After tasting the humongous success of its edible oil brand Healthy and Tasty in West Bengal and Karnataka, Emami has launched the brand nationally. The brand, which contains soyabean, sunflower, rice brand, palm and mustard oils with healthy ingredients, is manufactured and marketed by Emami Agrotech Ltd. With this launch the company is aspiring to capture the larger market share by targeting around 4-5 lakh retailers directly and clocking the turnover of Rs 5000 in three to five years.
What made you launch Healthy & Tasty oil nationally?
Launched 4-5 years back Healthy & Tasty is our premium brand available across West Bengal and Karnataka. Presently it is the Rs 400 cr turnover brand with the market share of 18 percent in West Bengal, so after tasting the success we thought it is the right time to take it nationally. We believe that in the next 3-5 years Healthy & Tasty will be the Rs 5000 cr brand. Also to support the brand we devoted Rs 200cr of investment for advertising and marketing.
What is your production capacity and what is the investment?
Emami Agrotech is the edible oil and bio diesel company. We do around 5000 tones of bio diesel everyday in two units at Haldia and Krishnapatnam in Andhra Pradesh. We are also setting up production units in the western part of the country in Kanda and Jaipur in Rajasthan. The Jaipur unit will be operational in the three to four months and Kanda may take 15 months.
In the Jaipur unit, which will be having crushing capacity of 500 tones of mustard, we will invest Rs 80- Rs 100 cr. We import crude oil store it and refine it. We do all types of oils including soyabean, sunflower, ricebrand, palm and mustard. We have four brands, Healthy & Tasty, Best Choice, Rasoi and Bake Magic. Soyabean crude is imported from Argentina, Sunflower from Ukraine, Palm from Indonesia and Malaysia. The Mustard and Ricebrand oil are local oils.
How many retailers are you supplying to directly and indirectly?
Emami distribution network is covering more than 40 lakh outlets indirectly and around 6 lakh outlets directly. Nationally we will be having more than 3000 distributors supplying to more 4-5 lakh outlets directly soon. In this second phase of expansion we will be available in Maharashtra, Delhi NCR, UP, Punjab, Haryana, Odisha and Bihar. In the third phase of expansion we will be available in Chhattisgarh, North-East and Uttarakhand.
How do you beat the competition in the market?
We believe that with more competition more market opens up. With penetration of more brands people will become more mature towards packaged oil and more advertisement will be done to prevent adulteration. We launched rice brand oil a year and half back in West Bengal and today we have got a market of around 60 percent. Fortunately it is the largest selling category in the oil segment with around 20 percent growth annually.
What is your ecommerce presence?
We are on Amazon and some other websites but not in a big way. We should now evolve new routes. It will take us another year or two to launch our eCommerce portal. We are paying attention towards digitization overall. Automation is our key and we are willing to invest into that. We are focusing on digital marketing and social media marketing. The consumer’s way of buying is changing hence we cannot stick to traditional way of reaching the consumer.
What is your current turnover and the investment plans?
Emami is Rs 50,000 crore valued group with the turnover of around Rs 12,000 crore and approximately 20-25,000 people working for us. Emami Agrotech did around Rs 6000 crore turnover last fiscal. Our total investment in the edible oil segment, which requires a lot of working capital, is Rs 800 crore. We are further investing on assets of Rs 700-800 crore in our Kandla, Jaipur, Haldia and possibly in JNPT units. In the oil industry the profit margins are not too high we all play in the range of 2-3-4 percent.
How big is the edible oil industry in India?
Used in all households’ edible oil is 100 percent penetrated category in India with the market size of Rs 1, 60,000 cr. To some extent the malnutrition in India is also related to the lesser consumption of oil in India.