Aditya Bagri, Director, Bagrry’s India Limited, shares his thoughts about the growing consumer traction for healthy breakfast cereals and how his company is best placed to tap into this opportunity with its expanding portfolio of oats and muesli products….
With so many multinationals and large domestic food companies all now fighting for a pie of the fast-growing breakfast category, which includes oats, cornflakes, muesli, dalia and mixes of traditional breakfast like idli and upma, how would you evaluate the growth prospects for each of these categories going forward? In your opinion, which of these products will grow the fastest, and gain maximum consumer traction?
Owing to urbanisation and an increased preference towards healthy eating, India’s breakfast cereals market is on a growth trajectory. The breakfast cereal market is divided into hot cereals, viz. mostly oats, and ready-to-eat (RTE) cold cereals, viz. muesli, wheat flakes and corn flakes. To some extent, of course, the market is self-propelled, thanks to the higher spending power and hectic lifestyles of urban consumers. The other big reason for the growth of breakfast cereals is the widespread communication on health, especially on the rising incidence of cardiovascular diseases, diabetes and obesity in Indians. Not only are influencers such as doctors, nutritionists and the media passing on these messages, the companies assiduously themselves play the health card in all their communication. Thus, Indian consumers are moving towards a convenient and healthier lifestyle, making breakfast cereals an important category in the food and beverage industry. With consumers making healthier choices, oats and muesli are growing. Th e rise of oats and muesli as a category is a global trend, whereas growth of unhealthy cereals such as corn flakes and extruded sugary kids cereals are declining.
Do you foresee new trends and innovations coming into the breakfast cereals segment currently riding the wave of healthy eating? Which are the new innovations that you plan to introduce for your products?
Health and wellness is one of the fastest growing segments in India and at the same time there are enough developments taking place at the sub-urban sector. With all of this, the breakfast cereal segment is growing both in urban and semi-urban markets.
Consumers are expecting very high quality food products. Their preference was earlier price driven but now it is quality driven. At Bagrry’s, we have been innovating our oats category. We introduced the Oats for India range where we created oats for atta, suji and poha. The idea behind these innovations is to make oats as the staple for Indian consumers. We are also introducing an innovative veggie masala oats, which serves the savoury category of cereals.
Is there a chance of newer products entering the healthy breakfast cereal segment? Are you looking to enter new food segments or extend your product lines?
Considering the longer working hours and hectic lifestyles, most people fail to eat food which can match their nutritional requirements. Therefore, we believe that the next innovation in healthy breakfast cereal segment is ready-to-eat meals or meals on the go. We had run such a model with Indigo airlines where ready-to-eat Bagrry’s products were served to the passengers, and we received a very positive feedback on the same. We are constantly innovating new product concepts and are looking forward to entering some new categories.
How would you describe the competitive USP and differentiators for your products vis-a-vis the competition?
What sets Bagrry’s apart is that we have a long standing commitment to honest nutrition, and quality sourcing of all natural ingredients, which is why all Bagrry’s products are made without adding anything artificial. The nutrition in the products is derived from a natural source, be it whole grains such as oats, natural honey, real freeze-dried fruit pieces or fibre packed bran. Even the chocolate used is free from any artificial flavours and the antioxidants that carefully preserve our products are all natural as well.
At Bagrry’s, exceptional care is taken at every step, right from the sourcing of our ingredients to carefully processing them to ensure that only the best of what we make reaches our consumers.
Over the years, we’ve transformed our production processes with the introduction of new technologies and our complete focus towards in-house research and development.
Which are your best-selling products and what are your plans to grow their market share?
Bagrry’s are the pioneers in introducing muesli to the Indian market as early as 1994. At the moment, we have 12 variants of muesli in different flavours, inclusions and functional benefits. The breakfast cereal market is also being driven by muesli, which is expected to grow by a value CAGR of 17 per cent at constant 2014 prices. As consumers look for healthier breakfast options, the growth opportunity for muesli is very high, as its retail distribution and availability both were still nascent. Of the 11 variants of muesli, the crunchy muesli is our signature range. We are also betting big on the oats market, and have invested in matching health and innovation. At Bagrry’s, Indianisation in the category is not just limited to creating different flavour variants. The company has done research and innovation to create a whole new range that is not just palatable, but also allows consumption in a familiar format. The range is called Oats for India and it includes oats in the form of poha, suji, atta and rice. This also moves oats from a breakfast-only option to a main meal.
What has been the progress and the way forward for Bagrry’s in 2015 and how do you see 2016 in terms of growth, opportunities and challenges?
2015 has been an excellent year for us in terms of innovation. We expanded our muesli range – at present we have 12 muesli variants under our brand. In 2016 we are looking forward to innovation in Bagrry’s Oats. Last month, we introduced a range of veggie masala oats to delight the taste and preference of Indian consumers. The lip-smacking range comprises three different variants – Homestyle, the perfect home-cooked masala oats for the entire family; Tangy Tomato, which has saucy natural tomato flavour; and Curry & Spice, which is made with the choicest of south Indian curry spices. The new veggie masala oats reveal a perfect blend of the finest spices and real vegetables along with added bran to enhance the nutritional value, making it an ideal snacking option without compromising on taste. It is a clean label product, without any controversial flavor enhancers or additives added, which unfortunately is a common practice in the food industry. We are also looking at partnerships and tie-ups in the future.
Do you have a retail strategy for reaching out to the smaller towns and cities and how do you think of the growth opportunities in these geographies?
We are present in over 55,000 outlets, 150 towns and cities, 27 states. Our products are available at all Modern Trade outlets, CSD and CPC canteens and we are sold exclusively at Safal outlets.
We have also tied-up with e-commerce sites such as Bigbasket, Amazon, Snapdeal, Paytm, to make our product available to all our consumers. We are looking to expand distribution in all our key markets to get closer to our consumers. At Bagrry’s, we are always looking to add new places where our consumers can find us.
Tell us about your marketing and branding strategy for expanding your consumer footprint? Have you thought of a way to increase the appeal of your products among kids and wean them away from pasta and noodles?
We have endeavored to connect with our consumers and communicate our honest-to-health values, quality and innovation. We have been communicating the health benefits derived through our products and our propositions through engaging marketing and promotions. We believe in educating our consumers from time to time about the product category (muesli and oats). We are active on the digital platform. Our target audience majorly comprises urban adults, which gives us a huge opportunity to connect with them online through engaging, innovative and pioneering content. Our recently introduced #MuesliRevolution campaign has been the key to driving knowledge about the health benefits of eating muesli. More than the traditional marketing formats, word of mouth promotion has served us with a greater reach among our target audience.
Tell us about your existing production capacity and manufacturing facilities and your plans for ramping up the operations going ahead?
Supply chain has been our strength and we come from a lineage of food processing of over 50 years. We have recently added capacity and are also looking at adding new facilities.
What are your expansion and investment plans for the future?
We are investing heavily into growing and scaling up the business in terms of consumer connect, people and operations. It is an ongoing exercise and we hope to be India’s most trusted brand for health in the coming future.