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“Health and wellness growing at 10%”
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Monday, 20 November, 2017, 08 : 00 AM [IST]
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Shraddha Joshi
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 An iconic bread brand for five decades, Modern set its journey in the public sector in 1965 as Modern Bakeries (India) Ltd. In fact everything about the company is as fascinating - it was rechristened Modern Foods India Ltd (MFIL) in 1982; became the first company to be privatised by the Government of India in 2000; and relaunched in June 2017 as Modern Foods Enterprises Pvt. Ltd. The new entity is 100 per cent owned by Everstone Capital and has taken shape following intensive efforts over the last 12 months, with significant investments in manufacturing, and R&D at the company’s new innovation hub in Chennai, as well as thorough efforts on consumer insights, strategy and design.
In its new avatar, Modern wants its customers to ‘Thrive, and savour life to the fullest’ by helping them make smarter choices from its expanded range of healthy, nutritious and tasty bread and bakery products. In an email interaction with Shraddha Joshi, Aseem Soni, chief executive officer and board member, Modern Food Enterprises Pvt. Ltd, spoke at length on the bread market while throwing light on developments such as health and wellness products taking center stage in the bakery segment. Excerpts:
What is the size of the bread market in India? At what rate is it growing?
The overall bread market in India, including the organised and unorganised market, is estimated to be worth Rs 6,500 crore. The overall growth rate is not more than three per cent but health and wellness products in particular are growing at around 10 per cent.
What was the whole idea behind relaunching Modern bread?
We acquired the brand in April 2016, soon after which we went into consumer research. I think it was consumer insights that concluded the brand required a complete overhaul, both in terms of portfolio offerings, that means kind of variants we are taking to the consumer, and also the entire look and feel of the brand. I think it was the consumer who told us that while they loved the brand Modern and they had grown up with the brand, somewhere the younger consumer implied that this is not the brand for them and we wanted to change that. So while we had lot of loyal consumers for Modern but we were not recruiting new consumers and that’s why it was important for us to relaunch the whole brand.
How has been the journey of Modern since Everstone took over?
After the acquisition, we started working on our new product portfolio; this took six to nine months, especially, to develop the new concepts. On the marketing side, there were a lot of changes as well as on the organisation side. We brought in a new leadership team to drive the different functions, and we did a whole lot of work around new variants and sales and distribution expansion.
Any plans to expand the product range? What kind of investment are you planning? What are the various new portfolio features?
We don't plan to expand beyond the concept which we worked on. There is no single expansion; it's a combination of everything. It's a journey for the company to evolve, to become different in style and across different fronts. For every quarter and year there are different plans for expansion or investment that take place.
What are the current trends and innovations in the Indian bread market?
Unfortunately, not too much. However, that's a good opportunity for us as we are now focussing more on health and wellness segment. The change we would like to bring is higher consumption of health and wellness foods with our new portfolio.
How is the distribution network of bread sector in India?
Bread is very widely distributed product; one may not find bread in its core format everywhere: for instance, sliced bread format in much smaller cities and villages. There are other variants of bread such as pav and bun that get sold to the consumers; so penetration is there in the villages but in different formats.
With repositioning of the brand in the health and wellness space because of new products, will the demand for bread get affected?
As we start investment in health and wellness portfolio, the category will look stronger. We are offering the products that consumers have not previously seen under one roof and we have also started advertising our products. In future we will have trial and sampling among consumers and hence it will impact our health and wellness portfolio and enhance the already high growth rate of this segment.
Tell us about your new innovation hub in Chennai.
Our entire new portfolio has been developed at our new innovation hub in Chennai and when we get into non-bread spaces, which include other bakery products, they, too, will be developed and innovated at the hub.
How important to you is consumer's brand loyalty and preferences?
Brand loyalty is very important for every company and Modern Foods also has loyal customers and we also have taken steps to improve our products to attract the attention of new-age consumers for the first time.
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