is a force to reckon with, in any soft-drink category. Besides exporting its snack brand ‘bollywood bites’(exclusive to the overseas market) and ‘Rasna fruit booster,’ they plan to roll out their mass market product ‘Rasna Cola Cola’- a juice concentrate globally.

Their inspiration behind going global is to bring to the world, ethnic Indian recipes and food products. Says Rakesh Roshan, AGM, SOL: “We have always focussed on exports which form 50 per cent of our turnover. The Indian food market has a vast opportunity and food would be amongst the key drivers of the economy in the next 20 years. Hence, why not explore the global markets.”

Mr Rajiv Shankara, GM (sales and marketing), Bikanervala believes that the foreigners had a liking for its products and would take back home huge amounts of namkeens and snacks. Also, going global gives them a better acceptance at home.

Mr RS Sodhi, GM (Marketing), Amul adds that India being the largest milk producer and Amul, the largest milk company had to make a foray into the global markets. The exotica attached to anything Indian has created a market for these emerging globally-focused Indian food companies.

Over the years, there has been a paradigm shift in the sales and marketing strategies of these companies. For instance SOL has established a fully owned subsidiary in US serving the whole of the America and two joint ventures (JVs) in UK and Dubai, meeting the needs of the European and Middle East markets. Mr Shankara of Bikanervala said that they are likely to come up with their own distribution network once they break even. They also plan to set up manufacturing units for traditional Indian sweets in Canada (a JV with a Toronto based NRI and an investment of about Rs 2.2 crore) and Dubai.

However, both MTR and Amul are not planning any JVs and manufacturing abroad in the near future.J Suresh, CEO, MTR Foods adds: “The long shelf life of our products do not make it essential for us to enter into joint ventures right now.”

The hot stopovers for these companies are UK, US, Middle East and South East nations where in they target the burgeoning NRI population.They are now planning to tap the potential of Japanese and South-African markets with sparse NRI population.

Companies like SOL have retails in Harrods (UK), Costco (US) and Safeway (UK and US), ITC in Selfridges (UK) and MTR in Sainsbury’s (UK).

However, there are risks. Mr Sodhi, for instance, says that Europe remains a tough market because rigorous licensing requirements and country-wise quotas. The possibility of rise in subsidy given by the US and European countries, giving indigenous producers a cost advantage may prove difficult for Indian companies. Another inevitable risk, as pointed out by Mr Suresh of MTR, is that of habit change leading to product obsolescence. Changing tastes of the consumer this is something that they have to live with.

Nevertheless, all of them seem bullish that their competitive strengths and USP in these markets will raise their brand equity, quality, variety and ability to provide ‘home-feel food’. Ultimately, it’s the “Taste Of India” that has made its entry into the hearts and kitchens of the Indian food lovers.

Tags: e4m

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