The Economic Times: May, 2014
New Delhi: Food and grocery account for almost 60% of India's retail market, but Food Bazaar chief executive officer Devendra Chawla says there is a lot of potential in the "underbranded" domestic market that the organised players can tap to offer more choice to the consumers.
There is a dearth of private brands in food and home care products except some mature categories such as soap, which has a choice of some 130 brands, Chawla has told ET in an exclusive interview. There is a choice of just two three brands in certain food categories such as noodles, breakfast cereals, jams, ketchups and sauces, for example.
Similarly, consumers do not have much choice in home care products such as toilet cleaners and floor cleaners. Private brands of Food Consumer Enterprises (FCEL) such as 'Cleanmate' toilet cleaner, 'Caremate' aluminium foils and 'Tasty Treat' beverages have already paid off handsomely to the company. While Caremate leads the category with over 40% share, Cleanmate is the No. 2 brand in its category.
Besides, FCEL also has branded commodities such as ghee, which is the largest selling in cow ghee category. Chawla further explained the rationale of investing in private brands. "Regional tastes is another area where we have taken a serious move to invest consciously. Each consumer segment is proud to be related to its own community food and national brands don't have a major role in community tastes," he said. FCEL's brand 'Ektaa' caters to the needs of the regional demands of each state or region.
'Ektaa Kasundi', a mustard-based sauce from eastern India, already has a 5% share in sales of sauces sales and is clocking a growth every year. Similarly, jaggery from Kolhapur is the preferred brand in Maharashtra. Food Bazaar tests each of its new products through its stores before sporadic launch in other cities through distribution formats.
WHAT'S COOKING AT FOOD BAZAAR?
FCEL aims to make Tasty Treat a national player in the near future. It has launched a range of salted biscuits under 'Tasty Treat-TIK TOK' in an attempt at multifold growth. It has partnered with Disney to add fun element for children with relevant alphabetic and numeric sweet crackers.
"We have been playing a critical role in growing category consumption in wafer biscuits where FCEL brand Tasty Treat is growing at a CAGR of 20% and is the second largest brand at our stores with a share of 30%," said Chawla, elaborating on the company's focus on its private brands.
Beverages is another category that FCEL is targeting through its brand Tasty Treat and plans to add many more variants over the next few months. It also sells hot and cold beverages and mango and other fruit beverages, Sach fruit beverage in tetrapacks and Fresh & Pure tea.