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Dabur lines up new products to spur growth

05-June-2004
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Dabur lines up new products to spur growth

Dabur Foods has identified several new product areas it will enter to meet the Rs 200-crore turnover target it has set for itself by 2006-07.

The company has decided to enter businesses of soups and tomato puree under the Hommade brand and fruit drinks under Coolers.

"We have decided to expand our product portfolio under Hommade. After successful test marketing, we have decided to launch Hommade tomato soup in liquid form (in cartons) by September this year. Also, Hommade will be extended to tomato puree and coconut milk," the Dabur Foods CEO, Mr Amit Burman, told Business Line. While admitting that the cooking pastes category is not registering robust growth rates, Mr Burman said Hommade nevertheless grew by 28 per cent last year. "Yes, since the base is small, 28 per cent growth is not very substantial which is why we have decided to extend the brand into new products such as soups and purees," he said.

Dabur Foods has also been test marketing chutnies like imli saunth but has decided against launching these since the market response has not been encouraging. However, it is going ahead with plans to launch tomato puree under Hommade.

On its Real brand of fruit juices, Mr Burman said that it contributed as much as 85 per cent to the company's Rs 86 crore turnover last fiscal and will continue to be an area of focus.

Its new brand, Coolers, has been priced about 15 per cent lower than Real. Besides, the drinks under Coolers contain only 20 per cent of fruit pulp against over 80 per cent in Real variants.

Mr Burman said while the packaging for beverages is done in Nepal, the pulp will soon be sourced from the company's Siliguri plant, which is expected to be commissioned by August this year. The Siliguri pulp plant, a wholly-owned subsidiary of Dabur Foods, will witness Rs 20 crore investment this year which he said would be part financed through long-term debt and equity.

On the other brands of the company, Lemoneez lemon juice concentrate and Capsico sauce, Mr Burman said he was not investing in these brands any longer since the market for them was very small. "But this is not to say they do not make money; each is a Rs 1 crore brand and we have no plans to sell these off in the near future."

He said after the tomato soup goes national, the company will launch two more variants. Asked whether Dabur Foods was geared to compete with established soup brands - Knorr from Hindustan Lever and Maggi from Nestle - Mr Burman said, "Our distribution network is parallel to that of HLL. Besides, what we are offering is a new concept of liquid soup since competitors are offering soup only in powder form."

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