Our ambition is to feed 140 crore Indians: Asheesh Sharma, Agro Tech Foods

Sharma, VP Marketing, Agro Tech Foods Ltd shares insights on entering into new categories, product differentiation, growth observed, marketing strategy, and more

e4m by Ritika Raj
Updated: Oct 18, 2021 9:17 AM
Asheesh Sharma

Sundrop Oil and Act II popcorn are brands that have become a household name for the Indian consumer now. The parent company Agro Tech foods Ltd. has been a market leader in these two categories and is now also expanding the business into more categories like ready-to-eat, spreads and chocolate confectionery. The packaged food sector has witnessed some significant highs and lows all through the pandemic and it will be interesting to see where the sector is poised to go in the wake of consumer buying behaviour also changing. According to Asheesh Sharma, VP Marketing, Agro Tech Foods Ltd., the company competes in six different categories through its different brands and products and the growth has been different for each category. He shares “We compete in ready to cook, ready to eat, chocolate confectionery, spreads, edible oils and cereal snacks. Different categories have performed differently. Ready-to-cook has had an extremely good growth of 36% in Q1.”

Further sharing the growth trajectories in other categories, he adds “We continue to see good momentum in RTC because of consumers spending lot more hours at home and that has worked in our favour. There is about close to 3% or pricing led growth. However, the growth was a little sluggish in the Ready to eat category because of the lockdown imposed in Q1. The breakfast cereal and chocolate confectionery that we have seeded in, are doing pretty well. Since we are at a very nascent stage on that, it is giving us rapid strides in growth and we are building these two. Edible oil has had a mixed response. There was a good demand because again people were more at home. However, the dampener was the huge cost led inflation which was a little bit of a downer because of uncertainty in the pricing. When crude oil prices are higher, for a company like ours freight is an important component, so there is a general inflationary push on the pricing side.”

Building A Diverse Product Portfolio

The company has recently entered competitive categories like chocolates and spreads. Sharing insights on product differentiation, Sharma adds “We have not entered the chocolate confectionery like a me-too product. The way we have been marketing, integrating or building our product portfolio, we do it with our expertise in creating new categories. Popcorn was a category that we created. Whenever we get into any category one of the things that we do is, both from product consumer insight and product-price architecture point of view we ensure that we will be creating a new category. Our products are very clearly differentiated from the ones which are part of the large crowded category. For example, one of our chocolates has a coconut filling inside a chocolate coating, which is our way to make our chocolate nutritious.” Explaining the pricing challenges in a competitive category, he adds “ The challenge in most of these items is to create 5 and 10 rupee products because our ambition is to feed the 140 Crore Indians and not just the rich and the affluent. In most cases, making a product is one part of the story, making a small bite-size or the portion control size pack, and also being able to sell and distribute that profitably is the question. According to insights, everybody who consumes chocolate always looks for portion control and looks for more nutrition and affordability. We have taken care of all these three in all the new chocolates that we would be developing in our confectionery business.”

While innovation and new products are the key drivers of any flourishing business, Sharma has a slightly different perspective. He adds “Innovations, unless they're developed into prototypes and tested with a consumer and are accepted,  nobody knows at what point in time they may fail. We may do R&D, work and develop a good recipe, but find out that the consumer is not liking it. Therefore, especially in the food segment, only once the product is out, we know for sure. Therefore, last year we added spreads as a category. This year we have added confectionaries and cereal snacks as a category so we are innovating in all of them.”

Marketing Road Map for Agro Tech Foods

Talking about the marketing side of things and how the company and brands’ communication evolved over the duration of the pandemic, Sharma says “We have in the past stuck with a brand-specific communication. Our products or any communication that we build is not related to any incidents or any point in time. We are actively advertising Sundrop peanut butter and Act II popcorn because the other two categories are still building on the communication concepts. Popcorn and movies are inseparable, so we built on the buttery aroma that one gets to smell in the theatres and ran the campaign for Act II urging people to ‘make your own cinema hall’. With the focus on healthy eating increasing, we brought that insight into marketing peanut butter. We have carried forward the emotional equity of family bonding, but changed the functional unit, equity from health to routine which is a functionality of peanut butter.”

Agro Tech Foods Ltd. is pretty conservative in its approach to adopt a media mix and as a result of that, not much has changed post the pandemic. Says Sharma “On the media mix side, we spend a large part of money only on television. In the food business, we think that an advertising and promotions budget of about seven to eight per cent of sales revenue is good. We probably are currently at about five and a half to six per cent, so we still have to catch up but that's what we have been at for about the last three years or so. We are a little underspent on it but we are doing it because we are slowly and steadily building our food business and we are inching towards it. So about 95% of the A&P budget is on television. The rest we spend on digital, Hotstar, Instagram and in-store promotions. It's a combination because those are all evolving mediums, and we need to know how to win in each one.”

The festive season is in full swing and it is usually a time where brands go all with their marketing plans in place. Sharing festive plans, Sharma adds, “There is a  thing which we do which is that we advertise when we think the consumer is receptive. Festive Season not necessarily means that people are going to consume more popcorn or peanut butter at home. Also, the festive season is mostly predominated by white goods advertising because that's the things that people want to spend on and we actually go off the air at that time. We come back in our season and the time that stands important for us, usually the winter when people consume more popcorn because it's a hot and fresh snack. Secondly, since we communicate a lot with children, we normally don't prefer to advertise in the months of March and April which is traditionally exam time.”

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