The Rs 500-crore breakfast cereal market in India will soon see a new entrant in Marico, the fast moving consumer goods company. It will prototype an oats’ meal product under its Saffola brand.
The product, called Saffola Oats, has been soft-launched in about 12 cities, say sources. When asked, Saugata Gupta, chief executive officer, consumer products division, confirmed the test runs. He declined to give details, saying this would be on for at least six months. “It has to meet action standards,” he says.
Marico is said to be banking on the south, where the market for oats is considered to be strong. “People there have been consuming oats for long,” says Purnendu Kumar, associate vice-president, Technopak Advisors.
Even then, as a category within breakfast cereals, oats is small at Rs 120 crore. It is growing at a steady clip, however, at 25 per cent yearly, say analysts. Those in the space include PepsiCo’s Quaker Oats and India-based players such as Bagrry’s, visible in most organised retail stores across key cities. Those like Bagrry’s have, however, not restricted themselves to oats alone, foraying into segments such as muesli and bran, too. The bulk of the breakfast cereal market, say analysts, is made of cornflakes, a Rs 400-crore segment, growing at a healthy 20 per cent yearly.
Kellogg’s is the dominant player in corn flakes, with an over 70 per cent share. There are regional players such as Mohan Meakin, with its Mohan brand in the north, and private retailers such as the Future Group with its Tasty Treat cornflakes. It is Kellogg’s which has been credited with creating the cornflake category in India over 10 years earlier.
Kellogg’s began by targeting its products mainly at children. However, breakfast cereals today, and corn flakes, in particular, has evolved into a healthy eating option for the entire family. Even oats and muesli have a similar positioning in the marketplace, which Marico is looking to capitalise, say persons in the know.
Gupta of Marico, in an earlier interview with Business Standard, said the company was experimenting with healthy and functional foods under the Saffola brand name. Already, the Rs 400-crore Saffola brand, primarily a cooking oil positioned on the healthy heart platform, has been extended to low-sodium salt, an atta mix and to rice. The company also began prototyping a baked snack called Saffola Zest last year, now suspended.