Friday, February 10, 2012: 04:09:25 PM

TETE-A-TETE

With a Dash of Spice

Rajheev Agrawal – Director and CEO, Nilon, gets candid with Vijayendra Sesodia about the processed foods market in India

Pickles and chutneys play an important role in Indian cuisine. They are a prominent food group and offer the consumer a variety of choices in flavour, usage, textures and ingredients. In India, pickles are used as sauces, dressings, appetisers or condiments, or simply relished as they are. Given the rate at which the packaging and processing industry is growing, the demand for pickles and other substitutes has grown tremendously. Rajheev Agrawal talks about the immense potential that this market holds and discusses the future of the processed foods market in India, in this conversation with Vijayendra Sesodia.

How is the demand for processed foods in India affected by seasonality? What are this market’s major demand drivers?
The most common seasonal trend that we—as processed food manufacturers and retailers— have observed that the demand for pickles trudges during the winter season, especially up North. However, no such season-related peculiarities are observed for other processed food categories such as vermicelli, instant mixes, papads, etc.

The processed food market’s demand drivers are demographic factors such as the growing trend of nuclear families and fast-paced urbanisation. Thus, it is predicted that the processed foods segment will continue to grow in urban areas. Since spices form an integral part of Indian cuisine, the branded segment in this category has grown in leaps and bounds over the past few years. Keeping up with this growing market, Nilon has ventured into the spice market with its launch of basic spices which will soon be followed by a range of blended spices, which are usually in high demand during the winter season.

What kind of challenges has Nilon faced in this market?
The most prominent challenge that the company faced, in its initial days, was to create a recurring demand for packaged foods. Nilon’s products were extensively marketed by the distribution method of sampling. This helped to give potential buyers an insight into the quality, taste and value for money that the company’s products had to offer. This adept and well-thought out marketing strategy helped to cope with the challenge.

As the demand started to spurt, it became important for the brand to deliver consistent product quality and ensure that the regional consumer’s volatile palate preferences and choices were well taken care of. In order to meet this challenge, Nilon expanded and modernised its production plants, and ventured into various new categories of the processed food segment. The brand has been able to maintain its position in this market because of its myriad offerings in categories such as pickles.

Tell us about Nilon’s journey as a processed foods manufacturer
Nilon was established in 1962 as a small cottage industry that focused on very few brands. Today, it is aiming for a `200 crore turnover by the end of this financial year. Nilon has ventured into a diverse range of products such as pickles, papad, chutney, ketchup etc. It is also a producer of ready-to-cook foods such as instant mixes, cooking paste, vermicelli and spices. The company is successfully established as the largest manufacturer of pickles in the world and the largest maker of tutti frutti and roasted vermicelli in India. Nilon manufacture plants are located in Maharashtra and Assam, and its products are exported to various parts of the world such as Japan, France, the US, South Africa, Dubai, Saudi Arabia, Malaysia, Singapore, Australia and Canada. In the next five years, the company expects to touch the `1,000 crore mark in sales value per annum, and to become a major force in the processed food sector. To achieve this, we will have to continuously innovate as per the changing taste preferences of consumers in the high growth potential and large size categories.

What would you like to tell entrepreneurs who are venturing into this field?
I think that the quality of a product that a brand offers is paramount. Today’s consumer is spoilt for choice and will not remain loyal to a particular brand if the product’s quality is compromised. Since customers are ready to pay a premium for a value-for-money food product, manufacturers have a great opportunity to capitalise on this fact. People are increasingly checking for various certifications like FPO, ISO, ISI, PFA etc. Similarly, a large chunk of population also looks for the manufacturing and expiry date. This shows there is a rising awareness among the consumers and they are not ready to take whatever is offered to them.


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