It’s an ambitious target for a business where only one of its 18 food brands, Golden Harvest, currently brings in more than Rs 1,000 crore and where the total revenue from all of these stands at just Rs 3,600 crore (11 personal and homecare brands make up the remaining 10% of its business).
And growth in the FMCG sector is slowing, according to research firm Nielsen, whose new India FMCG Growth Snapshot projects 9%-10% growth across India this year, compared to 14% in 2018, although food is expected to hold up better than personal and homecare, the Economic Times reported.
“At the beginning of the year we saw softening driven by essential and impulse food categories,” the Snapshot reported. “However, this quarter has witnessed a slowdown across all food as well as non-food categories with salty snacks, biscuits, spices, toilet soaps, and packaged tea leading the slowdown.”
It is in this environment that Ashni Biyani, managing director of Future Consumer outlined to the Economic Times plans to grow the company fivefold to become a Rs 20,000 crore business, while shifting the food/home & personal care balance from 90/10 to 80/20.
She earmarked Tasty Treat, which currently has sales of Rs 200 crore, as one brand that can join the Rs 1,000 crore club (others include Karmiq, CleanMate and Dreamery).
“Building a range of bakery products will be a key focus area for Tasty Treat in 2019-20, with brownies, tea cakes, macaroons, Italian biscotti, Swiss rolls, barcake, doughnuts, garlic bread and croutons at various stages of product development, formulation and sensory trials going on,” she reported. Range extensions for existing biscuit products are also in the pipeline.
In recent years, companies such as Procter & Gamble and Unilever have rationalised their brand portfolio to concentrate on fewer, bigger brands. Mondelez made a similar calculation when it was first spun off from Kraft, investing in global “power brands” Like Oreo and Cadbury for growth but is now tilting the balance back towards local brands.
Diageo’s experience of power-brand building, meanwhile, has been about constantly building a consumer base and ensuring brands are both mentally and physically available.
Sourced from Economic Times, Bloomberg, Just Food, Seeking Alpha. Additional content by WARC staff