Home-grown Amul, Mother Dairy, Britannia giving MNCs like Nestle, Mondelez & PepsiCo a run for their money

Source : Economictimes.indiatimes

Homegrown firms such as Amul, Mother Dairy, Britannia [BSE 1.85 %], Ruchi Soya [BSE -0.83%] and Parle Products dominated the country’s packaged foods sector in 2015 even as Swiss giant Nestle [BSE 4.48 %] slipped five places to seventh in overall ranking, says a new report.

The data from market researcher Euromonitor shows only three multinationals — Mondelez, Nestle and PepsiCo — figured in the top 10 players by market share across packaged foods as domestic firms increased distribution, penetrated into rural India and launched smaller packs at lower price points.

According to Euro monitor, the Indian packaged foods market stood at Rs 2,572 billion last calendar, up about 15% from Rs 2,232 billion in 2014.

“Domestic manufacturers dominated packaged food in 2015, whereas international players still have to understand the dynamics of the Indian consumer mindset. Domestic manufacturers are also increasing their product portfolios,” said Euro-monitor International research analyst Manjunath Reddy.

The shares, by retail sales value, captures data which include sale of fresh, packaged and prepared foods for home preparation and consumption.

Amul continued to top the packaged foods market with 7.2% retail value share last calendar, while Nestle, which was the second largest player in 2014, saw its share drop almost a third to 2.9% in 2015 from 4.2% in the previous year due to the impact of a ban on its flagship brand Maggi that kept the popular instant noodle brand out of shop shelves for five months.

This helped dairy brand, dairy products and fruits and vegetables firm Mother Dairy to grab the second spot behind Amul.

Last fortnight, Gujarat Cooperative Milk Marketing Federation (GCMMF), seller of Amul cheese, milk, ice-cream and butter, reported a turnover of Rs 23,000 crore for 2015-16, an increase of 11% over the previous year.

“We’ve followed an umbrella branding strategy, better prices, natural ingredients, and don’t spend much on marketing, celebrity associations, trade discounting, and so on. We don’t waste assets on building and maintaining too many brands,” GCMMF managing director RS Sodhi said.

While each of the top five brands on the Euro monitor list were homegrown, only three of the top 10 were global foods brands.

“Responsiveness to changing consumer mindsets and focus on local tastes and flavours is what is helping us drive top lines,” said Mother Dairy Fruit & Vegetable managing director S Nagarajan.

Mother Dairy has now taken its localisation focus deeper with the launch of regional flavour ‘nolen gur’ (palm jaggery) flavored ice-cream in Kolkata. Nolen gur flavoured ice-creams so far have been restricted to unbranded players.

Like Amul, Mother Dairy, too, has steered clear of expensive celebrity endorsements.

Nestle’s Maggi, which returned to market in November last year after a gap of five months due to a ban by food regulator Food Safety & Standards Authority of India (FSSAI), returned to leadership position last month with close to 50% share in the .`2,000 crore instant noodles category. Maggi’s market share, however, is significantly lower than what it was before the controversy.