Parle Agro: Snack bites

Parle Agro, the maker of popular beverages Frooti and Appy, Bailey packaged water and Mintrox confectionaries, has entered the salted snack market with the launch of Hippo, a baked wheat snack.

The company has launched Hippo in five variants — Chinese Manchurian, Hot-n-Sweet Tomato, Thai Chilli, Yoghurt Mint Chutney and Italian Pizza — and the price points are aggressive: Rs 5 for 15 gm and Rs 10 for 38 gm. “Snacks will be an important category for us as we look to grow from a Rs 950-crore company now to a Rs 3,500-crore company by the end of 2010-11,” says Parle Agro Joint Managing Director and Chief Marketing Officer Nadia Chauhan.

The opportunity sure is huge. The branded snack market is estimated at Rs 6,500 crore and is growing at 20 to 25 per cent per annum. The market has strongly-entrenched players like PepsiCo’s Frito Lays (Lays, Kurkure and Uncle Chipps) and ITC (Bingo). With Parle Musst Stix and Chips, Parle Products, the Sharad Chauhan-owned company, too will be a rival in this category.

However, Hippo has been positioned differently from chips which are fried and made from potatoes. Hippo is made from wheat, is baked and has no MSG (monosodium glutamate), GMO (genetically modified organism), trans-fat and cholesterol. The positioning, according to Chauhan, “is a guilt-free snack for hunger moments that can arise anytime and anywhere.”

A direct rival in this space could be Marico which had earlier this year forayed into the snacks market with Saffola Zest, a healthy baked snack available in three variants (Chatpatta Masala, Mast Masala and Saucy Tomato) at price points of Rs 10 for 20 gm, Rs 25 for 50 gm and Rs 45 for 100 gm.

Still, Parle Agro plans to have a bigger snack portfolio in the days to come. “This is just our first brand and we will have more launches in this segment as we plan to become a complete food and beverages player,” says General Manager (foods division) T Kanagsabai, hinting at the possibility of more snack brands, new price points and variants under Hippo during the course of the year.

Targeted at the youth, the advertising and marketing campaign for the brand will see the mascot, Hippo, come alive as the company will soon begin its below- and above-the-line mass media advertising.

Videocon - brand makeover

Looking at an aggressive multi-fold growth with an emphasis on technology, quality, innovation, value and services penetration, Videocon Group has unveiled its new eco-friendly green brand identity and tagline: ‘Experience Change’.

The ‘V’ in the new Videocon logo is composed of two animated green, lava-like shapes — called Chouw and Mouw —with distinct identities of their own. Chouw and Mouw are ‘live’ characters, and will be used through a series of short videos to tell simple stories. Both have certain personality traits, based on their physical attributes.

KR Kim, vice-chairman and CEO, Videocon Group, said: “The brand reinvention will involve our employees and keep them engaged, energised and rewarded — as a strong workforce results in even stronger products.”

Subhiksha Debacle

"There cannot be smoke without Fire"
For a long time we have been hearing news of Subhiksha not making timely payments to vendors, having empty shelves as vendors have put Subhiksha in lower priority, reports of people looking out trying to jump the sinking ship, and so on. With the employees PF not being paid (Subhiksha has some 5 Crores of PF dues!) and the Satyam story fresh in everyone's eyes this time things are more in the open.
R Subramanian has been in denial mode for several months has now come out in the open. With empty shelves and deserted showrooms, Subhiksha is sinking and needs "Rs 300 crore immediately'' to re-start operations, the company's founder chairman R Subramanian said. "We got into trouble during the second half of last year, when we were unable to tie up funds for our ongoing operations. That slowly started choking and has lead to paralysis of operations completely now,'' he said.
Detailing his outstandings, Subramanian said that his company owed Rs 45 crore to suppliers, Rs 20 crore to employees as salaries and another Rs 24 crore as rentals for various stores. "Our outstandings are only so much, upon getting Rs 300 crore debt, we will then look at restarting operations'' he added.
Subhikhsa is now on the block available for grabs. Not the best time for Subhiksha to be in the market for sale as valutions for all retailers are pretty low. The contenders are Reliance Retail, Aditya Birla Retail, etc.

Dabur Retail - Dreams turn sour

Blame it on the recession!! Dabur NEW U stores that started operations early last year are on SALE.
Dabur, the Delhi-based FMCG company, has mandated Grant Thornton to get a buyer for its retail venture, people familiar with the matter said. They said Dabur has lost interest in the chain as the economic downturn has made the environment tough for the company to pursue its retail plans.
The venture had a struggling existence marked by slow growth — there are just 11 ‘new-u’ stores — and exits of CEO Peter Baker and merchandise head Graham Fraser a couple of months ago. A Dabur spokesman denied any plans to sell the chain. “In fact, we plan to set up 12 additional stores this year.”
Several retailers in India are facing a tough time with Subhiksha doing down under, and several new entrants having put a hold to thier expansion plans. The redeeming factor is that most of the organised retailers are backed by companies with deep pockets like the Tatas and the Birlas. But we need to keep a close watch as some other retailers might be in silent talks to get out of thier retail businesses.

Mahindra retail

The Mahindra Group is one of the latest entrant to retail sector. Mahindra Intertrade, a fully owned subsidiary of Mahindra and Mahindra, has entered the organised retail business. The retail foray of the Rs 18,000-crore group is through the brand name “Mahindra Retail”.
Despite the recession and the global gloom, Mr Raghunath Murti, Executive Vice-Chairman, Mahindra Intertrade, said, “The group believes that this is the opportune time to enter and extend its distribution business into direct retailing, when the organised retail market is expanding in India. As such, it is a natural extension of the group’s existing business,” he said.
Mahindra Retail plans to invest up to 1 billion rupees during the financial year ending March 2010 to open stores for mother and child products, a company official said on Wednesday.
Mahindra’s entry into retail will likely not attract the kind of opposition the other companies have because of the kind of products it wishes to sell: toys, apparel, and other such products.
The group, which also has interests in automobiles and real estate, has a majority stake in the retail venture, while private equity firm ICICI Ventures will hold 26 percent stake, he said.
The company has so far opened speciality stores for mother and children's products in Ludhiana, Pune and Ahmedabad, said Venkataraman, who inagurated the company's store in Delhi called 'Mom and Me'.
" We will shortly open such stories in Mumbai, Bangalore and other major tier I and II cities," he said.
Apart from distributing toys, games and apparel under licenses from international brands like LEGO, Disney and Mattel, Mom and Me stores will offer products of Mahindra and other Indian companies, he said.
According to industry estimates, India has an organised retail market for mother and child products worth 70 billion rupees, growing at a substantial rate annually, he said.
"There have been some good advantages of the downturn in our segment," he added, pointing out that economic slowdown, which has pulled down rents and costs of products has benefitted the retail sector. " Indian market in the long term is very promising. We need to take it by step by step," he said while declining to provide details about expansion plans or revenue targets for the year.