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Monday, 11 August 2014

India grocery sector "underbranded"

Warc, 28 May 2014
NEW DELHI: Indian consumers have limited product choice across large swathes of the food and home care sectors, according to a leading industry figure who sees a lot of potential in these "underbranded" areas.

Devendra Chawla, CEO at Food Bazaar, part of the Future Group retail empire, told the Times of India that there was scope for retailers to offer more private brands in many categories. For example, there were only two or three brands in noodles, breakfast cereals, jams, ketchups and sauces.

Similarly, there was little choice in toilet cleaners and floor cleaners (although a mature category such as soap faced the opposite situation, with around 130 brands available). Future Group has successfully tapped into this gap by developing brands such as Clean Mate toilet cleaner, now the number two brand in its category.

Branding opportunities also extended to taking account of regional tastes. "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," said Chawla. Which is one of the reasons the Future Group created the Ektaa brand – in order to recognise the country's diverse culinary traditions.

Another factor playing into this was recently outlined by his colleague Sandip Tarkas, president of customer strategy at Future Group, who said explained that Indian consumers were more open to trying out new brands and that smaller and regional brands had benefited as a result.

The private brand strategy has paid off for Future Group. "In FMCG our private brands have 15%-20% market share and in home and cleaning our private brands have 30%-35% market share," said Chawla. "It is a sizeable business for us."

As well as encouraging the development of private brands, Chawla has also indicated possible new distribution options.

"Right now our private brands are sold only in Future Group-owned formats but we will look at retailing private brands in future," he said earlier this month.

Data sourced from Economic Times; additional content by Warc staff

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