Page 24 “WE HAVE THE LARGEST BASE OF LOYAL CUSTOMERS … · INDIA EDITION F&G Retailing Expansion...
Transcript of Page 24 “WE HAVE THE LARGEST BASE OF LOYAL CUSTOMERS … · INDIA EDITION F&G Retailing Expansion...
INDIA EDITION
F&G Retailing Expansion of imported and gourmet food is emerging as a significant trend
Category Watch: SpicesNew and innovative offerings and the big areas of opportunity for industry players
Retail CollaborationRetailer-producer partnership are a must for mutually profitable objectives
Page 22Page 22 Page 72Page 72Page 32Page 32
January 2018 Volume 12 Number 1 • Rs 100 www.indiaretailing.comJanuary 2018J 8 Volu
“WE HAVE THE LARGEST BASE OF LOYAL CUSTOMERS IN CHENNAI”K. VIJAYA KUMAROWNER, PONNU SUPER MARKET
Page 24
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4 | Progressive Grocer | Ahead of What’s Next | January 2018
VP/Group Publisher Jeffrey Friedman
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January 2018 • Volume 12 • Number 01 • Pages 84 Editor’s Note
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Every year in January, for the past 10 years, we have been organizing the largest mega congregation of stalwarts from the food retail galaxy – Th e India Food Forum. For over a decade now, the Forum has served as India’s pre-eminent knowledge and business networking platform for food retail. Th e 11th edition of India Food Forum will be underway from 17th-19th Jan. at the Bombay Exhibition centre, bringing together once again key decision makers from every part of the food supply chain, apart from the country’s fi nest talent in food research, creation, distribution and retailing.
As in the past years, the groundbreaking agenda of the Forum this year will help to focus and reframe our understanding of the trends shaking up modern food retailing. A number of changes – socio-economic, cultural, technological – are shaping the Indian food landscape with disruptions in business models of companies, and in terms of their interaction with consumers and responsiveness to their needs. As the shape, size and construct of food industry is changing fast, this evolution needs to be supported by continuous improvements in the food supply chain, inclusive of product development, production, processing, distribution and marketing.
Th e recommendations and solutions by experts at the Forum address the challenges in the food retail eco-system and act as a guidemap for boosting the odds of success in this hypercompetitive market. We will bring you the key takeaways that the Forum’s panel discussions, workshops, master-classes and round tables are known to off er. Ensure your copy and watch out for the next issue of the magazine.
Lokesh Arora, Vice [email protected] | Mob: +91 9999033612
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AHMEDABAD Monark J. Barot, Asst. Manager
Membership Team: Priti Kapil Sarika Gautam
02_Editor Notes_Jan 2018.indd 4 1/12/2018 5:17:47 PM
6 | Progressive Grocer | Ahead of What’s Next | January 2018
CONTENTS
08 SUPPLIER
Neo Foods is among the top growers and packers of pickled vegetables in India
10 ONLINE RETAIL
GoodToGo, a raw meats online company in the Delhi-NCR region, is out to change the meat retailing experience
16 STRATEGY
Retail costs in brand building
22 ROUND TABLE
Collaborate to Succeed
28 REFRIGERATED & FROZEN
Bakers Frozen
January 2018, Volume 12, Issue 01
RETAILER-SOUTH
24
K. Vijaya Kumar, Owner, Ponnu Super Market, talks about the evolution of his brand from a small provisions store to the instantly-recognized supermarket brand with eight stores in Chennai that pull in a turnover of over INR 150 crore annually.
78 COLUMN
Growth and consolidation: Retail mantra in 2018
80 WHAT NEXT
Food, Beverage & Non-food Products
IN EVERY ISSUE
“As a local supermarket brand, we’ve the largest base of loyal customers in Chennai”
30 FEATURE
The Spice King and Founder of MDH: A Journey of Grit, Courage and Determination
32 CATEGORY WATCH: SPICES
On the Spice Route Trail
54 RETAIL INITIATIVES
Cambay Tiger Seafood Mart: Making a difference to the organized retailing of seafood
60 RETAILER-NORTH
SRS Value Bazaar plans to launch 10 to 15 more retail stores within a year
64 DIGITAL SOLUTIONS
Retailing on Demand
66 CATEGORY MANAGEMENT
Fresh Thinking
72 GUEST COLUMN
Food retailing in India – the way forward
03_Contents_Jan 2018.indd 6 1/12/2018 6:56:55 PM
Retailer-South
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Progressive Grocer spoke to K. Vijaya Kumar, Owner, Ponnu Super Market, about the evolution of his brand from a small provisions store to the instantly-recognized supermarket brand with eight stores in Chennai that pull in a turnover of over INR 150 crore annually.
“As a local supermarket brand, we’ve the largest base of loyal customers in Chennai”
Tell us about your store’s retail journey so far and your brand’s positioning. Ponnu Super Market started off as a traditional provision store in the city of Madras in 1967. It became a supermarket in the year 1995. In 2015, we opened a 40,000 sq. ft. hypermarket at Avadi in Chennai. Ours is a family ownership enterprise and currently we operate one hypermarket and seven supermarkets in Chennai. Today, the Ponnu Super Market brand enjoys a distinct market positioning and we are the leading super market local chain in Chennai. All our stores are strategically located across popular high streets in the city and are known for their quality products, competitive prices and superlative customer service.
What is the customer profile at your stores? Our stores cater to all customer segments but mostly the shopper profi le comprises people from the middle class and the higher income segments. Our stores have earned a reputation as an ideal shopping destination for families and the largest demographic at
K VIJAYA KUMAROWNER, PONNU SUPER MARKET
Retailer South_Ponnu Super Market.indd 24 1/12/2018 6:31:19 PM
Retailer-South
January 2018 | Ahead of What’s Next | Progressive Grocer | 25
our stores comprise shoppers that are thirty years and above.
What is it about your stores that customers most identify with?As a local supermarket brand, we probably have the largest base of loyal customers with us in Chennai. Customers at our stores appreciate the high standards of customer service that we off er, including free home delivery. We are known for our proactive approach to understanding and meeting the needs and requirements of our customers and quickly acting on customer feedback and take immediate corrective measures if required. Th anks to our promptitude on the customer service front, we have been able to retain and grow our customer base year on year.
Ponnu Super Market is among the top supermarkets in Chennai with eight stores in different locations of the city spanning total retail operations equal to 81,000 sq.ft. The flagship store located in Avadi near the Chennai railway station, is a multi-storied hypermarket known for stocking a wide variety of goods including, provisions, vegetables, fruits, apparel (gents / ladies / children), consumer durables, (mixie, grinder, etc) electronic goods (plastic items, cookware, artificial flowers, gift articles, gift coupons, household items, among other things. Among the supermarkets in the city, it enjoys a special reputation for its largest stocking of provisions, vegetables, fruits and electronic goods.
Since 1995, when Ponnu first donned its supermarket avatar and after the opening of its hypermarket in 2015, the brand has transformed into an an iconic representation of retail in Chennai and is widely appreciated for its merchandise variety and correct pricing. “Our cordial staff, wide variety of goods, and reasonable price has helped to create a special place in the heart of the shoppers,” says K. Vijaya Kumar, Owner. A much appreciated feature of Ponnu stores is their daily and weekly promotions and special schemes and deals on the occasion of festivals like Deepavali, Pongal, Ramzan, Christmas, New Year, etc. “On these occasions, we inform our regular customers through SMS notification to not miss these great deals. At such times, the shops are always swelled with people flocking in more number than on the regular days. Fresh vegetables, fresh fruits, provisions, grocery foods, frozen foods, dairy foods, gifts, toys, stationary, cosmetics, dresses, fashion jewellery, books, bags, home appliances are the products that sell the most,” informs Kumar.
Ponnu Super Market has also launched its grocery shopping App, which makes it very easy for customers to order grocery, bread & dairy, branded food, vegetables, fruits, personal care products and household products. “Using our grocery app, a customer can easily search products from our vast menu of products. The app makes it convenient to browse multiple products and place the order. As we offer free delivery for orders above a certain amount and multiple payment options including cash on delivery, the application has proven to be a big hit with our customers,” says Kumar. Ponnu hypermarket stocks over 30,000 SKUs across 2,000+ types of products represented by over 100 brands. The supermarket chain raked in a turnover of Rs. 150 crore in the last fiscal and is looking to increase revenue by 10 per cent annually.
AMONG CHENNAI’S MOST POPULAR SUPERMARKETS
Today, the Ponnu Super Market brand enjoys a distinct market positioning and we are the leading super market local chain in Chennai. All our stores are strategically located across popular high streets in the city and are known for their quality products, competitive prices and superlative customer service.
— K. Vijaya KumarOwner, Ponnu Super Market
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Feature
30 | Progressive Grocer | Ahead of What’s Next | January 2018
All of us have a life to live but very few people live a life truly inspiring and extraordinary. Th e life of the 95-year-old founder and CEO of Mahashian Di Hatti (MDH),
Dharampal Gulati, is studded with so many crowning accomplishments that ordinary mortals might take several lifetimes to achieve. Born on 27th March 1923, in the city of Sialkot, Pakistan, he was raised in a loving family where the parents wanted him to study and get a good education. Dharampal’s father Chuni Lal sold spices from a small shop Mahashian Di Hatti, which he opened in 1919. However, due to fortuitous circumstances, the boy’s studies had to be cut short early in life. When he was in the fi fth standard, Dharampal quit school to help his father at the shop.
Although it can be said that Dharampal had to give his studies a go-by, the boy did not miss out on getting a worthwhile education in the school of hard knocks of life – something that helped shape and build his character and spirit. Th e family migrated from Pakistan to India at the time of partition, and stayed at a refugee camp in Amritsar for a while. Dharampal, along with his brother-in-law, then travelled to Delhi in search of work, and stayed at his niece’s fl at. After spending some tough, gruelling years, when he pushed his luck trying his hands at and dabbling in many things, he eventually found the spice trade, which became his calling card
thereafter. With a humble beginning from a modest shop in Karol Bagh, Delhi, Dharampal Gulati laid the building blocks and the foundation of his future empire in the spice business, whose worth is multi-crore today and growing in value.
Th e ‘spice maker from Sialkot’ was now getting popular by the word of mouth. Local fame brought in more business and more business brought in more money. As the business took off , Dharampal rented another shop in Chandni Chowk in 1953. He then decided to purchase a plot in Kirti Nagar in 1959 to start his own factory, and this led to the birth of Mahashian Di Hatti Limited. Th e company is one of the biggest brands of spices in the country today. Besides being a manufacturer, MDH is also a distributor and exporter of ground spices and spice mixtures. It specializes in several unique traditional blends of spices suitable for diff erent recipes. Currently, MDH has more than 60 products in its kitty and it exports to about 100 countries, including the U.K., Europe, U.A.E., USA, Canada, South East Asia and others. Its best-selling products include Deggi Mirch, Chat Masala and Chana Masala – each selling roughly a crore packets every month. Th e company has about two dozen factories in India, supplies its products to over 1,500 dealers, and has offi ces in Dubai and London.
Dadaji or Mahashayji, as Dharampal Gulati is fondly referred to – attributes the success of his
I feel there is a lot of scope to
widen the Indian spices market and
for converting consumers from
unbranded products.
— Mahashayji Dharampal Gulati
Founder & CEO, MDH Spices
The Spice King and Founder of MDH:A Journey of Grit, Courage and Determination
How Mahashayji Dharampal Gulati overcame the many adversities that came his way and through doughty pluckiness and an enterprising spirit scripted the success story of India’s most popular masala brand MDH.
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32 | Progressive Grocer | Ahead of What’s Next | January 2018
Category Watch Spices
On theSpice Route
Trail
The spices category is a growth leader in the food industry. Spices form an important part of virtually all recipes in all cultures, not only for their fl avor and seasoning of foods
but also for their numerous medicinal values. India is known as the home of spices and boasts of a long history of trading with the ancient civilizations of Rome and China. Spices of India have found mention 7,000 years ago in the ancient civilizations of Egypt, Mesopotamia, Sumeria, Arabia and China, far before the Greek and Roman civilizations came into being. Historically, the Indian Sub-continent was well connected with the world’s trading powers, which purchased spices in abundance from here. As a consequence, spices have played an important role in joining various cultures from around the globe and getting them to converge at a single point. Indian spices have been famed throughout the world since
times immemorial and have been closely associated with cultural traditions, magic, preservation, medicines and embalming. In fact, India’s famed spices inspired the quest of Europeans to come here and even re-script our history.
India is the largest producer, consumer and exporter of spices and spice products in the world. It is also the largest domestic market for spices in the world. Th e country is known for its wide variety of rich, earthy spices that lend immense fl avor to dishes throughout the country. From tandoori chicken and corn chaat, to saag paneer and butter chicken, spices are used in cooking to bring out unimaginable fl avors. Key spices produced in the country include pepper, cardamom, chilli, ginger, turmeric, coriander, cumin, celery, fennel, fenugreek, ajwain, dill seed, garlic, tamarind, clove, and nutmeg among others.
In terms of consumption, over 5 million tonne (MT) of spices are consumed annually in India.
Over 5 million tonne (MT)
of spices are consumed
annually in India. According to
industry experts, this consumption
is almost 90 per cent of all spices produced in the
country.
The growth of the spice market in India is expected to be driven by factors such as growing number of innovative product launches,
growing number of consumers eating out, wide range of applications of spices and herbs extracts and rising preference for new and exciting flavors among consumers. The Indian spices market is
projected to reach approximately USD 18 billion by 2020 with growth in the sector expected to be led by branded spices and spice mixes.
32 | Progressive Grocer | Ahead of What’s Next | January 2018
By Sanjay Kumar
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January 2018 | Ahead of What’s Next | Progressive Grocer | 33
Category WatchSpices
powders, blends and seasonings are also exported. Th e country produces and exports about 75 varieties of spices to 120 countries. Th e major importers of Indian spices are the US, UK, Germany, China, the UAE, Vietnam, Indonesisa, Sri Lanka and Malaysia. Globalization has improved spice trade across the world, as countries can import and export them more conveniently now than before.
Exports of Indian spices and spice products surged to a record growth in 2016-17, touching 9,47,790 tonne, valued at Rs. 17,664.61 crore ($2,633.30 million), thereby registering an increase of 12% in volume, 9% in rupee terms and 6% in dollar terms, according to the state-run Spices Board. During the fi scal 2015-16, exports stood at 8,43,255 tonnes, valued at Rs. 16,238.23 crore ($2,482.83 million). Chilli continued to be the most demanded spice in FY17 with exports of 4,00,250 tonne amounting to Rs. 5,070.75 crore, registering an increase of 15% in volume and 27% in
According to industry experts, this consumption is almost 90 per cent of all spices produced in the country. Ginger-garlic, dry chillies and turmeric together contribute 44 per cent to 48 per cent of total spices in India. Th is consumption share is not much varied in the rural and urban markets. Th e southern region of the country plays a signifi cant role in the spices market. It is not only the largest market but its average monthly per capita consumption is also the highest among all regions. Although the region of north India follows next to the southern region in terms of market share, but its monthly per capita consumption is among the lowest at Rs 92. On the other hand, the western region with 23 per cent market share has monthly per capita fi gure of Rs. 118, which is the second highest after the south market. Both regions exhibit higher per capita consumption than all-India per capita consumption fi gure of Rs. 103. Kerala, Andhra Pradesh, Gujarat, Rajasthan, Orissa and Madhya Pradesh are among the leading spice producing states in India.
Market size & exportsTh e current market for spices, according to one estimate by a market research agency, is Rs. 40,000 crore and it has grown at a CAGR of 13 per cent over the last decade. Th is estimate projects the market to grow twice as big as its present size by 2020, with the same growth rate. According to another study, the Indian spices market is projected to reach approximately USD 18 billion by 2020 with growth in the sector expected to be led by branded spices and spice mixes. Th e Indian government is aggressively promoting spice exports through various initiatives such as setting up of spice parks. Spice parks off er common processing facilities to both producers and exporters. About Rs. 6,000 crore is estimated to be the branded market in spices, which is still dominated by unorganized players. Th e old culture of buying loose spices and grinding them in old fashioned equipment called “chakki” is still dominant. Th e market share of organized players is only about 15-20% and is led by players such as Everest, MDH, MTR, Catch, JK Masale, Eastern Condiments, Ruchi, Shelly’s, ITC Spices, Mother’s Recipe, Ramdev’s Patanjali, DNV, Shubh Food’s Tadka Blast, Paras Spices, and a few others.
Globally, Indian spices are the most sought-after, given their exquisite aroma, texture and taste. India primarily exports pepper, chilli, turmeric, ginger, cardamom, coriander, cumin, fennel, fenugreek, celery, nutmeg and mace garlic, tamarind and vanilla. Processed spices such as spice oils and oleoresins, mint products, curry powder, spice
The country produces and exports about 75 varieties of spices to 120 countries. The major importers of Indian spices are the US, UK, Germany, China, the UAE, Vietnam, Indonesisa, Sri Lanka and Malaysia.
Regional Share - SpicesMonthly Per Capita Spices
Consumption (Rs)
South
28.4%North
27%
East
18.6%West
23.3%
North-east
2.7%
Source: NSSO; MPCE analysis
North North-east
All-IndiaSouthWestEast
92.26
73.2778.7
117.74
103.5
140.36
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Retail Initiatives
54 | Progressive Grocer | Ahead of What’s Next | January 2018
The WestCoast Group is one of India’s biggest, fully integrated seafood companies in the country. Under its premium fl agship brand Cambay Tiger – which caters to the growing
demand of high quality seafood – WestCoast Group exports probiotic farm-raised seafood to over 30 world markets, including the US, Canada, Europe, South Africa and other Asian countries. Th e company is also engaged in domestic trading and distribution of prawn feed and other aquaculture inputs required for farm cultivation of seafood. Its products – prawns, tilapia and basa – sourced from its own farms, are hugely popular and have a strong customer base in India and abroad. Th e Cambay Tiger brand has a very strong presence in Modern Trade as well as
West Coast Fine Foods (India) Pvt. Ltd. – one of India’s leading domestic distributors of fresh and frozen seafood, vegetables and vegetarian snacks (Frish brand) – has a presence across India’s leading retail outlets and is a supplier to hotels, restaurants & caterers. The company’s latest initiative in retail has been the launch and build-
up of the Cambay Tiger Sea Food Mart, which brings international standards of fish retailing in India.
Making a difference to the organized
retailing of seafood
Retail Initiatives
General Trade stores across the country. Besides this, premium restaurants with a focus on quality seafood, such as Japanese restaurants serving sushi, are Cambay Tiger customers. Cambay Tiger and its products have a presence in India in over 1,000 stores and in 50 plus cities, including leading retail outlets such as Big Bazaar, Godrej Nature’s Basket, More, Foodhall, Haiko and HyperCity.
“We are one of India’s leading domestic distributors of frozen and fresh seafood through our omni-channel distribution network that covers retail, food service and recently, e-commerce,” says Shivam Gupta, Director–Brands & Distribution, West Coast Fine Foods (India) Pvt. Ltd. Th e company, since its inception in 2008, has gone all out to tap people’s growing preference, especially in the metros,
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Retail Initiatives
for buying their seafood requirements from modern retail outlets, compared to the traditional fi sh market. Consumers are slowly but surely gravitating towards seeking higher quality, hygiene and convenience in the matter of their food choices and WestCoast Group believes that it is perfectly poised to leverage this transition in consumer behavior. Due to the growing demands of urban lifestyle, there is more acceptance for marinated, ready-to-cook format of foods today. Th ere is a growing interest to try new ready-to-cook, marinated products such as Garlic Butter Prawns and Prawn Skewers, which off er convenience of cooking with very little skill or equipment. Th en, there are consumers who want to try seafood but lack the knowledge of buying or cooking fi sh. “To engage with these customers, we host cooking sessions with our experienced culinary team at the customers’ homes to help them get the best recipes,” says Gupta.
With over fi shing becoming a problem in many countries, including India, WestCoast’s initiative in breeding farmed fi sh has a social element to it. Th e fi sh catch is reducing every year and sustainably farmed seafood is the need of the hour. In many parts of the world, consumers are already moving towards farmed fi sh, and the category is already attracting premiums abroad. Also, keeping in view such considerations as price fl uctuation and a general infl ation around sea catch, the move towards farmed seafood is inevitable and the trend is likely to grow stronger in the future. Companies like WestCoast, which have developed a specialization in the category, stand to benefi t immensely from the trend towards farmed fi sh. Cambay Tiger prawns are reared at the company’s farms in the Gulf of Khambat (Cambay).
Retail Initiatives
January 2018 | Ahead of What’s Next | Progressive Grocer | 55
From being a manufacturer of seafoods, you have ventured into retailing? What was the idea behind setting up your own shops?Seafood is such a delicate produce that has a
reputation of being easily spoiled. We wanted to
leverage our backward integration and the trust
and reputation our brand enjoys to showcase
how we believe seafood should be handled and
sold. This has culminated into us opening our first
Cambay Tiger Seafood Mart in Bandra, Mumbai in
October 2015, followed by Lokhandwala (Mumbai)
in 2016 and Defence Colony, Delhi in 2017. CTSM
is a boutique shop that gives a unique shopping
experience of buying seafood. The ambience,
design, display, and human resources encounter
at the mart has been tailored to give customers a
first-of-its-kind seafood buying experience in India.
What is the marketing positioning of your store?We are positioning ourselves as seafood experts.
We believe, we understand seafood really well. We
understand how it should be handled, cooked and
Shivam Gupta-Director –Brands & Distribution, West Coast Fine Foods (India) Pvt. Ltd., which operates the popular seafood brand Cambay Tiger, speaks about his company’s venture into seafood retailing with Cambay Tiger Seafood Mart and how it is filling the opportunities and gaps in the market with its innovative and organized retailing of seafood.
“We are helping ll the demand for farm-to-fork in sh, just like in chicken”
Cambay Tiger Seafood Mart in Mumbai and Delhi is a boutique shop that gives a unique shopping experience of buying seafood. — Shivam GuptaDirector–Brands & Distribution, West Coast Fine Foods (India) Pvt. Ltd.
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