No big company has entered the banana chips segment. What inspired the Chhedas to go bananas over chips? Progressive Grocer speaks to CMD Ashok Chheda, and MD Kishore Chheda of Chheda Specialities Foods Pvt. Ltd, about the pioneering efforts of the Mumbai based company in making banana chips a mainstream snack not only in the home market but also overseas and their vision of how retailers can pitch in to expand and strengthen this snack segment…
Which are the snack food products produced by your company?
Ashok Chheda: Chheda Specialities Foods Pvt. Ltd., established in 1993, initially started with one product – banana chips. Since then we have introduced many core snack products such as potato chips, ethnic snacks, 3d pop ups, chikki’s, etc, besides introducing banana chips in new flavours. We have two segments in our products menu: traditional snacks and continental snacks. Traditional snacks include banana chips and namkeens while Continental snacks feature cheese balls and choco vanilla snacks. Our manufacturing unit is equipped with ultra modern machines, which helps us to ensure that we offer a consistent quality of chips and namkeen with focus on hygiene and afford ability.
Of all the snacks, why did you pick on banana chips?
Ashok Chheda: We are the pioneers in manufacturing and marketing of banana chips in organised way. We brought our vision to bear on the banana chips segment by selling the product in a consumer pack with appropriate branding. Since this product is processed manually, no big company has taken a chance to enter this segment. We took it as an opportunity and have worked hard to achieve the leading position in this segment. We have taken this product across the world and have received appreciation from far and wide for our initiative.
Which are the major markets for your products?
Kishore Chheda: Our products are well-known in Mumbai, Thane, some other parts of Maharastra & south Gujarat. They are also loved and appreciated well in some export markets. Apart from being a fast growing brand in India, we have made our presence felt in major international markets in very short span of time.
What is your retailing strategy?
Kishore Chheda: We are focusing more on Modern Trade because it helps to control marketing and distribution cost.
Tell us about the growth potential of your products and the performance of the snacks category?
Ashok Chheda: The snacks food industry has performed well over the past few years, benefiting from the growing demand for snacks among consumers. Favorable product pricing, increasing income levels of consumers and their busy urban lifestyles have also contributed to the rising popularity and growth of the category. In view of these considerations, we are expecting a 20 per cent growth in this segment.
What are the challenges before the category?
Kishore Chheda: Competition in this category has become very fierce. New players in the unorganised sector have made this segment even more competitive. Price rise for all raw materials and those of agri products like potato, banana, pulses, grains is a major challenge, apart from the rising cost of packaging materials.
Any suggestion for better category management/ merchandising and category innovation by retailers that could help the category grow more impressively?
Ashok Chheda: There are plenty of steps that retailers can implement for sound category management strategies. To start with, instead of taking subjective decisions, retailers should go for more data-driven analyses, which will help their category managers to make better product decisions with better results and more satisfied customers to show for. Of course, this is simpler in theory than in practice.
But retailers need to have a greater customer focus. Sales is often the only indicator that Indian retailers use to measure performance and for identifying the areas to improve. It is on the basis of sales that allocation of more space to a category gets decided. For example, although apparel and electronics have limited relevance to food and grocery formats, many retailers are lured by the possibility of increasing sales. So they provide the space to these categories in their stores in a disproportionate manner even though they fail to convince customers that they have the credible “merchandising authority” to sell these items. I think there is much scope for greater strategic category management, which is key to reducing costs, increasing sales and improving profit margins — all the while keeping customers happy.
Your advice/suggestions/recommendations for new players entering the market.
Ashok Chheda: Once a business is established and thriving in its home market, it is often seen as the right time to branch out into a new market. If the company enjoys strong sales, has great brand awareness and the business is stable overall, it may be the right time to take the plunge. However, as with all new ventures, there are risks attached to this move and it is not a step to be taken lightly. A new market will not be so comfortable and there will be new competitors and unknown threats. The key to success is a disciplined approach with the appropriate level of investment in doing a thorough market analysis. The golden rules to follow before entering new markets are: choose the right country or region; check the cost of doing business; know the people and the competition; choose the right partner; understand the challenges; know the law, and begin with the right attitude.