Nuggets of brand wisdom

STRATEGY SPEAK

In the fifth in our series on lessons entrepreneurs learn, Ruchi Soya Industries Managing Director Dinesh Shahra explains how Nutrela became the generic for soya in India.

When Ruchi Soya Industries Limited (RSIL) set up in business in the 1970s, its focus was on oil extraction from soya beans. Soya meal was just a by-product.

Then, a decade later, the company decided to try and market soya meal as a high-protein add-on to vegetables or meat "" and Nutrela was born.

Now Nutrela has become the generic for textured soya protein (TSP) in India. But in the 24 years since Nutrela's launch, RSIL Managing Director Dinesh Shahra picked up some lessons that could prove valuable to anyone in the foods business.

Perhaps the most worthy one is the old saw: if it ain't broke, don't fix it. Tinkering with a successful product doesn't always yield the desired results.

Having experimented with Nutrela in the past "" not always successfully "" Shahra is now extending the Rs 120-crore brand into the snacks segment where it will compete against well-entrenched categories such as instant noodles. And Nutrela is also moving into a category where the action began "" oils.

In conversation with Gouri Shukla and Prasad Sangameshwaran, Shahra recounts how brand Nutrela was built up and how it will add muscle in the future. Excerpts:

When RSIL entered the Indian market for soya beans in 1969-70, the total soya crop in the country was around 50,000 tonnes a year. At present, the crop is 7 million tonnes.

We were among the first to set up a crushing plant for soya bean in 1972. Soya bean is put through a solid extraction process, which yields oil as well as meal. In its raw form the meal can be used as animal feed, but with superior processing it is suitable for human consumption.

For close to a decade after we started production, we used to export the meal as animal feed. Then, in 1979-80, we decided to venture into the production of TSP.

We spent Rs 5 crore on importing the TSP process from the US, which was a significant sum of money in those days. There was a risk, of course, in our venture. But we consoled ourselves that in any case there was a huge export market for TSP if the product failed in India.

Besides, we believed there was immense potential for high-protein, low cost food in this country. Nutritional levels in India are extremely low and most people are vegetarian.

Protein-rich vegetarian foods like almonds are not affordable; on the other hand, soya is a rich source of protein. So we felt we could make it work. Our message was nutrition, so we chose the name Nutrela.

Our initial communication centred on proving that Nutrela was economical, even compared to malted food drinks (MFDs). The choice of comparison was deliberate: our targets were children and housewives and our competition, therefore, was every category that spoke to these consumer groups.

Even our packaging resembled MFD cartons. Also, we wanted to show that much like MFDs, soya could become part of the daily diet if it was added to vegetables.

We launched first in Madhya Pradesh and Uttar Pradesh since our production unit is located in Indore in Madhya Pradesh. Also, we believed that it would be easier to sell the concept of soya chunks in these regions since there was a high awareness of soyabean here.

But we were surprised to find that the product found its way to Punjab and West Bengal, even before we launched in those states.

We hadn't expected such an easy acceptance of soya chunks in the north and east markets. We conducted a dipstick survey to study the trends in these markets, and the results were interesting.

Our target audience was supposed to be the vegetarian consumer who could use the chunks as an extender to paneer or as a substitute to vegetables.

Nutrela would be particularly relevant in areas where vegetables were not grown or were not available for some periods of the year. Madhya Pradesh was one such market.

But our research indicated that it was the non-vegetarians who were buying the product since soya chunks are similar in texture to meat. Nutrela was proving a good substitute for meat, at one-fourth the cost.

It was also being used as an extender (add-on) in food. In markets like Kolkata, for instance, soya chunks were added to fish to increase the quantity of the dish.

Spread the word

To convey this message to a larger section of consumers we took on ad agency Everest in 1988-89 to create a television commercial. Compared to what other food companies were spending at the time, our spends (Rs 1.5 crore for the initial, year-long campaign) were huge.

But then, we were educating the consumer. The ads showed different ways of using soya chunks in Indian cooking; the product packs also carried detailed instructions.

Our communication on the product packs also compared the protein content in soya with other protein sources "" 1 kg of Nutrela has as much protein as 20 eggs or 10 kg of almonds and so on. That made an impact with consumers.

Another initiative that helped was the sampling exercises, where our representatives cooked dishes with soya chunks and consumers were offered a taste.

This was particularly important from the vegetarian customers' point of view "" there was scepticism among vegetarians about Nutrela because soya chunks were similar to meat in look and feel. So we were compelled to conduct demos. The demos that took place in SEC A and B1 cities helped in tackling taste apprehensions.

Our learning here was that give the consumers what they want, not what you want them to have. For instance, in the US, soya milk is the most popular but in India we had found that people did not want a subsitute for milk.

Instead, Chinese cuisine, which was gaining popularity at that time, proved a good entry point. And soya is a key ingredient in Chinese cuisine. We outsourced a field force to conduct demonstrations and cookery classes and hired a Chinese chef to train local chefs. That proved so successful that we continue the practice even today.

Interaction with customers was vital for the growth of Nutrela as a brand. We constantly sought ways of reaching out to our customers.

We introduced free recipe booklets, customised to regional cuisines to teach people how soya could enhance and be used in their day-to-day food. We also encouraged consumers to write in their own recipes.

We organised events like the Cookery Queen contests in the late-1980s and early-1990s. Now, when more younger women are logging on to websites to get new recipes, we have launched our website as well where we offer recipes and health-related information.

Lend 'em your ears

Market research has been crucial in our decisions regarding variants of Nutrela. Our feedback showed that customers wanted smaller soya chunks to add to peas or channa dishes. So, in the mid-1980s we launched Nutrela granules and mini-chunks.

In the West, granules are mixed with sausages or added to gravies as a thickener. In India, too, granules proved popular as extenders to dals and gravy dishes, while the chunks were often used as substitutes for paneer cubes. The bestsellers, of course, are still the big chunks.

Similarly, when we learnt that customers did not find the TSP tasty on its own, we introduced flavoured soya chunks. But the tomato and spinach-flavoured Nutrela didn't take off because customers preferred to use fresh vegetables rather than pre-flavoured soya.

Also, there was a perception that tomato and spinach didn't go well with soya. We withdrew the product within a year of its launch, especially because it was also making our production more complex and tedious.

The biggest product decision that resulted from consumer insight was the launch of soya flour. During our cooking demonstrations in Kolkata, we noticed that housewives didn't throw away the water in which they cooked Nutrela.

(Soya chunks have to be boiled before they are added to food.) Instead, these women used that water to knead flour. They were ensuring that no protein was lost. And that made us think: why not launch a soya flour?

So in the mid-1980s we launched soya flour under the Proflo brand. We thought it would catch on, but it did not. But then, even branded wheat flour has not gained complete acceptance yet and atta is still a largely unorganised market.

The biggest problem with the Indian market is initiating any change in food habits. That's why we haven't launched soya flour in big packs at all "" apart from the 50 kg bags for export and institutional sales, the largest size is the 1 kg pack. Rather than changing age-old habits of wheat or maize atta, we encourage consumers to mix 100 or 50 grams of soya flour with any other flour to make it healthier.

Surprisingly, we get a lot of institutional sales from soya flour. A number of FMCG companies as well as restaurants use the flour for their products. Hence we feel the individual customer will accept it sooner or later.

That is why, two years ago, we relaunched Proflo and brought it under the Nutrela brand. It would have been too expensive for us to promote a new brand. As Proflo was not selling, we got it under the Nutrela umbrella.

While we were trying to increase the Nutrela portfolio, we considered various options. We toyed with the idea of coloured soya chunks like in the US market, where reddish-coloured chunks are sold that resemble meat.

But we decided against it because in any case, non-vegetarians used chunks as fillers in meat dishes. More importantly, we didn't want to confuse or put off our vegetarian audience.

We also thought of launching coloured mini chunks for kids, but again we ultimately decided against it. One reason was the less-than encouraging response we had already witnessed for the natural-flavour chunks.

Other options we've considered "" and discarded "" are of chunks that resemble paneer cubes, which could be a low-fat option to paneer, and tofu. But the tofu market in India is too niche.

The price of success

Success isn't without its own share of problems. Especially in West Bengal, the concept of soya chunks has worked so well, that there are at least 30 look-alike products called Nutella, Nutila and so on.

These counterfeit products are priced much lower but we cannot compete with them. We cannot cut prices because there is a 16 per cent excise duty on packaged soya.

Instead, we also sell 20-kg institutional packs of Nutrela "" many retailers buy this and sell it loose. Of course, that doesn't benefit us in any way.

To make consumers buy Nutrela packs, a couple of months ago we launched flavoured soya chunks "" but with a difference. Our inspiration came from products like Nestle's Maggi noodles, which comes with a separate tastemaker.

We decided to try something similar. The ready-to-cook soya dish is in granules form. Since granules absorb masala faster than the chunks, a tastier dish is available instantly.

We launched three flavours "" Chinese Manchurian, Korma Masala and Spicy Curry. We've begun by launching this brand extension in Kolkata. That's because Kolkata is one of the bigger soya markets "" 30-40 per cent of Nutrela food sales come from the city. We hope to replicate Maggi's success with Nutrela Flavor.

Our promotion efforts are centred on schools in the city. We have found that mothers in Kolkata generally do not return home after dropping their children to school.

Instead, they wait outside until the children are through with their classes. We plan to take advantage of this time and conduct cooking demos at schools for the mothers, while the school is in session.

We feel the market is opening up to ready-to-cook type of products. We took close to two years to research what flavours to introduce, test them and develop the taste maker. We roped in Research International and ACNielsen to do the research because taste varies from region to region.

We had to find out what flavours suit all palates on a broad parameter. It was only after that that we launched these pan-Indian, ready-to-cook soya dishes.

We are now in the process of launching region-centric flavours too. The challenge is in the south where soya is not accepted. We are in touch with nutritionists and health experts to promote acceptance by adding soya to the dough of chapatis or dosas or even mix it with upma.

Until recently, we had not introduced oils under the Nutrela brand simply because Nutrela stands for health, while oil is not perceived as healthy.

So there would have been a conflict. We contemplated for a long time on whether it would be right to extend into non-soya oils for the fear of diluting Nutrela's brand identity. But research indicated that in the consumer's mind, Nutrela did not stand for just soya, but for health.

So we decided to extend Nutrela into oils. We have recently launched healthy and fortified oil variants like sunflower and soya oil as Nutrela Healthy Oils. We did not launch these oils under the already existing oil brand Ruchi, was because Ruchi soya oil is our mass brand. Nutrela is the health brand.

Our emphasis on advertising and marketing remains unchanged. In the past six months, we have spent close to Rs 7 crore on promoting Nutrela Oils and Rs 1 crore on Nutrela Flavor.