Future Consumer Enterprise Limited (FCEL) that focuses on food and fast moving consumer goods sector in India and has the product range from foods and spice, snacks and beverages to quality flour and instant mixes has recently launched more than 26 in-house brands in 60 plus categories from frozen to fresh value added products to non-food.
What are the products you have launched under FCEL?
We have launched more than 26 brands in 60 plus categories from frozen to fresh value added products. We have launched bakery range, personal care, personal hygiene and home care. Our whole thinking is all about understanding India where the gaps are and where we can convince.
Presently we have over 30 brands across food and non-food categories with about 350 SKUs and we will introduce about 1000 SKUs by the end of the current fiscal.
Which is the fastest growing category among the wide range of categories?
Desi Atta brand which was launched last year has got very good success along with Tasty Treat. Our Sangi’s Kitchen brand which has six flavors like chutney kind of sauces, deeps condiments has also worked very well so we will launch around 40 to 50 flavors in it. Finally the Golden Harvest and Carnet brands are also doing well.
Please tell us about your tie-up with rice brand?
We have tied-up with rice brand, they are more into basmati rice but they understand the rice as a category, they believe in manufacturing so we agreed to do the joint venture. There are a lot of people who understand the process, manufacturing, system and we would love to align with them.
While rural part is more or less lagging what is the kind of market share you are looking further?
Around 60 percent of Indian depended upon agri income and once its goes up then it will come into consumption in a big way. We are present into 244 towns in rural India and we have tied up Rajasthan government on converting the public distribution system into kind of modern store. We have already converted close to 1000 stores and by June 2016 we should be converting close to 5000 stores.
Adhar is another business wherein we are opening stores in Punjab, Haryana, Gujarat and Rajasthan which is also catering to the rural market. We expect some of our SKUs which we have built will be getting into that market. We are excited about the rural economy and if it shakes up we will take the advantage of that. Thus, we are strategizing to reach to rural India with Adhar stores and Public private partnership.
Food industry in general is growing about 6 to 7 percent what is the kind of volume share that you are targeting?
Once we get into our store we are looking at 60 to 70 percent in-house brands volume share in the next four to five years. Currently we are at 30 to 35 percent of volume share. By 2021 we are expecting Rs 20,000cr in sales from in-house brands. We are looking at more than 25 percent volume growth YOY. I believe the food industry growth is much higher than 6 to 7 percent.
This year we are expecting 100 percent growth. We have started in a small way but the ambitions are high. Our interest is in multiple products.
Why do you think that the MNCs are lacking in creating Indian taste?
We believe food is equal to culture of any society. Food is community led and society led so people understand the food better. MNCs have their limitations they are good in many things but in terms of creating a unique product are very difficult for them. They are normally introducing the products which are doing well elsewhere. In this scenario Indian companies have very good chance to do much better than MNCs. It takes five to six months to develop the product, fix the taste, bring in stability and approve.
How you observe the decreasing margin and stable volume demand in the market?
It depends on product to product. In bakery products like biscuits margin always shrinks and volume grows. Currently there is deflation in pulses. In India $300bn of food market is getting generate in every three years.
What will be future launches?
Our next move will be taking dairy products all over India. In the next 45 to 60 days we will be launching oats brand called Kosh. We are launching another personal care brand in partnership with Swiss firm Mibelle.
We have already launched Nilgiri convenience store in Delhi and North part of the country and we are going to take it pan India. Further we are looking to open 360 hypermarkets and hundreds of small stores. With this development our retail side alone will be close to Rs 45,000cr and our brands can be part of this growth.
We have expanded our FCEL brands reach through Nilgiris, KB’s Fair Price, KB’s Conveniently Yours, Big Apple, Adhar and Easy Day stores.