Tell us about your new venture Yours Food and its positioning in the marketplace.
The Rs 10,000 crore Indian biscuit market is choc a block with players wanting to grab a fair share of the category which witnessed a turnover of Rs 3,000 crore in FY 2011-12. With a potent mix of players, both national and regional, the category has enormous growth potential. Realising the tremendous opportunity, we decided to set up our own company. We started Yours Food a year back. At present, both of us are managing the entire operation as directors of the company. We combined our collective expertise to form this new venture under the brand name Yours. S.N Agarwal is a visionary and veteran in this trade, and Vikash brings in new energy to drive the business forward.This is a completely new initiative led by a newgeneration of entrepreneurs and we have absolutely no connection with Surya Food and Agro Ltd, makers of Priyagold biscuits, which is our family business. The management, organisational structure, and the business strategies are completely different. We will primarily focus on medium and premium range of biscuits, to begin with. The Yours range is positioned as the new generation biscuits. Lots of research and development and market survey has been undertaken to develop the range in terms of taste, pricing and packaging. We are using state-of-the-art machinery, which is a fi rst of its kind in eastern India to manufacture these products. We will be focussing on producing international quality products at a reasonable price, and building a strong distribution network both in modern and general trade.We have already launched a couple of varieties of biscuits under the Yours brand and more will be launched. We have also got into categories like noodles called Wow Chow, and will be launching a range of tea, which will be outsourced. We will start with great tea in both leaf and dust variants and then gradually move onto Darjeeling and Assam tea as well. Eventually, the idea is to develop Yours as an integrated FMCG manufacturer. We are setting up a high profi le manufacturing facility at a place called Dankuni in West Bengal.
Please elaborate on your manufacturing.
We are in the process of completing our Dankuni plant. Once that is done, the plant will have the capacity of producing 70 to 80 tonnes of biscuits, and about fi ve tonnes of noodles per day. We have invested heavily towards the modernisation of the unit in terms of importing fully automated machineries, high tech packaging, sandwiching, etc. As of now, we already have one unit running at Narayanpur in West Bengal from where we have launched a couple of products. We will set up two more plants in Durgapur and Siliguri in West Bengal by 2015. Going forward, we are also looking at acquiring a few small units in and around West Bengal to meet growing demand. We have already made an investment of roughly Rs 100 crores, which also covers research and development.
Do you have plans for markets other than West Bengal?
Biscuits these days have emerged as a very crucial category in the overall value chain; they are a highly nutritional food product,and ready-to-eat. The category is growingenormously; in the last four years it has witnessed more than 17 percent growth. We have started with West Bengal, but will soon move to other parts of eastern India, and by 2015 we hope to cover the entire length and breadth of the country.
Who are your biggest competitors?
The company might be a year old but we are not new to this industry. Having been in this sector for so many years, our target is to produce high-quality biscuits at value pricing. We have placed utmost emphasis on the quality of the biscuits that we are producing and will never compromise on it. We don’t want to name any single player as our competitor because there are many who are producing good quality products for a long time. In terms of pricing, there might not be that much of difference but we are confi dent that our quality will emerge as a key differentiator. We have already launched our products in West Bengal and have been getting good feedback from the region. We also want to be present in allied categories like cakes, cookies, etc to gain a competitive advantage.
What are your retail strategies?
We have not undertaken any specific strategy for organised retail as such. We have employed distributors in every district and they will have managers overseeing their work. They will pretty much cover all channels be it organised or unorganised. However, going forward, we will have a team which will focus solely on modern trade channels because almost all big FMCG companies are doing this. We cannot possibly ignore the emergence and importance of modern trade. In fact, even the unorganised stores are trying to bring in the modern look and feel to attract more customers. So we will have to keep an eye on the emerging shopping scenario and device strategies like proper store display and retailer incentives. As we expand our presence in newer geographies we will undertake more aggressive marketing strategies to exploit the modern trade channels.
What is your pricing strategy?
Pricing of our products is more or less similar to other FMCG companies present in the same category, but our quality will become the deal maker. In biscuits, we have the entire range, and we have started with a Rs 2 and a Rs 5 pack and this can go up to Rs 30 depending on the quality and pack size. The prices will be a little higher for cakes and cookies. We are yet to decide on the pricing of the Wow Chow noodles, which will be available under three variants and each of the variants will have a number of sub-variants/fl avours. The rural markets have emerged as a major growth driver for all the FMCG players. We are also thinking of bringing in innovations to penetrate these markets quickly, and are thinking of launching interesting pack sizes at attractive price points to appeal to the rural consumers.
Any advertising plans/strategy?
We don’t want to quote any numbers as such but we are very aware that advertising will play a strong role as we scale up our operations. In fact, it will become very crucial in the long run and we are prepared to make substantial investments for advertising and brand building as we strive to become an integrated FMCG player. In West Bengal we have already started our brand campaigns, alongside hoardings, banners and other promotional activities. We are planning a series of new launches and special campaigns for Durga puja, which is the
What sales turnover are you targeting?
We are expecting to break even in the next two years. By 2015 we plan to have a sales turnover of Rs 250 crore and attain a market share between 10 to 15 percent in the organised segment in east India. Our pan India presence is also expected to be completed by 2015, and we will be employing around 3,000 skilled and unskilled workers.
What are your export activities? Any plans for contract manufacturing?
We are presently exporting to USA, Australia and New Zealand. These are mostly cream biscuits and we are trying to get into an arrangement where they will also distribute our brands. We also have plans to set up a major distribution hub in Dubai for catering to the Middle East and East African markets. We are estimating our exports will be to the tune of 15 to 20 percent once our production capacity increases to 70 to 80 tonnes per day in our new plant. We are also in an advanced stage of negotiation with a leading manufacturer from Sweden for an exclusive tie-up to launch premium range of candies for the South East Asian markets. We are also contract manufacturing for global retailers like Wal-Mart and Metro Cash & Carry who have our products on their store shelves. We have not entered into any tie-up with Indian retailers as yet. Since our capacity is going to increase manifold in future, we can contract manufacture for other companies as well, but our main focus will be on developing our own products.