|
|
|
You can get e-magazine links on WhatsApp. Click here
|
|
|
|
|
|
“Our mission for 2020 is to be a Rs 500 crore brand”
|
|
Monday, 26 October, 2015, 08 : 00 AM [IST]
|
|
|
|
fiogf49gjkf0d  Dr Oetker FunFoods Pvt. Ltd is known as a leading name in manufacturing of sauces, dressings and condiments in India. Though these sauces are inspired by Western cuisine, the company has tweaked them as per Indian flavours and introduced them in India. Among products, the company is leading in mayonnaise, spreads, peanut butter and the pasta sauces category. The Germany based parent company was established in the year 1891 and in 2008 the brand acquired FunFoods. The company functions as a sub-brand under Dr Oetker. Oliver Mirza, managing director, Dr Oetker India Pvt. Ltd, in an email interaction with Harcha Bhaskar talks about the company’s product range, future plans and more. Excerpts:
How big is the sauces, dressing and condiments market in India? At what rate is it growing? What is the trend prevalent in the condiment industry in India?
The sauces, dressings and condiments market was valued at 93 billion and grew by 18% in 2014. The growing popularity of international cuisines, such as Italian, Mexican and Thai, act as drivers of demand for specialised sauces and dressings. Consumer appreciation for Western cuisine further to the exposure by travelling, media and Internet has resulted in a double-digit growth of sauces, dressings and condiments industry. Cooking sauces are still in a dormant stage amongst Indian consumers as changing cooking habits of traditional Indian families act as a barrier; however, a small but growing number of urban households have been using cooking sauces to save time in food preparation. Whereas in the dressings and condiments category, garlic and ginger pastes are emerging as popular options.
Tell us about the manufacturing plant in India, its capacity and the technology used.
Currently, we are operating three manufacturing units - two in Uttarakhand and one in Rajasthan. Next year we will open a state-of-the-art master plant on a 15 acre plot in Kaharani (Rajasthan). This upcoming plant will have a capacity of 25,000 tonne and will cater to our retail and food service needs till 2025. From the upcoming plant, we will also cater to some neighbouring countries and South-East Asian markets. We are sharing the vision of our prime minister Narendra Modi for "Make in India" and hence we are investing in such a world-class facility in India. The upcoming plant will be able to manufacture mayonnaise, spreads, dressings, sauces, syrups and powder mixes. It will be equipped with the latest sauce and mayonnaise making technology from Germany.
What are the various products/variants offered by Dr Oetker in these categories?
Dr Oetker acquired FunFoods – a leading Indian manufacturer of branded packaged food products with a focus on European cuisines in 2008. FunFoods offers an array of packaged products like mayonnaise, sauces, spreads, salad dressings, milk shake mixes, cakes and dessert toppings. When we acquired FunFoods, it was a very small manufacturer with a turnover amounting to less than Rs 30 crore. Since the acquisition, we invested a lot of money and time into standardisation, process integration & upgradation, facility upgradation, and into very robust quality systems. We also invested heavily into compliance. You can inspect our effluent treatment plant at any point in time. It is fully compliant.
FunFoods brand was available earlier also but we can proudly say that the products achieved world-class standards only after Dr Oetker took over. By the way, this was recently confirmed by a quality test conducted by NDTV who compared our FunFoods Mayonnaise against Cremica and imported Mayonnaise from Kraft, Hellmanns and American Garden. FunFoods by Dr Oetker turned out to be the brand with the best quality.
Our retail offering currently consists of 57 SKUs. We are the market leaders in mayonnaise, savoury spread and Italian sauces. In peanut butter we achieved volume-based market leaderships for the first time now.
Our endeavour is to broaden penetration of these categories so that Indians can enjoy the taste of Western food at the convenience of their home itself.
Which of the company’s products has a big demand in India and what is the USP of the product?
FunFoods Mayonnaise enjoys a special space among the Indian consumers as it is ranked India’s No. 1 mayonnaise with approximately 70% value market share in modern trade. In General Trade market, share date is not yet available. With eight variants in mayonnaise namely classic, veg, tandoori, garlic, burger, mint, olive oil and diet, we target the length and breadth of consumers changing palate. Except for the classic variant, the balance seven variants are purely vegetarian and we have been the pioneers with introducing variants like tandoori and olive oil. We understand the taste buds of the Indian consumer and have therefore Indianised our products in terms of taste, flavour, aroma and packaging.
What are the prospects for the growing consumption of international variant sauces and dips in India?
Indian consumers today are bored of their regular food and want to make everyday cooking fun & desirable; adding fun and zest to healthy food too. Exposure to Western food – American, Mexican, and Thai and other cuisines has also made international sauces and spreads a common household item. Besides this, mayonnaise, spreads and Italian sauces have also taken over ketchup and there is a growing appetite for newer flavours.
Pasta sauces witnessed highest growth in 2014 i.e. 71% in terms of value, which substantiates the growing consumption of sauces and dips in India. To tap into this demand, packaged food manufacturers are facilitating the transition to international cuisines by modifying sauces to meet the Indian palate.
Yet some of the offerings are extremely small niche products. Take Pesto for example. There is a small clientele who appreciates Pesto Sauces which are typically consumed with spaghetti or linguines or used with real Italian mozzarella cheese and tomatoes. We were and are still the first manufacturer of Green Pesto Sauce and Red Pesto Sauce in India.
Which are the countries to which the company is exporting products from India?
Right now our product ranges are specific to India. Once we have the new plant running then we will make India the manufacturing hub for SAARC nations and some south-east Asian countries.
Where are the tomatoes and international ingredients procured from in the sauces, dips and dressings? What are the various standards maintained while processing and import/exports?
Tomatoes are procured from local market, we have dedicated vendors who supply us tomatoes as per our specifications. Tomato paste is imported from China and most of the critical ingredients are imported especially from South-East Asia, Europe and American continent. For our dessert toppings, we use cocoa powder from various countries including Ghana. We follow ISO 22000 standards of food safety, HACCP and hygiene. We have certification from German Company TUV SUD.
What research and innovations are currently taking place in the company? Is there any plan to enter new product category or launch new product or variant in the next five years?
We are aggressively working towards launching new products according to the Indian taste. The market is dynamic and Indian food scenario is ever evolving. We keep a tight check on the trends and tap them as they turn into substantial habit. So e.g. we have seen a growing trend of Nachos being served with Salsa and Cheesy dip in cinema chains and QSRs like Taco Bell or Chillis. We already had a salsa offering in the market. Last month, we relaunched the sales in the wide mouth jar for convenient serving and dipping. And this month, we are launching a yummy Cheesy Nacho Dip. This new launch shall complement the existing salsa and will give consumers the same experience at home the way they enjoy in cinema chains or at restaurants. Similarly, we also look at ever evolving consumer needs with existing products. So after testing various packs, we are convinced that the market is ready to accept the different SKUs sizes of FunFoods Veg Mayonnaise. We just complemented our 275g offering with offerings in 100g, 500g, 750g and 875g. The 100g pack for Rs 35 will add consumers to the category.
Paying Rs 79 for 275g is a lot of money for a consumer who never tried mayonnaise before. This 100g pack has a nozzle for an easy application.
Innovation at Dr Oetker works on the basis of looking at the market dynamics and evolution. We do launch products and SKUs almost every single year. In 2010, we had launched the Olive Oil Mayonnaise, in 2011 a few sauces in the Italian range, in 2013 we had launched the Choco Lava Cake and Chocolate Fudge Spread, in 2014 we had launched the Pasta Alfredo with Cheese and Tandoori Mayonnaise. Hence, new launches are a matter of constant evolution for us.
Tell us about market & distribution strategy in India in the coming years.
Dr Oetker is a family brand and helps its customers to create food that is fun to eat and fulfils their demand to eat something different everyday. Our marketing strategy for FunFoods revolves around ‘consumer education’ and ensuring on-shelf penetration. We are present in more than 200 towns across all Indian states. You will find us in all modern trade outlets, self-service general stores and various kirana stores across the country.
Are your products available on e-commerce platform? How is the response?
Our products are available across e-commerce platforms like Reliance Fresh Direct, Big Basket, and Grofers. It is an important medium through which consumers are now buying and we are tapping the same.
After the acquisition of FunFoods, what are the ventures and expansion plans in the pipeline for the company?
Will the German company expand to other countries?
Following the acquisition of FunFoods, our prime focus is to strengthen our position in the Indian market, and extend the brand’s reach to the retail channel as well as the food service sector. In retail, we have been ranked No. 1 in our core categories by independent agencies such as AC Nielsen. Our mission for 2020 is to be a Rs 500 crore brand in terms of revenue and the top choice among consumers when it comes to Western food.
We have consolidated our current offerings in the Indian market under the umbrella brand of Dr Oetker and sub-brand of FunFoods. Also, we keep on evaluating if any product from the global portfolio fits into the local market. E.g. we tried the segment of Crunchy Muesli in 2011 and 2012 and have launched the Choco Lava Cake in 2013 which has been a resounding success. For us, all businesses are local as food is part of the culture and habit of the consumers, hence, we launch a product or a range where we feel that we have something new to offer to the consumer and where the consumer acceptability shall also be there. These trysts with international products shall continue and Indian market will take its own shape; accordingly we are flexible to launch any new product from the international stable.
Dr Oetker has been in expansion mode for the last few years. We have either started on our own or have acquired businesses across countries like China, Malaysia, Australia, South Africa, USA, and the UK. We are already present in more than 50 countries worldwide and each year we look beyond the horizon to expand further.
What challenges is the company facing with regard to the availability of quality raw material, regulations, certification, technology, etc.?
In the current environment, quality is the buzzword and our international claim is “Quality is the best recipe.” Hence, whatever we do we ensure adequate quality check and balances in place to make sure we are in line with the regulatory framework. Ours is a robust supply chain with old vendor link, hence we are able to overcome most of the challenges.
What is the current turnover of the company for the business-to-business (B2B) and business-to-consumer (B2C) segments? How much growth is expected?
B2B is integral to our business and globally also it is one of the strategic pillar. Even now it constitutes 35% of the overall turnover in India. We have been growing at a steady CAGR of 27% and wish to continue the same in the retail side of the business.
Who are the clients to whom you cater? Name a few.
We manufacture customised products for some of the biggest names in the food service industry like Yum Restaurants (Pizza Hut, KFC), Subway, Domino’s Pizza, Costa Coffee, Chillis, Krispy Crème, and prominent hotels all over the country.
|
|
|
|
|
|
|
|
|
|