When everybody in the industry was de-growing during demonetisation, we were growing: Neelima Burra, CMO, Cargill Foods India
After a stagnant growth over the last few years, Cargill Foods India has taken a leap of faith by bringing about various changes within the organisation and also to the brands that the banner holds. We had a conversation with Neelima Burra, CMO, Cargill Foods India...
After a stagnant growth over the last few years, Cargill Foods India has taken a leap of faith by bringing about various changes within the organisation and also to the brands that the banner holds. After a detailed analysis and research, Cargill Foods India has brought about a change in their pattern of growth and claim to have been growing twice as fast now. With focus on the future, creating back up plans for sudden policy changes by the government and spending big money on marketing, the company looks forward to a positive growth in the future.
In conversation with exchange4media, Neelima Burra, CMO, Cargill Foods India, shared her insights on the dynamic FMCG sector, how GST has affected the market and other important factors. Excerpts:
What’s happening at Cargill on an overall basis?
A number of things are happening at Cargill Foods, we have completed the first year of our strategy and the brands have grown phenomenally. Our market shares have grown too. Some of the brands have seen an active growth as compared to being stale. Brands like Nature Fresh revamped the whole packaging and marketing strategy and expanded by reaching out to various outlets. So we had planned for two times the growth in two years and we have achieved it.
Cargill had seen a recent slump in performances but managed to bounce back convincingly, tell us more about it.
To change something in an organisation that deals with strategic impact, changing the culture or the way we think, and moving from trading to customer centricity is definitely a very challenging task, you will put your strategy of all factors in place but then you cannot forget there is a history to all these brands. Most of these are acquired brands and when you refurbish them an organisation is bound to take an S-curve. This was a planned strategic move and what we did was to remove the distractors and unprofitable areas. We had a sharp focus on growth and everything is a step ahead.
So are you saying you were expecting a slump?
A planner is not a planner if they don’t see the implications of the decisions they are making. As a group and an organisation we made a lot of changes. With the leadership and the new MD they are all visionaries and growth drivers.
Before the change came into effect, was Cargill not faring well enough?
All we have done is accelerated the growth, not that it wasn’t growing. There are two choices every company has, it is either to grow at a very comfortably numb pace or outpace the market industry growth and outpace competition. The strategy which we took helped us outpace the market growth. Of course we didn’t plan demonetisation or GST but on the strategy point of view, we are on track.
What is the kind of change that we have seen over the period with Cargill?
We have clearly seen improvement in all our parameters and the market share has grown, numeric reach that is tracked by Nielsen also has been showing growth and it is almost two times the growth and the team has done a fabulous job with meticulous planning. The customer loyalty scores are good too and healthy. Our brand visibility has gone up, number of boards, number of products and share among handlers have grown. When everybody in the industry was de-growing during demonetisation we were growing. Doing things right is important especially for us at Cargill.
What has changed for Cargill within the organisation in the last one year?
Consumer centricity and insight driven approach rather than sales driven approach- there is a big difference in these two. A company that moves from commodity training and commodity branding to a consumer sensitive approach and insight driven brand growth, these are complete behaviour and culture change of an organisation. That means somewhere in the boardrooms, conversation and employee engagement is changing. We never talked about brand loyalty and brand evaluation, we are talking about brand equity and that is a big change. No longer does this have a sales driven approach, around 5 years ago 60 to 70 percent of the spend used to be BTL with hardly any spend on innovation and research. Last three years the percentage of spends parameter has also changed, it’s a mix of BTL and ATL. You will now see that the company is ready to leap into product launches.
What are you looking at in the next three years for Cargill?
Clear focus will be on new product development and innovations which has been our area where we have been slow, and that will increase our revenue and growth while enabling us to acquire new consumers. We also plan to go big in digital and e-commerce along with the health and wellness space.
Does Cargill ever think of getting a brand ambassador on board?
Ambassadors help if I’m struggling to tell a story to people. Fortunately all the brands in my portfolio have their very own sharp communication and value proposition, we may need some endorsers once in a while, as for will it be on the pack or on TV- I don’t see the use of it now. If someone tells me that a certain brand ambassador will enhance my storytelling or add value, I will definitely look at it. The new campaigns will speak a story eventually during the festive season. Our agency has also done a very good job and given phenomenal ideas.
How has the government over the last three years supported the industry?
There are many things that are good for the industry. Demonetisation which enables to organise certain behaviours in the industry, GST bringing in a modern way of retail business or synergising the tax structures of the industry, and these are good behaviours which I will always support. There may be 80 per cent decisions which are good and some are experimental but that’s ok because you can’t get it 100 per cent right all the time. As long as the intent is right, for example atta has 5 per cent tax and penetration of it as a category is only 4 per cent, 96 percent is loose selling and there is no taxation on that so are you indicating that people should prefer loose goods or go for packed hygienic food- so these are the kinds of misses but there are constant meetings and I see a lot of openness to give advice and see a lot of receptivity from the government or even the FSSAI to bring in better reforms and guidelines, which were missing in the industry.
How has GST affected the growth of Cargill and the FMCG sector at large?
According to the latest finding by Nielsen on the FMCG sector and the effects of GST they say that there is a slowdown and the industry growth is close to 4 or 5 per cent unlike 10 to 12 per cent. So is this a negative impact? I’d say no because GST required preparedness from the retailers and definitely people will stock down for some time. As an organisation we are prepared for it and we have done everything that is required and the trade community is also gearing up. The government is doing everything to help the various sectors, be it in any way. So even they are making an effort to help. I have never seen such cohesive environment.
Do you think GST would now mean that Cargill takes a little longer to reach its goals?
Every organisation plans for distractors while planning for growth. So we have a plan B in place.
What are the marketing spends for Cargill?
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Over the last three years we have tripled our marketing spends courtesy the brand revivals and the portfolios or campaigns. The more micro we go the more expensive it gets, however, the quality improves. We spend over Rs 150 crore over ATL, BTL all together including schemes, multiple primary, tertiary, secondary led programmes, all inclusive. We don’t claim ourselves as national player and we are honest with the clusters we work in.
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