Dabur India has prepared a blueprint for a high-octane visibility of its brands in modern trade channels. The herbal company, which has penetrated rural markets with a population as small as 5,000, is now bullish on the fast growing modern retail environment as a growth driver.
The company believes that it has now a wide range of products (particularly after Balsara's acquisition) which are amenable to the modern trade format and that would drive volume growth to offset depleting margins.
On the FMCG side, Dabur India has created a dedicated sales organisation for the modern trade format headed by a national modern trade manager. The division has a completely separate set of stockists- eight of them - across the country. “Currently, modern trade contributes about 3% to our sales, and we aim to take it up to 5% by next year,” S Raghunandan, VP (Sales), Dabur India told ET. Currently Dabur India is active with modern trade in the top eight metros, but hopes to do so in 20 towns in a year from now.
“We also plan to leverage our premium products and add more range to them to service modern retail,” Mr Raghunandan added. “This year we are adding even the single stores in open formats to our modern trade division.” Dabur Foods, on the other hand, has roped in marketing services firm, Solutions Integrated to roll out not just a modern retail initiative, but also 'an overall impactful ground presence'.
The company has begun with an elaborate retail audit being executed by Solutions to take stock of its ground presence in food malls and mega stores. This would be followed up with widescale merchandising and in-shop initiatives to beef up the presence in these locations. At a more basic level, Dabur Foods is planning to push mobile carts into service for its flagship juice brand, Real, to scour the streets to get an anywhere and everywhere reach.
“We were earlier present in large supermarkets or not present at all,” says Sanjay Sharma, GM-sales & marketing, Dabur Foods. “We now seek brand presence through ground events and reach even those places which don't have retail infrastructure.” Carts would help in retail activities at public places, parks and other new hang out joints.
In fact most big FMCG companies have lately demonstrated a keen focus on modern retail formats and are taking initiatives to beef up their presence in stores such as Big Bazaar, Subhiksha and Spencers', which already account for around a tenth of all FMCG sales in metros.
While FMCG big-daddy HLL plans to bring its parent Unilever's best practices in this arena, Nestle India sees modern trade as a great opportunity for itself given its urban consumer product skew. Apparently, both, HLL and Nestle, have dedicated teams to cater to modern trade headed by a national executive.