Unilever’s biggest brand is still a small play in India. Will the latest product extensions work?
Knorr has just gone in for a new brand extension – soupy noodles. And the response from the southern markets came as a pleasant surprise to Unilever CEO Paul Polman who was in India last week. “I am told the demand has far outpaced our capability to produce,” Polman says.
Enthused by the response in markets such as Karnataka, Andhra Pradesh, Kerala and Tamil Nadu, Hindustan Unilever (HUL) will launch the product nationally over the next few days. This is not the first time that Knorr has gone in for such product extensions – from soups, it had earlier moved to meal makers and snacks. But HUL is banking heavily on soupy noodles.
“Knorr is essentially known as a soup brand and has a dominant share in that category with a wide assortment of flavors.We will now be actively developing the brand,” says Hindustan Unilever Category Head (foods) Sidharth Singh.
There’s one simple reason behind this: In Europe and South East Asian countries, Knorr is Unilever’s biggest brand with equal play in soups as well as cooking aids like seasonings and spices. But in India it is still a small brand. HUL wants to change that. Says Singh: “Knorr will be part of our strategy for a big play in the food business.”
This is Knorr’s second attempt at “developing the brand”. HUL had earlier decided to integrate its local brand Annapoorna with Knorr to create a new brand Knorr Annapoorna and began to move from soups to ketchups to spices and even salt – moves that failed miserably. Knorr had also tried to counter Maggi by launching Knorr break-time snack soup under the subbrand Soupy Snack. That also flopped.
A wiser HUL then went back to Knorr’s core strength and all extensions to spices and salt was terminated. The brand also focused on its upmarket clientele and decided to concentrate more on soups.
Singh says the company has a clear strategy in place this time. “Our task is market development given the low penetration,” he says. For that, the company is following a strict three pronged roadmap. “First we invest time and energy in product superiority,” he states. To that end, it has around seven chefs on board in Bangalore. All this while maintaining its health stance of not using excess salt, sodium and saturated fats, internally referred to as “baddies.” Not surprisingly, Knorr products have the logo of Choices Foundation, an international health board.
Equal importance is being given to consumer insights. The September 2009 repositioning of the Knorr brand was an offshoot of a research study that revealed that mothers were not very comfortable with giving their children a 7 pm snack, afraid that it could result in a loss of appetite for dinner — a meal vital for school-going children who often miss breakfast in the morning rush. Thus the company had to find a role for soup in the consumer’s palate by finding a relevant context in his life.
“We figured out at that particular hour only one person can be happy — either the mother or the child. And we wanted to convey the fact that this product makes both mother and child happy,” says Lowe Lintas Creative Director Arun Iyer.
Brand building covers HUL’s third strategy. To that end, the brand signed up actress Kajol who endorses both Knorr soups as well as Soupy Noodles. “Picking her was easy. She’s one of the few actresses who balances her family and career so perfectly, and that’s what we’re all about,” Singh says.
Some ad experts, however, say the latest brand extensions, though much better than the earlier ones, is a bit confusing given that the primary category of soups itself has not been fully developed as it has a very small presence.
Also, Knorr has tough competition from Nestle’s Maggi (the dominant market leader) and Capital Foods’ Ching’s. Just like Knorr, Nestle too has 12 variants in traditional soups under three categories: Home, Chef and Chinese.
Singh, however, isn’t losing sleep. The category has a low penetration and is now growing at a healthy clip of 20 per cent annually. So there is a huge room for growth.
