The rising demand for healthy food among the urban middle class people is attracting many
fast moving consumer goods (FMCG) companies to the health food market. Most firms are focussing on breakfast cereal market where profit margins are high and competition is less.
Presently, firms such as Kellogg's, Mohan Meakin and Baggery's are major players in the breakfast cereal market category, which, presently, stands at Rs 600 crore in India. However, with the rising population of health conscious urban people, larger players like PepsiCo, Heinz India, GlaxoSmithkline Consumer Healthcare and Dabur are also targeting this niche but fast growing segment.
"Health food category is yet niche in India but the trend for healthy breakfast is fast catching up, especially among the urban middle class. People are now paying more attention to healthy breakfast and this is driving the volumes," Vani Gupta, vice-president (marketing), Quaker, PepsiCo India, said.
FMCG: Not defensive, but a growth sector "Since we launched in India in 2006, sales have almost almost doubled in every two years. We expect a further rise in demand," Gupta said.
German firm Dr Oetker, which acquired Fun Food last year, opened Germany's muesli - Vitalis Crunchy - in India. Heinz, which is mainly into ketchup and health drink Complan, is now planning to launch a healthy cereal-based breakfast food. Even rivals GlaxoSmithkline Consumer Healthcare and Dabur are planning to foray into this segment.
"In today's fast-paced urban life, consumers seek easy-to-make, tasty and nourishing breakfast so the traditional breakfast options are moving towards the weekend menu," Oliver Mirza, managing director, Dr Oetkar India, said.
"Of this large market, the corn flakes market is worth Rs 400 crore while muesli is worth Rs 70 crore in India. People are now exploring other healthy options such as muesli and oats," Mirza said. Companies aver that the high commodity price and dippingprofit margins of regular products are also forcing many firms to diversify in this category, where margins are great, volumes are rising and pressure of commodity price is less.
Kellogg's, which hold about 60-65 per cent of the market share in this category, was able to hold on to the prices of its products for almost five years. The firm is marketing to maintain its leadership position by launching value packs priced Rs 10.
Courtesy: Mail Today
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