Avani Davda, MD, Godrej Nature’s Basket, speaks to Progressive Grocer about shifting consumer preferences towards fresh and locally sourced foods and healthier alternatives, the importance of being Omnichannel for retail outlets, the brand’s farm to table approach as a way to offer the freshest and finest food experience to the consumers and about her company’s vision of expanding its presence across markets by supporting healthier living.
What is the customer proposition and marketing positioning of Godrej Nature’s Basket?
We aim to redefine India’s freshest and finest food experience and be the go-to place for our customer’s ‘Daily Food Delights’. With a selection of the freshest fruits and vegetables, finest meats and seafood, a wide array of cheese, irresistible bakery products and the finest collection of wines, we are the neighborhood store providing great food experience to our consumers.
What is your location strategy? Which locations do you prefer and what part do they play in your store sales?
We are present in three key markets: Mumbai, Pune, Bengaluru. With the recent asset-light strategy, we plan to expand our reach to new markets while strengthening our presence in the existing markets. Our partnership with Magsons is one of the first steps towards increasing our presence in key markets.
Of the gourmet and international product range at your chain, which products are recording maximum growth?
Gourmet products are an important part of our product basket as are domestic produces. Indian consumers have evolved in the last few years. They have experienced global cuisines but at the same time are finding their way back to the roots. Thus, we have seen a tremendous increase in the adoption of premium domestic products across categories. In response, we have reduced our share of product imports as most of it is available in India, and moreover, we wanted to make sure that we keep products which would be available on the shelf throughout the year and there is no waiting period for it.
Global diet trends including gluten-free, vegan, keto, paleo, etc. have seen an uptake. Consequently, consumers prefer products that can help them lead a healthier lifestyle regardless of their territorial origin. Similarly, studies have shown that consumers today want to have at least one freshly prepared meal every day. Therefore, the propensity and preference to consumer ‘fresh’ have gained traction in the market. Indulgence categories, too, are witnessing a wave of Indianisation. Premium chocolates and bakery products by Indian brands have witnessed a high growth and acceptance with the consumers.
In your view, which new food products at your stores will likely gain sales traction in the coming days?
Food and vegetables, dairy and staples are fast-growing segments. Two trends stand out: premiumisation and healthy alternatives. In response, we have grown our basket of L’Exclusif and Healthy Alternatives products. Our new range of high-quality staples (Natures) has received a fantastic response from the market. Earlier, only 25 percent of the average consumer’s monthly bill was from fresh categories; today, it is about 45 percent, and in some categories, it is as high as 55 percent.
Which are the new and emerging categories in your store?
I often state that our owned label, Healthy Alternatives, represents the changing consumption pattern in the country. The number of SKUs under the brand has multiplied in the last few years. This resonates with the evolving lifestyle preferences of the millennials. Consumers today want to eat and live a healthier life, and they are willing to learn, adopt and practice new consumption patterns.
What, in your opinion, are the big pull factors for gourmet and International/ Imported foods in India? Could high prices be a major inhibiting factor to the wider acceptance and growth of gourmet and International foods?
Imported food constitutes about only 15-20 percent of the total organized retail space. For us, imported produce forms less than 40 percent of our SKUs. More than the price, the changing preference of consumers are playing a key role in the transformation of the market.
Earlier, consumers believed important global food brands which were important should be made available in the market, and they were willing to pay a premium price for the same. Gradually, we have seen a change in consumer consumption pattern. People are now proud to consume what is locally grown and sourced. There is a conscious consumption of ‘good-for-you’ food; people want to eat a lot more ‘fresh food’ than packaged ones.
Today, consumers are aware of domestic brands that can offer the freshest and finest food experience. There is a plethora of premium, high-quality products that also offer consumers the opportunity to support domestic farmers and brands. Changing lifestyles, expanding urbanization, increasing health awareness and the boom in organized retailing have resulted in increasing the demand for such alternatives.
Our consumer study has revealed that people prefer to eat a home-cooked healthy meal at least twice a day. This is supported by the rising share of healthy food in the monthly basket of Indian households. As mentioned, 55 percent of our home delivery and online orders are for the ‘fresh’ produce. We have always promoted healthy living through our products and communications alike. Healthy living is one of the core pillars of our customer engagement initiatives. Earlier, this month, we launched our live healthy campaign wherein we inform and educate consumers about various products and steps one can take to lead a healthier life.
Please describe, citing specific instances, how you are using technology to enhance customer experience and improve operational excellence?
Technology is at the core of a seamless Omnichannel experience. Godrej Nature’s Basket is a brand that has earned a reputation of providing excellent consumer experiences. Our commitment to providing the freshest and finest products to our consumers require the right backend solutions that monitor each stage of the operations and guaranteeing high standards of safety and hygiene. The acquisition of online grocery store ekstop.com has helped to strengthen our online presence and operations. Data and technology today helps in predicting consumer demand for thousands of SKUs and ensuring continuous store-level availability at all times. Reaching out to the right consumer, at the right time, on the right platform is critical today. Thus, we use data analytics and technology to curate personalised offers based on each consumer’s consumption pattern. This improves the overall engagement and conversion rate.
Tell us how much of your private labels/ house brands account for the share of food and grocery sales? Which are your top-selling PLs in food? What are your plans to augment and expand your PLs?
We have three private labels: Healthy Alternatives, L’exclusif, and Natures. Our private labels are a response to the demands of the consumers. As mentioned previously, consumers today are looking at two broad trends of premiumization and healthy lifestyle. Resultantly, our private labels today have exhibited a growth rate of 15-20 percent. We are expecting this to grow to 25 percent in the coming years. As part of our new growth strategy, our thrust will be to grow these three labels in correspondence with the changing consumption pattern.
How would you assess your progress and achievements so far?
From our genesis as a world gourmet food store, we have evolved according to the changing preferences of the consumer. In the following years, we found the retail landscape was transforming at a fast pace. We realized that in India there is definitely a market for neighborhood stores. Our customer engagement revealed there is a growing market for fresh categories such as food, vegetables, bakery, eggs, and meats. Despite the rise of e-commerce model, consumer continue to prefer ‘touch and feel’ of products in these categories. They also want a store that is in close proximity to their neighborhood, which is capable of delivering fresh produce on a day to day basis. Today, we are proud to be a neighborhood store that offers daily food delights. We have also made the brand more contemporary and approachable. Consumers love brands that listen to their needs, and this is evident from the growth we have experienced over time. We are delighted that we are being reckoned as a neighborhood store offering the freshest and finest produce. Our vision is to support healthier living by expanding our presence across markets.
What is your roadmap for the future and how do you look at the future potential of your store format?
Based on our asset-light strategy, we plan to expand our reach to a key market. By the end of financial year 2022, we would have around 60-70 operational stores at key locations. Our target is to be a Rs 1,000 crore and profit after tax (PAT) positive brand by 2022.