||RETAIL CHRONICLES || 15th to 30th April,2019

RETAIL CHRONICLES Fortnightly Newsletter

| Volume 3 - Issue 12 |

15-30 APRIL 2019

Evolution of 03 breakfast industry in India

Pg 05

05 Future of

Beverages Industry in India Pg 03

07 BATA Revamp: Can

Pg 05

they pull it off?

09 Retail News

Pg 07

Pg 09

Retail Lab SIMSR K J SIMSR, Mumbai Contact:Â +91-8445090885 , +91-7045361866 retaillab@somaiya.edu

"The key is not to prioritize what's on your schedule, but to schedule your priorities" Stephen R. Covey

Evolution of breakfast industry in India - Sagar Anam “Breakfast is everything. The beginning, the first thing. It is the mouthful that is commitment to a new day, a continuing life” -A.A Gill Reasons to evolution: Indians have inclination towards consuming their quintessential hot, cooked breakfast.

However, Indians lifestyles are changing especially of people living in urban with increasing spending power, greater time-poverty, higher need for convenience, and health consciousness. These factors have encouraged Indians, to opt and focus on breakfast .The influence of ‘western’ lifestyles and eating trends has played an effective role in opening the gateway for experimenting with different tastes and varying eating preferences for breakfast.

Not just the lifestyles but Incidences of diseases such as heart attacks, diabetes, cholesterol and blood pressure are pushing consumers to switch eating preferences from indulgent to wholesome, from unhealthy to healthy diet. Breakfast manufacturers are likely to benefit from this trend.

Millennials: Millennial, between the age group of 18 and 35 years of age is becoming the driver force in consumer markets and redefining India’s consumption story.

With increasing focus on jobs, studying and high amount of time being spent on social media means less time for meal during the day time, millennials understand the importance of a healthy and good breakfast early in the morning.

Numbers: Mohit Anand, managing director, India and South Asia, Kellogg’s India, said that he believes: “One in four urban Indians actually skip breakfast and nearly 70 per cent have a nutritionally inadequate breakfast, led in part by stressed and busy working lives. This presents a strong case for the increase in consumption of packaged, nutritious and convenient options” According to “India Breakfast Cereal Market Outlook, 2021”, India’s breakfast cereal market was growing with a CAGR of 22.07% over last five years. The India Breakfast Cereals Market is expected to reach USD 889 million by 2023 at a fastest CAGR of 20%, during the forecast period. The India Breakfast Cereals sale has surpassed 69 million Kg in 2017, registering a volume CAGR of 5.6%, during the forecast period. The consumption of Breakfast Cereals observed a faster growth during the past five year, which is expected to continue.

Kellogg’s India, Bagrry and PepsiCo Quaker are the three leading companies capturing more than 75% of the market.

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Market Players making great strides: With the growing demand of breakfast in Indian market and some innovative strategies and marketing mix adopted by some new market players like ID batter, legacy brands like MDR have been successful in making some big leaps in the Indian breakfast industry by understanding the pulse of consumers.

ID has been successful in creating a high brand recall amongst customers as a fresh, hygienic and healthy RTC (Ready to cook) foods at affordable prices to customers. Customer base being people looking for convenience, preservative free and home-made quality traditional Indian food mixes.ID Fresh Foods has been successful in achieving a yearly turnover of around Rs 100 crores in 2018.

MTR targeting millennials has now set the stage for them at a bigger platform. To reach this new audience, there has been an overall change of approach that includes changes in messaging as well as media choices. The recently launched 3minute breakfast range is an indication of that.

Also to make their presence stronger MTR Foods will join competitors such as Aachi Foods in leveraging the e-commerce space.

Future trends: Gone would be the days when people will be restricting themselves to have typical breakfast foods. With the increasing popularity of ethnic food dishes of Japanese, Mexican and Middle East along with the desire to have a healthier diet, will have an impact on the Traditional breakfast foods such as cereal, orange juice, toast etc. which might find it difficult to continue as the mainstay breakfast staples.On the go breakfast, protein bars will be easily making room for themselves as a prominent choice of breakfast.

With more and more options available, Traditional breakfast drink options like fruit juice, milk, tea and coffee have some competition too. Smoothies made from vegetables, fruit, seeds, nuts, oils and cold pressed vegetables juices are widely available in most cities.

Challenges for manufacturers: Going into the future to maintain the growth in breakfast industry, it won’t be obviously just about product innovation. Breakfast manufacturing Companies should think of innovation of other kinds that meet the need for health and speed— . innovations at the shelf, of the pack, of the production process— because there is no shortage of adults, especially Millennials, who want but aren’t getting the early- in-the-day nutrition they need to get a jump start on the day.

Companies need to fight on many fronts firstly they need to convince customers that they are having nutritional benefits combined with convenience and yet, they are not want compromising on taste The data shows that breakfast won’t go away and is here to stay, but it will look different, and it will occur in different places with different foods. There would be people who would want to sit down, relax, and enjoy the most important meal of the day. How can you make them feel they have done so, if they don’t actually have the time? How are manufacturers going to tap the rural markets which has a greater potential for growth?

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Future of Beverages Industry in India Bharat Gupta

Raise a Toast to Health!

Indian billboards are dominated by the youth with swag guzzling colas. We need our Pepsi and Coke with pizzas and pav bhajis.

With disruption been the middle name of this era, it seems the flow is shifting towards juices including beverages like tea and coffee.

Tea, Coffee or Me? Coffee consumption is up by 6% in the last few years while tea consumption has been showing only a 3% annual growth.

Rising middle class, growing brand awareness, and the availability of international experiences at home are fueling the coffee culture in India.

Even in tea, green tea is the preferred healthy option which has anti-oxidant benefits.

India’s beverage industry at $19.5 billion, has a potential growth rate of 20-23 % year on year.

While the market was led by hot beverages; tea and coffee, other categories in the market included powdered drinks, juices, and mineral and flavoured water.

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With customers looking for options from the carbonated drinks, packaged juices found a market for itself. India fruit juice market is majorly driven by the factors such as rising health consciousness, as a result of which the consumers now prefer more organic beverages over carbonated drinks which are free from added sugar and artificial flavours and preservatives The top game is changing rapidly with the juices and fruit drinks Real, Slice, Tropicana, Rooh Afza and Tang had pushed Pepsi and Coke out of the top five best-selling brands in India.

Pack a Punch The packaged fruit juices market can be divided into three subcategories, viz. fruit drinks, juices, and nectar drinks. Fruit drinks, which have a maximum of 30% fruit content, are the highestselling category, with a 60% share of the market

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Fluids with new Technology While Juice and cold- pressed juice companies like Paper Boat, My greens, raw leaf, Fresh presser, La frux etc. saw rounds of investment and growth, anticipating the upcoming trends and tremendous growth of juice and health drinks.

A Competitive Landscape Dabur is the market leader in the Indian packaged juices market with its brands Real and Real Active.

It accounts for almost 55% of the total packaged juices market, and is followed by PepsiCo with around 30% share.

The packaged juices are available in tetrapacks, tin or pet bottles; but tetra-packs availability has the largest share in market with almost 90% in packaged juices. They are available in various size packs.

Several Indian business firms have entered this emerging segment and have been a reason for actual flourishing of this packaged juice sector. Organisations like

So, really, what is needed is an entirely new production model that focuses instead on (a) reusable/refillable bottles, implemented through a deposit scheme; (b) biodegradable packaging, like innovative Ooho water bubbles, Wiki Pearls, and such; and (c) bottles made from materials like aluminium and glass that have much higher collection rates and greater value that makes them desirable to recyclers (d) Making use of glass, tin cans and Tetra Pak for beverages other than the regular milk sold pouches.

The road ahead for beverage industry seems to be full of innovation and challenges but also a strong demand to be catered.

Irony is that the alcohol industry has also seen a growth at galloping rate with socials with a glass of wine in hand as new norm!!!

Future would be veggie juices which are tasty served in kulhads!!! That would be the healthy swag statement‌for the sophisticated and elite Indian.

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revamp: Can they pull it off?

- Onkar Joshi “I don’t come to Bata store”, the boy told the grandson of Thomas Bata, founder of the Bata.

The boy opened the mind of the 125 years old giant to rethink about its brand image in the market. The ‘pedestrian’ image of Bata was creating a problem for the brand in today’s world.

Bata! An extraordinarily powerful brand operating in more than 70 countries and five major continents.

Current Situations: Bata is known for its quality and availability anywhere. Though the quality of the brand is yet not criticized by the customers in the era where newer brands are coming up with innovative products for youth, Bata has just fallen behind the competition. The ubiquity of Bata is creating problems for the brand image.

Competitors: The major competitors of Bata such as Adidas, Puma etc. are creating footwear for a long time but haven’t fallen from the minds of customers as Bata has.

Taking into account several factors Bata finally realized that going for rejuvenating not only the brand image but also operations and distributions is the only option they can choose to sustain in today’s competitive markets all over the world.

Healing Attempts: Now Bata is investing a large amount of money particularly into developing markets so as to heal the injury.

Recently Bata officials told that it will renovate the stores in India. The earlier stores of Bata used to look dull and unattractive for the youth. Bata is now trying to get more attention to youth and women by reinventing the stores.

Youth doesn’t get attracted only by looking at the store. The innovative products in line with the recent trends must be there. Keeping this in mind, Bata is now also trying to modify its three manufacturing units in India.

Internet presence is most common and important parameter in today's world for doing business.

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Bata has its online presence but it needed a look. Bata has now invested in this factor keeping in mind their target of improving sells by 10 % every year through e-commerce channels. Bata has come up with training centers at Bangalore, Mumbai etc. so as to train its employees for providing better services and in-store experience.

In this competitive world, building brand image and keeping it intact has become extremely difficult due to a price war and quality war. It seems that Bata is a late entrant in the modern world as its competitors are already using AI and machine interfaces to market and sell their products.

Upper hand for Bata: Bata has some of the major benefits in the market due to its longer presence. It is a known brand to almost every customer as affordable footwear with good quality. It has to just adjust itself with newer youth demands and trends. It has to retain its current customer base so as to compensate the expenses on the renovation. This is the way they can pull it off.

It has returned nearly 180 percent gains in the last three years and more than 3,000 percent in the past decade, making it a mega wealth creator.

The chief financial officer of Bata also gave credit to the newly introduced designs which are in line with the trends in the market for the improvement in the revenue. Bata India revenue mix has changed significantly. Now the products in the range if Rs.500 to 1500 contributes to the 60 % of its revenue.

The profit margins are widened in FY 2019 from FY 2017 by 6 % (52 % TO 58 %). This clearly suggests that Bata has not remained a cheap brand today but still people are accepting it.

Bottom-line: In recent years, the attempts of the improvement in every section by Bata, so as build the lost loyalty have been successful. We can surely say that Bata has been successful in reinventing itself.

Changes and Effects : The primary decision and investments by Bata has started showing effects on the equity share price. Shares of Bata India surged 80 percent in the last 12 months compared with the 4 percent decline in the NSE Nifty 500 Index.

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Retail news at glance Mukesh Ambani may use his 5,100 Jio Point stores to kick off a retail revolution Sports Direct's Mike Ashley considers bid to buy Hamleys Flipkart rejigs leadership team, appoints Sriram Venkataraman as COO November retail inflation falls to 2.3 pc.

Amazon in advance stage to buy stake in Future Retail

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Our Team Content Head

Raveena Gupta

Content Team Sagar Anam Piyush Sinha Shubham Thakur Bharat Gupta

Retail Chronicles is a bi-monthly newsletter of Retail Lab, the Retail committee of KJ Somaiya Institute of Management Studies & Research, Mumbai. Images used in Retail Chronicles are subject to copyright.

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K J Somaiya Institute Of Management Studies & Research, Mumbai

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