AgroTech Foods, a unit of ConAgra Foods, which makes cooking oil brand 'Sundrop' and popcorn brand 'ACT II', is planning to launch value-added food products next fiscal to build on the 'healthy' food concept and grow its business.
Simultaneously, the company plans to introduce discount offers on its existing brands to pass on the benefit of decreasing raw material prices to consumers.
The company is also entering the exports market for its branded foods and expects, building on ‘health’ concepts for its products will help boost sales.
According to Sachin Gopal, president and CEO of the company, "We see opportunities in the foods business. Our branded foods business grew by Rs 20 crore during the quarter ended December 31, 2008 over the previous quarter." "So far, we have been concentrating mainly on domestic consumption. Now, we are also looking at exporting our products. We plan to enter Sri Lanka and other neighbouring countries with our brands," Gopal said.
"After the drop in raw material prices, we did not reduce our prices, but are offering 10 per cent extra on all Sundrop packs for the same price," Gopal added.
Among new products, the company is currently test marketing hot chocolate mix and shelf stable pudding in Hyderabad.
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This will be rolled out nationally after successful trial runs.
The company has forayed into the Rs 500-crore bread spread market with the launch of Sundrop peanut butter.
"Our largest selling product is Sundrop and therefore we intend to launch several brand extensions under this, again building on healthy foods concept. Increasingly, consumers are seeking healthier and tastier alternatives to butter, margarine and jams. This has prompted us to think about launching more value-added products. Our entry in the cholesterol-free bread spreads segment is a natural brand extension," Gopal said.
The company is eyeing about 10 per cent of this market over the next year.
The company has reportedly invested Rs 23 crore in 2008-2009, and will continue similar investment in the next financial year. Sundrop is the largest brand in the premium segment of the refined oil consumer packs market. According to industry estimates, the snack food market in India is estimated at $3 billion. The organised snack sector accounts for almost half the market share and is expanding at a rate of up to 20 per cent per annum. Imports, though growing quickly, are still marginal at just $30 million per annum due to high import duties, a complex distribution network and availability of cheaper domestic products. The branded and organised snack food sector is forecast to grow at 15- 20 per cent.