Gourmet food has moved into the snack food space: Vikram Agarwal

Interview with Director, Greendot Health Foods Limited

In the snacks segment, new launches and investments have followed a set pattern. This has led to the growth of me-too brands, Vikram Agarwal tells Sangeeta Tanwar

Nachos and tortilla chips are relatively unknown product categories - these are not seen as regular on-platter snacks. How did you go about building new product categories under the Cornitos brand?

The Indian snacks market continues to be dominated by chips, extruded snacks and traditional sweets and salted savoury snacks. Another key emerging category is gourmet food (snacks) which is fast gaining acceptance with more and more Indians travelling overseas and getting exposed to new products and flavours. International gourmet snacks have been widely available at supermarkets and modern trade. The snacking category back home did not have any major Indian healthy snacks brand. We saw this gap as an opportunity and hence launched Cornitos as a healthy and premium snacking brand seven years ago.
 

Unlike other markets such as the United States and Mexico, where products such as nachos and tortilla chips are independent product categories in themselves, establishing these as strong product categories in India had their own share of challenges. Initially, we faced difficulties in gaining wide consumer acceptance for these products. Our products at times have even been equated with papad. A strong consumer-focused approach has helped us create awareness around these products. Consumer preference and choices are changing slowly. This is evident from the fact that earlier Cornitos' products were displayed alongside international gourmet products by modern trade channels such as EazyDay and Spencer's. Now this has changed, and our products are displayed alongside domestic chips and other snack products. This clearly shows that gourmet food has moved into the domestic snack food category and there is growing acceptance for new and innovative products.

India's snack food market is dominated by brands such as Frito-Lay and Haldiram that have a huge distribution footprint. How do you hope to compete with them on the distribution and marketing front?

We have been selective in our approach in giving our product to the right distributors ensuring that it is put into the right places. For this we assessed the markets where premium and international gourmet products were already available. We did not go for mass distribution, instead we reached out to a small number of distributors who were already handling premium and niche products.

Initially, we launched in Delhi, Chandigarh, Mumbai, Bengaluru, Chennai and Kolkata. Over the years, we have expanded to Tier-I and Tier-II towns. Currently, we are available across 300 cities with 30,000-plus retailers. Also, to create awareness around the product, we undertook a lot of sampling at schools, modern trade stores and general trade ensuring that the product was being tasted by consumers. We also launched more flavours with the aim to cater to the maximum number of people. We are big on product innovation - our offerings have less oil and have a shelf life of six months as against the industry average of four months. A longer shelf-life helps retailers to avoid issues related to expiry of products.

Haldiram, besides a number of regional brands, is available in small packs with a starting price of Rs 5. In comparison, Cornitos is a premium product. Does your pricing strategy put you on the back foot?

In the snacks segment, new launches and investments have followed a set pattern - there is a tendency to follow leader brands. This has led to the growth of me-too brands.

I believe in following the blue ocean strategy, which involves putting a differentiator brand or idea in place and creating more value for the consumers. While launching Cornitos, the focus has been on entering an uncontested space where competitors were yet to step in, reduce our entry costs and getting better value. Even as I decided to give consumers a differentiated and value product, I decided against offering low price - Rs 5 and Rs 10 - products. International nachos and tortilla chips brands in the market are anyway available for a premium, so our products, though available at a price higher than domestic snack food brands, still turns out to be competitive and has been well-accepted by consumers.