'Fun' Brands Like Bingo, Mint-O, Yippee, Candyman, Sunfeast
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Chitranjan Dar Divisional Chief Executive. ITC Foods How has ITC Foods in a decade become a ? 3,000 crore unit and has created 'fun' brands like Bingo, Mint-O, Yippee, Candyman, Sunfeast.. Men's grooming Movement marketing Interview: Bernd Schmitt How is the men's kit evolving How brands like Hero, Tata Steel The experiential marketing a beyond the boring shaving and Mahindra are capitalising guru talks about Indian brush/cream and a razor on movement marketing brands'chances globally COVER STORY ITC FOODS A DECADE OF ITC Foods, since its inception 10 years ago, lias become a ^ 3,000 crvre unit. How it used its distribution strength and ideas from, Welcome Ghvup to overcome Hie numerous cJiaUenges By Dhaleta Surender Kumar & Neha Goel en years ago, when ITC forayed into in the food sector, even before the launch market in 2002, with wheat flour too isn't the foods business, for a company of Kitchens of India in 2001, with its sun a 'for the heck of it' product. Twell known for tobacco and hos flower oil Sundrop. The company sold the pitality, foods as a business proposition. brand and its distribution to ConAgra's Riding on distribution seemed an unnatural fit. While regulations subsidiary Agro Tech Foods in 1996. So re While a pillar of any business its product, certainly have put a tab on how one can tailing and marketing foods wasn't much ITC's strength was its distribution and pro promote tobacco products, today, ITC is of a challenge. The talent mostly was curement capability. better known for its food brands - Kitch home-grown. The challenge of course Chitranjan Dar, Divisional Chief Execu ens of India, Sunfeast, Aashirvaad, Bingo, was manufacturing, technology and prod tive, ITC Foods, says, "ITC has e-Choupal, Yippee, Mint-O and Candyman, which to uct development. In spite of the challeng which are something like interactive busi day make ITC Foods an over X 3,000 crore es, the division was a result from synergies ness villages; and with e-Choupal we division. The decade, while has been chal drawn from within the organisation. The have a great ability to surf very differen lenging, it's been fun too - leveraging its baby step was the ready-to-eat Kitchens tiated products with differentiated quality traditional distribution strength and some of India range, which drew inspiration rather than just mandi products." little help from whacky branding. from ITC's restaurants - Dal Bukhara and The thought of Aashirvaad germinated Few know that ITC had been for long Dum Pukht. And entering the commodity from this surfing expertise of ITC, which A FUN FILLED DECADE 2001 ■fj Launches cooking Launches ready-to- Acquires Mint-0 (com Launches Candyman pastes - chicken curry, eat range, Kitchens of pressed mint tablets) Extends Aashirvaad butter chicken curry, India, with the launch from Candico to salt mutton curry, fish of'Dal Bukhara' Enters the staples mar curry and vegetable ket with wheat flour. Enters biscuits biryani under the Aashirvaad market with Sunfeast, brand with three varieties Extends Mint-Oto ^SS*** of biscuits - glucose, Mint-0 Fresh, a hard marie (Orang Marie), boiled candy and cream (Butter scotch Cream) 20 Pitch I September 2011 FUN was utilised to procure and create an ex tremely standardised and branded prod uct. "We said - let's experiment whether we can give something differentiated to our consumer. Theoretically, if you add wheat with this much hard work, with this much hectoliter density, which if you mix it up consistently, it should bring you bet ter quality wheat, which will not only be determined by taste but also when you're making it. So that was how the genesis of "With e-Choupal, we have a great ability to surf products and procure them to create branded products" Chitranjan Dar Divisional Chief Executive, ITC Foods i Forays into the snacks Launches Kitchens Launches Aashirvaad ■ Ropes in Shah Rukh of India Masala Mixes instant mixes - Rice category with launch Khan as brand ambassa - Paneer Makhani, Idli, Rava Idli, Rice of Bingo in both potato dor for Sunfeast Vegetable Biryani Mix, Dosa, Gulab Jamun chips (Masala, Salted and Tomato) and finger Chicken Curry Mix, But ■ Launches Sunfeast and Khaman Dhokla snacks segment (Live ter Chicken Mix, Hyder- Pasta Treat to create the Signs a co-creation Wires. Mad Angles and abadi Biryani Mix and instant pasta category deal with Sachin Tedhe Medhe) Mutton Kolhapuri Mix Tendulkarto launch ■ Forays into cookies seg 'Launches organic spices Forays into the instant "Sunfeast Sachin's ment in the biscuits mar (chilli, turmeric and co noodles market Fit Kit" range of high ket with the launch of riander powders) under with Sunfeast quality health range of Sunfeast Golden Bakes the Aashirvaad Select Yippee food products and Sunfeast Snacky Organic Spices range Pitch I September 2011 COVER STORY ITC FOODS Aashirvaad started and the success of the brand is actually due to the ability of our BISCUITS sourcing team," says Dar. Today, Aashirvaad is a X 1,000 crore About 30 per brand with products ranging from flour, Category size: cent of Sunfeast spices and instant mixes. A major share of ? 11,000 crore biscuits are in course comes from the flour business. the glucose seg ment. The challenge to Sunfeast In 2002 itself, the company entered the Sunfeast confectionery market too, with the acqui comes from Parle, the market sition of Mint-O (a compressed mint tablet) ? 1,300 crore leader, which controls the prices from Candico. ITC Foods however, impro and the wholesale market vised the product to make it a candy tar geted at the youth. For the kids, it launched Candyman in 2003. So what exactly was O is targeted at the youth, Candyman is the need for ITC to get into a market, which largely kids. The whole thing is giving us works on low margins and sells at about 50 a different experience and the challenge is paise per unit? The fact was equally true for how we can innovate around. In the next the parent company's tobacco business. couple of years, you could see a lot of ITC's traditional distribution strengths have innovations," he says. been convenience outlets that sell, among He feels that both segmentation and other things, tobacco products. This gave innovation are an important factor for ITC a great leverage in terms of its distri any marketer to succeed. "The consumer bution strength. Since confectionery is an "We are ambitious today is becoming more and more seg impulse purchase category, largely sold mented and anybody who can exploit out of convenience outlets, ITC drew syn definitely. But, we are that segmentation will be the winner. Sec ergy for its confectionery business from its not looking at the Nol ondly, the aspirations and the wallet of the distribution strength. position as a goal" Indian consumer today is able to afford a Today, Mint-O (with its extensions - degree of premiumisation. If you are still Mint-O Fresh and Mint-O Gol) and Candy- VLRajesh approaching the Indian consumer saying man are valued at around ? 350 crore in Head. Marketing, ITC Foods that he will be a glucose biscuit eater, you the ? 8,000 crore confectionery category are doomed. He is expecting you to inno (which includes sugar based confection sence really wouldn't be for long as ITC has vate, and he is expecting you to premiu- ery, chocolates and gum as well), and is plans to foray into the market by the end of mise, and at a fairly rapid rate." competing with the likes of Perfetti, Godrej this year and is busy developing the gum He feels that there is a huge expectation Hershey, Wrigley, Nestle and Cadbury base indigenously An import of the gum from the company that it will be able to do among others. While Perfetti is the leader base could shoot up production costs and new things every time and bring in differ in the sugar based confectionery market affect margins. ent products, catering to different classes, with around 25 per cent share, ITC comes at different price points. close behind with about 10 per cent share. A well segmented audience The next big step was in 2003, when ITC So what prevents it from becoming the No Meanwhile, Dar is quite upbeat about the Foods entered the biscuits market with 1 in the category? The absence from the confectionery business. "We have very Sunfeast, with three varieties - glucose, chewing gum segment, says Dar. The ab- well segmented the market. While Mint- marie (Orang Marie), and cream (Butter scotch Cream). Procuring flour wasn't dif ficult and the rest was left to innovation, j CONFECTIONERY which the company feels was brought in by giving a new orange flavour to the clas Category size: sic marie biscuits. The butterscotch cream ? 8,000 crore Most of the ITC products in the con was a first in India. And so were chilli flakes fectionery category are me-too prod and honey being added to biscuits. Today, ucts. The tough challenge comes the company has about 12 per cent share Mint-O & Candyman in the ? 11,000 crore biscuits category. from Perfetti, the leader. More so, ITC ? 350 crore doesn't has a gum yet in its portfolio The next big move and innovation came in 2007 when the company forayed into - 24 Pitch I September 2011 the snacks category with Bingo potato ing in all directions. I think it was a great chips and finger snacks. Not wanting to di initiator," Dar adds. rectly play on competitor's turf, innovation And Welcome Group had a lesson to required new flavours and results were give to ITC Foods to take direct feedback products like pakora inspired Live Wires, from the consumers.