ITC enters ready-to- cook breakfast market

ITC enters ready-to- cook breakfast market

ITC's Aashirvad brand, which has made a name for itself in branded atta, is now in the ready-to- cook category. As Indian families consume on the move, the time taken to cook up a full-fledged breakfast is a bit of a challenge.

There are no estimates for the organised breakfast market due to the nature of a large part of it being made at home. According to media reports, the breakfast cereals market there are a host of players such as Kellogg's and Bagrry's here at over 3,000 crore. Apart from a host of regional players selling the mixes, the Indian part of the breakfast market has the likes of MTR, Gits.

The usual strategy has been to get into a third-party contract manufacturing arrangement that is a well-established norm in the food industry to make it work for the consumer's plate. There is a difference between ITC's foray and ITC's foray. Its agribusiness gives it a sourcing advantage. ITC also has a deep understanding of the Indian consumer's needs, given its large food and hotel businesses. This foray will help it premiumise the Aashirvad portfolio, as there is a large B2 B opportunity, according to an Edelweiss report on ITC from earlier this week. It goes on to say that the plan is for ITC to launch dalia, besan and multi-millet cereals.

There is a clear focus on the Indian palate and that is with a sound rationale. A F&B expert, K S Narayanan, who has spent several years in the F&B industry and is now an independent advisor, says that being in exotic and foreign cuisines means limiting the opportunity to small niches. It may not be the right thing to do for a mass player like ITC. He says that using their existing backend infrastructure, knowledge on cuisines and recipes coupled with the front-end capability on distribution both online and offline or domestic and exports is a win-win approach for the company.

The ready-to- cook segment is one where many players have come and gone. The reasons for failure vary from case to case, but success comes with no more than a few ingredients. What has succeeded so far are those products and solutions where the consumption was already large or essentially repeatability was high and where a convenience element was brought in by ready-to- cook. Narayanan said that consumers to make predictable end dishes helped the cause. He adds that targeting the traditional Indian breakfast of poha, upma, idli is the right approach, since consumption for each is already very high. One can see how PepsiCo tried to extend its Quaker Oats to a savoury breakfast portfolio. A lack of a robust backend did not save the day. ITC's Aashirvad, already a Rs 6,000 crore at the consumer spend level, could just work, as it has a presence in salt, dairy products, premium flour and spices. The ball is in the consumer's court.