Innovation surges in India

02 June 2011

NEW DELHI: Multinational and domestic FMCG companies are pursuing major innovation drives in India, seeking to attract the country's young and increasingly affluent shoppers.

Parle Agro has rolled out a wide variety of products in the recent past, from lemon water Nimbu Paani to Hippo crisps carrying "international flavours" such as Italian Pizza, Chinese Manchurian and Thai Chilli.

"No one in my company ever says let's do this because X company is doing it," Nadia Chauhan-Kurup, Parle Agro's joint managing director, told Business Today.

Perfetti Van Melle, the confectionary giant, has also unveiled Stop Not crisps, entering an area it valued at 6,000 crore rupees ($1.3bn; €928; £816) in India, but does not commonly trade in across other countries.

"We continuously look for new opportunities. Food is a growing category in India and we would like to tap this market to expand our business," Sameer Suneja, Perfetti Van Melle's managing director, India, said.

"The salty snacks space offers us huge opportunities and we are looking to shake up the market with very interesting products."

Dabur, boasting a portfolio spanning food, health and personal care, is targeting the professional beauty sector with its Oxylife skin bleaching line.

Elsewhere, it developed several brand extensions to Chyawanprash, a traditional health tonic, introducing a selection of extra flavours.

The firm estimates launching a product can cost up to 15 crore rupees, when incorporating research trials, promotion and communications, meaning failure is often expensive.

"It was a risk, but it paid off. We were able to bring back young adults who were falling off our consumption charts," Praveen Jaipuriar, Dabur's additional general manager, marketing, said.

Horlicks, GlaxoSmithKline Consumer Healthcare's malted milk drink, holds around a 60% share of its segment, but has still sought to strengthen the entire category, such as by creating a variant specifically for women.

"We wanted to grow the market still further, as there were new user groups whose needs were either not being met, or those we did not realise the need to reach out to," Shubhajit Sen, GSK's consumer marketing director, said.

Other enhancements to the Horlicks range have included biscuits for children, providing proven nutritional benefits.

"We are coming out with product innovations which will be healthy choices backed by scientific research," Sen said.

Cosmetics specialist L'Oreal has placed an emphasis on "accessible innovation" and tailoring goods to suit shopper requirements in different nations.

"Our Garnier shampoo-plus-oil plays on the traditional habit of Indians oiling their hair," Shweta Purandare, scientific director, L'Oreal India, said.

"We have entered the eyeliner category with a non-smudging kajal stick."

Elsewhere, Marico, a beauty and wellness group, discovered Parachute Hot haircare oil while considering how to subsidise heaters, and thus help customers overcome the problem of congealing oil in cold weather.

"While looking at ways to reduce the costs of a heater, we came up with the idea of hot oil instead," says Sameer Satpathy, head of marketing for Marico's consumer products.

Geetu Verma, PepsiCo's executive director, innovation in India, suggested that many indigenous operators are now displaying extremely impressive R&D credentials.

"You can't say it's easier for an MNC to innovate. An MNC has to develop a lot of local innovations," said Verma. "A lot of domestic companies like Dabur and Marico are doing a phenomenal job."

Data sourced from Business Today; additional content by Warc staff