The biscuit company is going through a challenging phase as it tries to become a food company. It is entering the unexplored categories and broadbanding its current portfolio. The company has started experimenting with new products that include upma, poha, porridge, oats and other breakfast products in the Mumbai. The company believes that the reaction they receive from Mumbai will give them a fair idea of how they would act going forward as Mumbai has a large cross section of ethnic communities.
BIL is not new to diversification. They have been trying to de-risk their portfolio for a long time now and to some extent they have been successful. While biscuits still contribute as much as 75 percent of their total turnover, they have been successful in categories like diary products and salted snacks.
Cereals and milk constitute over 50 percent of daily food intake of an urban consumer and it is this category BIL is focussing on. But in this market value addition will be the key as the competition is intense. Besides Nestle, Amul and Parag Milk food there are many regional players who are looking at this segment aggressively.
The company should rely on its power brands (according to the company, the brand that does a business of over 200 crore is a power brand) to enter the segment. These ready to cook foods tap into BIL’s expertise in grains, thanks to its experience in the bakery business. However one interesting thing to note here is that the company is clear about staying out of cold breakfast segment.
Kelloggs India, which has for long now been trying to build a market in this segment has not been very successful. The company has launched a new campaign with Karishma Kapoor as its brand ambasaddor. The new chocos has both the components that I talked about earlier. It is made up of whole grain and secondly it is to be consumed with milk. The only thing that is missing is that it is to be had with cold milk. Although Kellogg’s has tried to build a market for this food but I think, Britannia knows the Indian market well and it is still time before the Indian consumer switches to cold breakfast!