Nutrela Distribution Channel Analysis

INTRODUCTION  This project is carried out to understand diferent aspects o a distribution channel. For this we selected a certain company and two products under the same group. The selected company is Ruchi Soya and the brand is Nutrela. We are currently discussing about two products under the brand – Nutrela soya chuns and Nutrela oil.

ABOUT THE COMPANY  COMPANY  Ruchi Soya !ndustries is a part o the Ruchi "roup o !ndustries. # F$%" company& Ruchi Soya is one o the leading producers o 'anaspati& soya oods& edible oils and baery ats in !ndia and is also the biggest e(porter o  soya meal rom !ndia. !t is also the highest e(porter o soya meal& lecithin and other ood ingredients rom !ndia. !t has become one o the leading comp compani anies es in the the coun countr try y on the the basi basis s o its its stri strict ct stan standar dards ds o )ual )ualit ity y control& continual inno'ation and in'ention& and superior trading sills. Social initiati'es o Ruchi Soya with a ocus on healthcare& education and women*s empowerment& help in creating sustainable 'alue or society as well as the organisation.

!t has a 'ery wide and e(tensi'e distribution networ that comprises o'er + lah retail stores& o'er ,-- company depots& and around &--- distributors. Ruchi uchi Soya Soya has has atte attemp mpte ted d open opened ed new new mar maret ets s with with its its emph emphasi asis s on pro'iding 'alue goods to consumers in popular and premium range. !t has a strong base in modern retail and prestigious hotel chains.

MAJOR BRANDS UNDER RUCHI SOYA •

Nutrela

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Ruchi "old

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Sunrich sun/ower oil

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$ahaosh

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Soyumm

PRODUCT PORTFOLIO OF RUCHI SOYA Nutrela has instant soya& ready to coo soya mi(es& re0ned oils and table spread under its brand oferings. The edible oil range holds a number o  brands including $ahaosh& which is an umbrella brand containing Soyabean oil& %ottonseed oil& "roundnut oil1 Ruchi "old 2almolein and Ruchi "old $ustard oil3 Nutrela oils& namely Nutrela Soyabean oil& Nutrela $ustrad oil& Nutrela Sun/ower oil& Nutrela "roundnut oil and Nutrela Rice 4ran oil3 and Sunrich sun/ower oil. Sunrich is a healthier& lighter and clearer super re0ned

sun/ower oil brand. Ruchi No , is a leading edible oil and 5anaspati brand. Ruchi "old and Ruchi Star are mass edible oil brands. The two 'anaspati brands& Nutrigold and Ruchi No. , are regional leaders in their respecti'e categories. !t also manuactures the soap brand Ruchi No. ,& a'ailable in our 'ariants.

MANUFACTURING CAPABILITIES 4usiness 7ilseed

5erticals %apacities

per

year 6ocations

8(traction 9.+: million metric ton

8dible oil Re0ning

,-

9.-; million metric ton

,9

2alm Fruit 2rocessing -.9 million metric ton

: +

Fats Soya meal %apacities 9.-> million metric ton

,-

Wind

2ower ?>.9

$W ,,

"eneration

SWOT ANALYSIS OF RUCHI SOYA Strength

•

!ndia*s largest manuacturer o edible oil

•

Superior procurement&

trading

sills and

tough

)uality control standards •

%ontinuous efort to meet consumer needs

•

Wide and e(tensi'e distribution networ

•

First e(porter o Soya bean meal to South 8ast and

$iddle 8ast •

%rushing capacity o about ; million tons annually in ,; plants& e(tend o'er ,, locations

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Ready@to@eat products on the Nutrela brand

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No control on raw material prices as product is agro based

Weakness

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%omparati'ely less brand awareness

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8(pansion into premium segments and global marets

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 Tie@ up with restaurants and hotels

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Strong industry portolio

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Aigh growth prospects in the edible oil industry

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%ontrol o'er the price /uctuations

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Ruchi Soya has recently teamed up with Bapanese multinational

Cagome

and

$itsui

to

enter

processed tomato business in !ndia. •

 Boint 'enture with B@7il $ills and Toyota Tsusho %orporation to launch products lie unctional healthy cooing oils in !ndia.

•

 Boint 'enture with a %anadian Research company to ofer high yielding soya seed 'arieties in !ndia

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O!rt"n#t$ Threats

New initiati'es lie palm plantation and renewable energy sources

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Food maret rules and regulations

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8ntry o more domestic and international players

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Foreign incidents liely to impact the sun/ower oil

maret •

Rupee depreciation against oreign currencies has a negati'e impact on the oil import trading

COMPETITION •

C S 8 6td.

•

#gro Tech Foods

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5imal 7il = Foods 6td.

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5ijay Sol'e( 6td.

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#nil $odi 7il !ndustries 6td.

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"ujarat #mbuja 8(ports 6td.

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 Tirupati !ndustries D!ndiaE 6td.

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"oul Reoils

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Sanwaria #gro

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Ruchinra

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#ni !ndustries

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Rasoya protein

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Raj 7il $ills

•

#5T Natural 2roducts 6td.

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Natraj 2roteins 6td.

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!ndian 8(tractions 6td.

NUTRELA Nutrela was launched by Ruchi Soya !ndustries. Ruchi is the maret leader in the soya ood segment with the Nutrela* brand ha'ing more than a >percent maret share. The company was initially interested in soya oil e(traction with soya meal as a by@product. The company identi0ed soya meal as a protein rich ood at low cost in !ndia.

PRODUCTS N"tre%a s!$a &h"nks' gran"%es an( )#n# &h#nks Nutrela& one o the most trusted& ,-- G 'egetarian Soya ood brand in the country& ofers Soya granules& chuns and mini chuns& which are ull o  nutrition and are also easy to prepare. Nutrela has enjoyed the trust o its consumers& both in !ndia and o'erseas& or more than :> years and continues to e(pand its range to gi'e more oferings to the consumers.

N"tre%a )"star( !#% !t is made rom the 0rst press o 0nest )uality o mustard seeds. %ontaining 7mega@9 and 7mega@ it pro'ides health bene0ts lie& Aelps a'oid %oronary Aeart Hiseases& Aelps Higestion and 4lood %irculation& !mpro'es !mmune System.

N"tre%a s!$a*ean !#% !t is the number one low absorption re0ned Soyabean 7il in !ndia. !t also contains natural plant sterols that helps in reducing cholesterol. !t lasts > times more than regular Soyabean 7il and is enriched with 5itamins #& H = 8. Food cooed with Nutrela Soyabean 7il is :>G less oily. !t gi'es health bene0ts lie& Aealthy or Aeart& 6ow absorption will lead to lower oil !ntae. 6ow #bsorb Soyabean 7il is a'ailable in1 >-- ml pouch& ,6 bottle& ,6 pouch& > 6 Bar& ,> 6 Bar. Aealth 4ene0ts pro'ided are1 up to :>G 6ighter& less 7il per ser'ing.

N"tre%a s"n+!,er !#% !t is the number one low absorption re0ned Sun/ower 7il in the country& and is enriched with 5itamins #& H = 8. !t lasts 9 times more than regular Sun/ower 7il and is :>G less oily when ood is cooed in it. Aealth bene0ts it produces are1 Ip to :>G 6ow #bsorption& Ip to :>G 6ighter& 6ess 7il per Ser'ing& %ontains 2lant Sterols that Reduce %holesterol. 6ow #bsorb

Sun/ower 7il is a'ailable in1 >-- ml pouch& ,6 bottle& ,6 pouch& >6 Bar& ,> 6  Bar.

PROJECT OBJECTI-E  To study the efecti'eness o distribution channel o Nutrela products Dsoya chins and oilE in $anipal and Idupi region

SCOPE AND LIMITATIONS 7ur research is limited to the distribution channel o Nutrela 7il and Soya %huns in $anipal and Idupi region.

METHODOLOGY   The research wor is being carried out in three phases. The same are described below.

Phase . Secondary research1 6iterature Re'iew& personal inter'iew. 7ther inormation was collected rom the websites and news@papers.

Phase / 2rimary research1 •

Hesign a )uestionnaire rom the parameters collected through secondary research.

•

Hiscussion with distributors o Nutrela products and retailers through a structured )uestionnaire.

Phase 01 #nalysis o the 0ndings and recommendations.

D#s&"ss#!n str"&t"re •

%onduct an inter'iew with the local retailers in $anipal JIdupi region.

!n depth inter'iew with the distributors o Nutrela products in $anipalJIdupi.

Meet#ng1 %ollected data regarding the distributor*s pro0le& distribution terms and policies& distribution processes. Further inter'iews to collect data regarding the ollowing1 Re'enue& %ost structure D7pe(E& cape(& woring capital and channel R7!& redistribution resources and manpower& number o outlets co'eredJbeatsJre)uency o ser'icing. #ny current problems aced by distributor and any scope or impro'ements were also recorded through the inter'iews.

INDIAN NUTRELA MAR2ET O-ER-IEW Ruchi Soya has entered the ready@to@coo DRT%E category under its /agship brand Nutrela. The new products launched would include Nutrela !nstant Soya and Nutrela Ready $i(es. !t is planning a ,-G maret share in this segment by :-,-- cases amount to :> tonne o oil. #round >-- cases out o the total :>-- cases oil are or mustard oil. Sun/ower oil is the most sold product whereas the demand or mustard oil is comparati'ely less in Idupi and $anipal region .!t sells more in eastern part o !ndia. 8ach case consists o around ,: bo(es. So the total SCI o oil sold is 9-&--whereas the total SCI o soya product sold is around +:- bo(es per month. $ost selling product is , litre pouch in edible oil segment. :-- gm. and ,-&--- retail

•

outlets #ll re0ning plants located near ports& pro'iding easier access to imported edible oil  ν Histribution through pipes at ports sa'es transport cost and time. $angalore is one such location which has access to port and hence there is a manuacturing acility or 'anaspati& soya product and re0ning o oil here.

Aence the distributor re)uires one day booing by the retail storesJwholesalers which are located urban& semi urban depending on their order siKe. ! the retail outletJwholesalers mae a onetime bill o Rs. >--then the distributor deli'ers to them the ne(t day ater maing the order. #lso these outlets need to be present in urban or semi urban area. For outlets located in rural areas order is deli'ered a wee ater the order is made .! the order siKe is small enough to be deli'ered in a bie &then they deli'er to the outlets located in rural areas in :@9 days.  The stocs despatched is /e(ible as there is no 0(ed time or the )uantity and depends in the retailers. 7il maret is a daily maret and it /uctuates by Rs. , or Rs. : on a daily basis. So the distributor 'isits all major outlets once a wee to collect any order or collect payments. So& the retailer is charged the price or that particular day and hence the rate o oil 'aries on e'ery order whereas the soya chuns rate remains almost 0(ed.  The distributor 'isits retail outlets in rural areas once a month& to inorm him about the latest oil price and also to collect any orders.

Pr!("&t )arg#n an( t"rn!8er1 7n an a'erage& the distributor maes a margin o >G and the Retailer margin is ,- G on oil products. !n soya products retailers maes a margin o ,>G. !n

a month around ,? tonne o sun/ower oil is distributed by him towards retailers and wholesalers. This amounts to around ,?-- cases. $ustard oil is > tonne& i.e.& >-- cases and soya products is : tonnes.

 r!("&t &ases s!%( sun/ower oil

mustard oil

other oil products

57 /97

6/7

Financial and other Support rom Ruchi Soya !ndustries1  The company sometimes ofers promotional acti'ity to push their products. !  a distributor placed an order or >-- cases& then :> cases will be pro'ided or ree. The distributor can then pass on this incenti'e to his retailers depending upon the order they place with the distributor. #lso the distributor is charged daily rate or the oil products& and sometimes there is a certain percentage o discount ofered when distributor places an order or bul pro0t. 7il products sell more during summer season and there is a minute decrease in the demand or oil products during winter. Aence it is a 'ery seasonal product. #lso& the demand or diferent oil product 'aries across all the states with eastern region ha'ing a much higher demand or mustard oil in eastern

!ndia such as west 4engal& 7rissa than in southern !ndian states. Aence the demand or mustard oil in Idupi district is low.

$aret operation  The maret operation o a distributor enlists all the unctions that he has to perorm as a part o his duties and responsibilities. !n the case o our product the distribution channel is as ollows1 @ First the company eeps the goods in its warehouse rom where the product is taen by the distributor to supply it to the retailers and wholesalers. Nutrela doesn*t has any stocist or super stocist deployed or its distribution. While ha'ing a personal inter'iew with the distributor o nutrela& ollowing aspects o maret operation carried out by him were noted down.

,. 7rder booing or ready stoc  The distributor boos the order gi'en by retailer and supplies the good on a weely basis. !n urban area& order booing by the retailer has to be done one prior to the deli'ery date whereas in rural areas retailers need to boo : or 9 days in ad'ance or an on@time deli'ery. !n both regions i the )uantity demanded is less& then the distribution is carried on a two wheeler otherwise a car is deployed. This is done to ensure cost efecti'eness. :. Number o retailers by outlet typeJclassi0cation %urrently the distributor ser'es to only retailers and wholesellers. The total number is around ;>- retailers and wholesellers. They do not supply to the institutions as o now. 9. !ndicati'e sales dispersion across diferent outlet typeJclass Histributors most o the sales comes rom supplying the goods to the retailers. From retailers alone the sales is around +- – ?-G while remaining coming rom the wholesellers. ;. $aret co'erage ser'icing re)uency and process – bacward rom warehouse and orward to retailers  The distributor co'ers the wide@ranging area rom Cota to Idupi – $anipal region co'ering around 9- Cms in the state. Histributor supplies once a wee to its customers. The process ollowed by him is that 0rst the company eeps the goods in its warehouse rom where the product is taen by the distributor to supply it to the retailers and wholesalers.

Market (e8e%!)ent $aret de'elopment are the acti'ities carried out by both the retailers and the distributors in order to push the products into the maret. This is also done by

pro'iding certain schemesJincenti'es or ofers by the company itsel to maintain good woring terms with the distributor. %urrently i the product is near e(piry Di.e. , monthE then company taes bac the product without any charge to retailers. ! more than : 9 months then they push the retailers to sell the products& i the product still remains then they tae it bac when it nears e(piry. #lso at times the company ofers promotions lie pro'iding ree :> cases to the retailers on the order amount o more than :::::::::::: &ases . No e'ents or programs are being conducted as o now both rom the company*s side as well as rom the retailer*s side.

C"st!)er seg)ents  The distributor is in'ol'ed in 4:4 Sales. Ais monthly target is ,? ton D,?-- casesE or sun/ower oil and : ton or soya chuns. 8ach case has ,: bo(es. %urrently the sales dispersion o the two products is as ollows1@ ,. Sun/ower oil – :- lahsJmonth :. Soya chuns – 9 lahsJmonth %urrently ollowing are the diferent SCIs supplies by the distributor. 9. Sun/ower 7il @ !n measures o > litter& , litter and ,J: litter. #mong these , litter pacage sells the most. ;. Soya products – !n measures o , g& >-- gm& :-- gm and