Branded Wheat Flour Market

Branded Wheat Flour Market in India India is one of the world's largest food producers, yet branded foods account for an in-consequential proportion. Among the various food industry segments, the largest segment is the branded wheat flour market. The Packaged Wheat Flour Market in India has started breaking the old age traditions of grinding wheat at local Chakki mills by growing at a compounded annual growth rate (CAGR) of 19% and is likely to be double the current size by the end of this decade. The Ministry of Food Processing Industry implies that the estimates of the industry's size vary, but it is generally put at around Rs. 8,000 crores for the financial year 2015-16. The packaged atta brands are presently competing on several platforms, the chief one being the health including child growth, digestion, heart care, energy, general health and weight control. Inspite of this strategy, volume, affordability and proper distribution network still continues to be the chief sales driving factors. The wheat flour market is largely dominated by local chakki mills in India; however the branded packaged wheat flour segment is emerging rapidly in the country by offering better quality, nutrition and convenience. Considering the industry's size and low brand penetration, international giants have set their sights on the nascent Indian market for branded wheat products - biscuits, breads, packaged atta and innovations such as chappatis. The Indian packaged wheat flour market comprises few national players and large number of regional and private label brands operating at pan India or restricted geographic market based on their size and capacity. The urban market dominates packaged wheat flour market in India. As per IKON’s estimate, urban market occupies more than 90% of the total market where as due to penetration of packaged food in rural India, rural consumer’s willingness towards the packaged wheat flour has been found to have somewhat increased. As a result, the marketing system and its efficiency are serious concerns as well as interest factors in India. Poor efficiency in marketing has serious consequences for both producers and consumers as well as for the government budgets and the economy. Serious questions have been raised about the working of the market mechanisms and market related policies for wheat and rice. Indian packaged wheat flour market to touch Rs 15,500 crore by 2019-20

The current market trends The annual per capita consumption of packaged wheat flour in India remained nearly 1.85 kg, during fiscal 2014-15. However, the urban market leads in per capita consumption of packaged wheat flour with almost 5.50 kg, making packaged wheat flour an urban phenomenon. With the entry of large number of market players having better quality, fresh and convenience-packaged flour; the wheat flour consumption trends have been shifting towards the branded packaged atta. The Indian packaged wheat flour market consist of plenty of brands each one is trying to distinguish themselves with origin of wheat, manufacturing process, quality, taste, textures and price to attract customers. The rigorous advertising in print and visual media campaigning on quality, hygiene, health, convenience factors by the players are helping to heighten the sales of packaged wheat flour in the country. Besides leading brands, there are more than 500 regional brands in India. Each flourmill has its own brand, sometimes even more than 2 brands of packaged wheat flour.

Marketing Strategy for major wheat Flour Brand ITC’s Aashirvaad: ITC is one of India’s biggest and best-known private sector companies. In fact it is one of the World’s most high profile consumer operations. ITC launched Aashirvaad on 27th May 2002 in Jaipur and Chandigarh. Within 8 years after launching Aashirvaad Atta, it has become number one in branded packaged Atta sector across the country with a whopping market share of 55%. The focus is kept on providing the best quality Atta. Happiness handpicked is the motto of Aashirvaad Atta and to achieve this, ITC buys wheat straight from the farmers using the sourcing strength of its e-Choupals. Aashirvaad Atta can be considered as a premium priced product, as it is very costly when compared to unpackaged Atta sector. Currently, the focus of ITC is on urban market with respect to packaged Atta sector and with packaged Atta sector still being less than 3% of the total Atta market; ITC can focus on rural market also to capture more of the unpackaged Atta market. ITC has focused more on the retail shop based promotion strategy. However, to attract more and more customers, ITC needs to promote it more using TV and other media promotion strategies.ITC can collaborate with fast food chains such as McDonalds, Pizza Hut and Subway. This has been an untapped market until now and tying up with these chains as their main flour supplier can open up a new window for ITC. The only downside with Aashirvaad is that it is considered as a premium priced product and is actually very costly when looking at the unpackaged Atta sector.

Patanjali: Patanjali is being marketed as “the most trusted and popular across the country and making its presence in the world due to its purity”. Patanjali chakki crisp atta is said to contain the three sections of entire wheat grain to provide the wholesome food simply the way nature intended it to be which has regular supplements that are critical for developing kids & grown-ups. It also markets that “The Rotis made from Patanjali have a unique taste of their own and is processed and hygienically packed under stringent quality control’. Patanjali Atta has in recent years seen vast marketing campaign riding along with the other organic products under the same brand name. It has come up quickly to capture an almost 15% share in the packaged wheat flour industry in the urban areas with the overall average yet to appear in reports.

Shakti Bhog:

From a small-time grinding mill in the 1980s to a Rs 200-crore packaged food empire, Shakti Bhog currently captures around 20% of the market share in the country. It has different packaging and marketing strategies in place according to the different geographical areas in the country and according to the varying per capita consumption of various cities, e.g. Delhi is predominantly a 10 kg pack market, Bihar and eastern UP have been marked as 5-kg markets, while south India and Bombay are one and two kg pack markets. The company is also supplying 20 kg and 50 kg packs, which qualify as loose atta, to hotels, restaurants and tourist houses. A major chunk of Shakti Bhog’s current business is targeting the Indian nationals living in other countries and it markets its products as Chakki Atta. This marketing strategy has been very successful as the other countries do not have a very developed concept of local-chakki atta.

Pillsbury: Pillsbury is a global food brand that is trying to replicate its success in Indian market. The brand was launched in India in 1998 as a result of a joint venture between Godrej and Selviac Nederland BV (Pillsbury). Pillsbury has a rich heritage dating back to 1869. It started as a flour milling company named A Pillsbury and is now one of the largest brands in the food products market in the world. In 2002, the company was taken over by General Mills. Using the innovative differentiation and positioning, Pillsbury is having a market share of about 8% in the branded Atta market. However it is now losing ground steadily to Aashirvaad and Shakti Bhog and will need to develop new marketing strategies if it wants to maintain its hold in the market.

Annapurna: Launched nationally in 1998, Annapurna Atta was aimed at helping the homemakers provide wholesome and tasty nutrition to their family. After its successful launch, in a pursuit to stay ahead and cater to the changing mindsets of the Indian consumer, Annapurna Atta was fortified with the branding of extra iron and vitamins, which are essential for children during their formative years. Annapurna atta continues to promise soft tasty rotis as it is made from the choicest of grains, brought fresh from the farms, cleaned three times and packed in the most hygienic conditions. The current market share of Annapurna atta is about 5%. The other brands combined together have about 10-12% market share of the packaged wheat flour industry.

Our Survey We ran a survey on 100 random people throughout the country’s urban cities and tried to observe the psych of the consumers regarding the packaged wheat flour industry. Some of the points which we observed from our survey are: 1) The first trend involved was that about 88% of the survey takers voted that their household consumption was below 15kgs per month which leads to the assumption that most of the families are nuclear, and have up to 4 members in each household. 2) 60% people were moderately affected by the pricing, 28% were concerned about the pricing and the remaining 12% were the least affected by the prices of the goods. 3) The quality of the product remained the major concern with about 84% people stating that it is the factor which helps them in making their final decision. 4) The packaging size rarely mattered, with only about 15% people considering it to be a serious decision making factor. 5) Taste was another major factor with about 80% people voicing their opinion about it being the second factor they considered while making their decision. 6) The opinion of the survey takers was fairly divided when asked about their views on the ingredients in the product they buy, its nutritional value and whether it is a major factor in their decision, with about 30-35% votes in each of “Yes”, “No” and “Sometimes”. 7) 83% people say that they have tried other brands of wheat flour and the overall satisfaction with their brands was a whopping 96%. 8) Also observed was that the advertisements changed the perceptions of about 37% and made them move to an alternative brand. Seeing this as glass half full, there is still a large market yet to be covered in the terms of advertising. 9) The market share of our survey matched with the CAGR report up to a ±2 %. With Aashirvaad at 53%, Patanjali gaining ground with 13%, Shakti Bhog down to 6%, Pilsbury at 3% and chakki and other smaller brands at about 24%. 10) The survey data showcases that about one-third people are loyal to the brand completely and would rarely consider changing the brand.

1 being the least affective 5 being the most

The Major challenges The growing numbers of working women and their inclination towards convenient food products; will enhance the future demands of packaged wheat flour in India. According to the market estimates, if the growth trajectory remains the same, the market of packaged wheat flour may likely to be more than double the current size by the end of current decade. The marketers need to come up with new and innovative product packaging and product proposition for differentiating themselves and for sustainable long-term growth. It is also expected that the consumers would eventually give more importance to origin of ingredients and related convenience factors in case of packaged wheat flour. ITC’s ‘Aashirvaad’ is the clear market leader among the national players in branded packaged wheat flour market in India with occupying more than 50% market share where as several regional brands (produced by flourmills serving region-specific market) together occupy major 40% share of market. These figures go higher

for packaged atta brands in the urban areas compared to the rural areas. Up and coming home-brand of Patanjali under Baba Ramdev’s large range of organic products is posed as the biggest growing brand at the moment. Urban consumers belonging to upper and upper middle class dominate the consumption of packaged wheat flour in India; among which working couples, young single living, nuclear families, and health-conscious consume highest packaged wheat flour in India. The various underlying factors driving the consumers for purchase of packaged wheat flour are fulfillment of basic nutrition needs; convenience and saving of time; deficiency in storage of wheat in bulk; and perception of high quality of packaged wheat flour. More than 70%, particularly health and quality-conscious consumers, prefer to buy specific brands of packaged wheat flour showing brand loyalty. Due to varied geographical taste preferences and beliefs, satisfying Indian consumer with standard offerings remains the biggest challenge for marketers and so is the case with packaged wheat flour.