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)

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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. "I might get on Twit­ khakra inspired Mad Angles and direct ter or use the digital platform to catch hold me-too Tedhe Medhe, which was inspired of the consumer, but a hotelier will seldom from Kurkure of PepsiCo. do that. He is creating a consumer re­ Today, Bingo has over 16 flavours across sponse there and then, and I see chefs in­ its range, and commands about eight per teracting with people. You tell the chef that cent share in the ? 3,500 crore snacks mar­ 'the dish is really good', he won't be happy. ket lead by Lay's and Parle. In spite of being He goes a step ahead to ask what really is a me-too in the category, and with a little good in this and how he can improve it. I bit of help from innovation, largely, Bingo see this day in and day out and have learnt was helped by ITC's distribution strength a lot from chefs at Welcome Group to get to gain market share. "We had a trust, we a valid feedback. These things are intuitive had a relation with the distributors that and you don't need Facebook and Twitter the company would not run away with for that," says Dar. my money. If that wouldn't have been the ITC Foods has tried to emulate the mod­ case, why would we get into the business? el by asking its distribution team to talk to What is the difference between you and as many people they can. and which ac­ me?" he asks, to answer it himself in the cording to Dar "has become a standard same breath, "You have the same ideas operating procedure". as me, but you don't have a distribution Similarly, Yippee, which is targeted channel." at the kids, rides on insight driven from

ITC Foods simply had to look into the recipes of Welcome group (ITC's hospitality business) for flavours for its snacks and biscuits range

An in-house idea bank the target audience itself. Firstly, the So where does ITC look for ideas for inno­ word - Yippee - is "so often" used by vation. Much of it has come from in-house. the kids. However, while the commu­ Ideas, according to Dar, were never a chal­ nication still has a fun quotient to it, it lenge for the group. The challenges, to talks more about its functional benefits begin with, was the lack of robust product rather than build an emotional connect. development and the right manufacturing These functional benefits too are driven processes "like baking of the biscuits." from consumer insight - that kids find ITC simply had to look into the reci­ fun in eating long noodles. Hence, ITC pes of Welcome Group (ITC's hospitality Foods got rid of a square block, which business) for flavours for its snacks and needs to be broken down to fit in a GREYWORLDWIDE biscuits range or for that matter Aashir- round vessel, and instead came up with Kitchens of India vaad spices, preserves and pastes. "We a round block. Secondly, noodles tend went to them (Welcome Group), asked to cake and get lumpy when they get them how we could bring out differen­ cold; hence, Sunfeast came up with a tiations, and they always would come up product that would remain smooth af­ with 50 ideas." And that certainly was a ter getting cold. Yippee claims to have problem of plenty. "Ideally, it should have snatched the second place - behind been two to three ideas and we would Maggi, which ITC says has 80 per cent Media Agency have worked on them. But there were share - with a 10 per cent market share always 10-15 ideas and we were think­ in the instant noodles market. MADISON

Pitch I September 2011 25 COVER STORY ITC FOODS

has tried to bring in a fun quotient within the products and their communication. BRANDED FLOUR In an impulse category like confec­ Aashirvaad tionery and with a me-too product like Category size: has about AASHIRVAAD Mint-O. which is quite similar to Chlorm- 50 per cent int of Perfetti, ITC has left it to its creative ? 4,500 crore market share in the branded flour team at Draftfcb Ulka to create a distinc­ market. The other players being tion. Indira Das, Creative Director, Draftfcb Aashirvaad (flour) Annapuma (HUL), Pillsbury (General Ulka, Bangalore feels that the products ? 1,000 crore Mills) and Shakti Bhog (Shakti may be me-too but the communication Bhog Foods) isn't - so far! "The creative platform for . Mint-O Fresh has been differentiated right from the beginning. Mint-O Fresh has been and continues to be about the un­ Pricing controlled by leaders keeps the prices at ? 10, we will have to likely hero getting the girl thanks to the While the recipes of Welcome Group, ac­ follow. There is very little you can do when confidence of "Mint-O Fresh breath. Our cording to Dar. "were inspirational", the you're a me-too product." he says. tone and style has a certain small town challenge was to bring down the prices, earthiness that further serves to differenti­ and that's why the company always went From functional to fun ate the brand," she says. back to the chefs to come with differenti­ Barring Aashirvaad and Kitchens of India - The same is true for Bingo, which not ated ideas. And ITC Foods couldn't charge the latter (ready-to-eat) is a small category only has whacky sub-brands like Mad An­ a premium. While snacks is largely an ur­ in India, and is hardly ? 50 crore - ITC Foods gles and Tedhe Medhe but equally mad' ban phenomenon, biscuits are largely communication. Add to that Yippee. consumed in the rural, and much of Sun- Though Dar would like us to believe feast biscuits business comes from rural that most of the names have not been by and from glucose variants. The challenge choice. Dar tells, "It's very difficult to get a came from Parle, the leaders in the space. brand name. Virtually, anything you like Dar elucidates, "Our entire breakfast has already been registered. Usually we cookies, glucose, have very large rural have 100 names and, our research team penetration. Having said that, I would say tells us that we cannot take 96 of them." we were late entrants. Rural penetration is VL Rajesh. Head, Marketing, ITC Foods, not as good as many others. Rural is a lit­ adds, "Our larger brands - Aashirvaad or tle more difficult to penetrate for a simple Sunfeast - are not whacky. We do not get reason that it thrives a lot on the wholesale "Madness is very integral to whacky names by design. We think of channel and wholesale channel rides a lot Bingo's personality. All these names that are relevant for that segment on leaders. So, it takes a while, it takes a and are phonetically easy to pronounce." few years before your wholesale channels messages are wrapped in However. Simmi Sabhaney, President, for rural start accepting challenger brands." the language of madness" Management, Ogilvy b Mather, Bangalore So couldn't ITC Foods leverage its e- (the agency on record for Bingo) tells a dif­ Choupal network in the six states it is pre­ Simmi Sbhaney ferent story. "If you look at snacking, it is sent in? Dar explains, "I am talking about President, Management. Ogilvy & Mather. Bangalore such a mindless activity but yet people try rest of India also. That said, the wholesale channel is a different ball game altogether. They really gear up to support the leader SNACKS For Bingo. ITC because that's the name they hear. They have heard of Parle and believe that the Category size: Foods has taken consumer will buy Parle." ? 3,500 crore inspiration from recipes from the While ITC Foods is working to build its Indian kitchen - like khakra and wholesale channel, it feels that it still can­ pakora. Helped by some whacky Bingo not command prices, an economy Dar names and bringing some 'madness' feels is "dictated" by Parle. "About 30 per ? 250 crore to communication, the brand has cent of Sunfeast is still glucose. And Parle is left an impression in the market the market leader in this segment. If Parle \ngure* based en market estin<

26 Pitch | September 2011 COVER STORY ITC FOODS

to communicate it so seriously. So we tried to create a personality around the brand, NOODLES which is all about being very deliberately mad. It's almost like when you're trying to oods claims plant sense into non-sense." she says. Category size: to have gained 10 Das of Draftfcb, wouldn't want to move ? 1,400 crore per cent market beyond fun. "Why move beyond fun?" she share in the in­ questions, adding. "Both brands have prop­ stant noodles category, beating Sunfeast Yipee ositions that are deep enough to allow sev­ Top Ramen of Nissin Foods to put eral new explorations and expressions." ? 100 crore itself in the No 2 position, behind Like Das, Sabhaney too wouldn't like to Maggi of Nestle deviate from the fun quotient. "Madness - is very integral to Bingo's personality. So, madness would not go. But, yes from time lenges range from product development in. As pointed out earlier, being a No 2 or to time we will like to have new messages know-how to technology, dealing with ag­ No 3 in these categories doesn't help the to communicate. Of late we have been fo­ gressive competitors who control prices company much in commanding a pre­ cusing on new flavours and formats. The and the pushy wholesale channels. There mium in pricing, while it fights out directly category thrives on newness and buzz. have been product failures too - Hatke with players like Perfetti, Parle, Britannia And all these messages are wrapped in the Jhatke under the Bingo brand, and Bischips PepsiCo and Nestle; and add to that other language of madness." she says. - the company's first snack brand that was significant players - Haldiram, MTR, and And working on Bingo at Ogilvy has launched as early as 2002. The latter was Dabur - who too are vying for the share been fun "While we were working on Bin­ withdrawn from the market in 2004. of the market. go, we all were really having fun. There was Dar feels that it was a lesson well learnt. Rajesh doesn't feel that being the No 1 a lot of laughter. Each time you crossed the The company was in a rush to have too player is important yet for the company. room with the creative, the servicing and much in the market too soon. "When you "We are ambitious definitely. The No 1 or the planning guys, you could always hear have too many products in a portfolio, the No 2 or No 3 position will keep happening, laughter and this laughter got transferred ability to distinguish between them be­ but for us what is important is how we get to ITC's conference room as well. And we comes diminished, and the consumer starts there. We are focusing at growing as a sus­ want this laughter to get transferred to seeing less and less difference. A product tainable and profitable franchise. We are consumers as well," adds Sabhaney. must be calibrated in groups," he says. not looking at it as a goal that we'll make Whether one likes the Bingo campaigns Another big concern for ITC Foods is possible at any cost." he says. or not, they manage to get a reaction and that being a me-too player in most of the And there's a fear lurking of a possible in return create a buzz around, and that categories, barring the flour business, it is slowdown ahead. Rajesh wards of any works wonderfully for the product. not a leader in any of the categories it is such pessimism. "We are in the FMCG busi­ ITC Foods, while has leveraged TV and ness and the important thing here is that print well enough, it hasn't jumped the India as an economy is growing at a pretty digital bandwagon as yet. But digital is a decent rate. As far as we are concerned, I platform, which ITC cannot afford to miss think our growth is pretty healthy and the and the brand is aware of it. Rajesh says, packaged foods business is growing pretty "Digital marketing can get word of mouth healthy too. We really have no cause to going on for the brands. It helps build some complain. And I don't see any slowdown level of support for the brand, which I think in this particular industry," he says. is also what a consumer looks out for." So, digital will be used in conjunction The road gets wider ahead with traditional mainstream media. "We So what's more from the group? "More are already on it and we will be working "Mint-0 Fresh has products, line extensions, flavour exten­ towards it. It'll be a part of our overall brand sion, field extensions..." says Dar. adding, strategy and marketing plan," he adds. been and continues to "Our chairman has also talked about some be about the unlikely new categories too, and we have a lot of Bumpy rides hero getting the girl" work to do," he says without getting into While it's been fun so far, it certainly has not the specifics of it. been a smooth ride for ITC Foods. It too has Indira Das So let the fun continue. ■ had its shares of hiccups. To recap, the chal- Creative Director, Draftfcb Ulka, Bangalore -surender@pUchonnet. com

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