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MARCH 2014 VOLUME 8 NUMBER 3 Rs 100 INDIA EDITION www.indiaretailing.com PROGRESSIVE VIEWS 18 Value Proposition in Dairy INTERFACE RETAILER 20 Spices India, Cochin PRODUCT WATCH 58 Spice Trail MERCHANDISING 64 Crossover Appeal EQUIPMENT & DESIGN 68 Sourcing Fixtures & Fittings Boosting sales, brand image, and consumer sentiment with in-store promos Page 28 MARKETING MANTRA
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MARCH 2014 VOLUME 8 NUMBER 3 Rs 100

INDIA EDITION

www.indiaretailing.com

PROGRESSIVE VIEWS • 18Value Proposition in Dairy

INTERFACE RETAILER • 20Spices India, Cochin

PRODUCT WATCH • 58Spice Trail

MERCHANDISING • 64Crossover Appeal

EQUIPMENT & DESIGN • 68Sourcing Fixtures & Fittings

Boosting sales, brand image, and consumer sentiment with in-store promos

Page 28

MARKETINGMANTRA

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4 • PROGRESSIVE GROCER • MARCH 2014 AHEAD OF WHAT’S NEXT www.imagesfood.com

MUMBAIWaseem Ahmad, Vice President & Branch HeadE: [email protected]: +91 9833628852

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Advertising

EDITOR’S NOTE

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Printed & published by S P Taneja on behalf of Images Multimedia Pvt. Ltd. Printed at Aarvee Printers Pvt. Ltd., B-235, Naraina Industrial Area, Phase –1, New Delhi 110028 and published by S P Taneja from S-21 Okhla Industrial Area Phase – 2, New Delhi.110020 Editor : Amitabh Taneja

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Amitabh TanejaEditor-in-Chief

MARCH 2014 • VOLUME 8 • NUMBER 3

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Bob Ingram, David Litwak, Tammy Mastroberte and Jennifer Strailey

President & CEO Harry Stagnito Chief Operating Officer Kollin Stagnito Vice President & CFO Kyle Stagnito Senior Vice President, Partner Ned Bardic Vice President/Custom Media Division Pierce Hollingsworth HR/Production Manager Anngail Norris Corporate Marketing Director Robert Kuwada Promotion and Marketing Manager Ashley Cristman Director, Conferences & eLearning Amy Walsh Manager, eMedia Strategy & Development Mehgan Recker Audience Development Director Cindy Cardinal

For brands, product launches and brand promotions within grocery stores are effective marketing tools that enable them to attract customers, and create brand recall. Grocery stores on their part can leverage their market positioning to become important points of communication.

Modern stores have signifi cant advantages in this respect: organised displays, signage, self-service, dedicated spaces for showcasing new products and for sampling them, and room for banners and POPs, means that brands are assured of creating the desired impact for their new launches.

In-store promos open a window of opportunities: they address visitors and convert their interest into sales. Brands get important customer feedback on their product, which, if positive, they could use to increase its distribution, or improve it, or take it off the shelves if the trial run fails to generate consumer interest. For grocers, it could mean allocating more or prime shelf space to products that are accepted well, or remove those that fail to garner consumer interest during the trial period.

In short, promos are important for brands in scaling up their brand equity, and for grocers in widening their customer base, and generating additional sales. For consumers, promotional schemes with their attendant free sampling and discounts, make shopping a fun experience.

However, brand/product promotions should be planned and executed well. There should be a focussed approach, whereby the products move fast. The store’s ambience should be clutter-free, and encourage sampling and enquiries from customers. Read about the successful promos undertaken by several brands at grocery stores in this issue’s cover story.

Making a Point

Business HeadRakesh Gambhir, Vice PresidentE: [email protected] M: +91 9910001375

www.indiaretailing.com

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COVER STORY

28 Marketing Mantra In-store promotions open up a basket of goodies for consumers in

the form of affordable price points or access to a diverse portfolio of products. At their end, both retailers and brands get visibility, build a clientele, scale up their brand equity, and generate sales

FEATURES

18 Progressive Views Healthier, seasonal, gourmet and convenience products can

bring additional sales to the dairy department20 Interface Dr. A Jayathilak, Chairman, Spices Board of India, elaborates

on the ideation behind their retail store24 Interface Dr. Aayushman Gupta, CEO, Best Foods Limited, shares

information about the brand26 Interface Nitin Seth, MD, G.D. Foods Manufacturing,

talks about their Tops and Royal Taste product range

PRODUCTS

38 Fresh Produce Restaurants and supermarkets are selling mushrooms like

never before40 Coffee Coffee is encouraging brands to launch exotic ranges44 Beverage Soda sales may be slipping, but noncarbonated offerings

still supply plenty of excitement46 Beef Getting more value out of beef48 Snacks Produce plays a leading role in America’s surging healthful

snack trend

Contents

M A R C H 2 0 1 4 • V O L U M E 8 • N U M B E R 3

NON-FOOD

52 Vitamins Vitamins and nutritional supplements can help boost a

store’s immunity to dips in wellness sales54 Shaving Bigger and better retail promotions needed to capture

POS purchases56 E-Cigarettes Retailers who invest in new tobacco segment await

the effect of regulations

PRODUCT WATCH

58 The Spice Trail The evolving Indian spice market has emerged as an

attractive avenue for investment

REGULARS

08 Market Update What’s new in the F&G market16 Industry Speak Emerging solutions offer real-time remote control 64 Merchandising Make meal preparation easier by connecting centre store with

the frozen and refrigerated aisles68 Equipment Outsourcing FF&E allows grocers to focus on their business70 Equipment & Design Supermarket signage refl ects new technologies72 What’s Next New products in the market74 Retail Guide Innovate with merchandise and grow business76 Business Opportunities Fresh avenues to expand and grow

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Interface Retailer

Experiencing SpicesDr. A Jayathilak IAS, Chairman, Spices Board of India, elaborates on the ideation behind their experiential centre cum retail store

How and why was the idea of the retail store Spices India conceived?Spices Board of India launched a pilot project – an experiential centre cum retail store covering a fl oor area of 1,200 sqft called Spices India, at Lulu mall in Cochin. The main objective was to promote a unique brand image about Indian spices. The store offers customers an environment wherein they can touch, smell and feel the spices, and where they are also educated on the various culinary, neutraceutical and medicinal uses of spices.

The store concept was deemed essential to create and uplift the perception among consumers across markets that Indian spices

By Juhi Sharma

rank high in quality, food safety and hygiene aspects. This called for creation of a unique Indian brand, to be promoted in the domestic and international markets. Also, we feel that there is ample potential in the Indian spices to be promoted for their non-conventional applications and export of products derived from spices. Therefore, this initiative will also help in educating consumers on various culinary, nutraceutical and medicinal aspects of spices.

Tell us about the inspiration behind the store design Bangalore-based Four Dimensions Retail Design (4D) has designed Spices India Dr. A Jayathilak, Chairman, SBI

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and the concept fetched an investment of around Rs 1 crore. In terms of the inspiration behind the design element, we wanted the store to be an expression of the Indian culture, with themes ranging from art, history, geography, health to cuisine, while highlighting the impact of the Spice Trade in shaping our history. The various finishes, texture, shapes and hues found in the store were designed to complement the Indian architectural language. We wanted the space to articulate authenticity with a very simple and clean front, so the signage was kept on one side, allowing the store to showcase itself. The entire space has been designed to appeal to all the five senses, for instance, one important element of the design is the central area, with a long table in rustic white finish with spices placed in traditional containers, along with books and facts about spices.

The furniture and other fi xtures have been styled in white and polished wood with a combination of rustic fi nish and clean lines, so as to draw attention to and highlight the products. We wanted to build a niche image of the products and showcase the same in an environment that refl ected the feeling of Indianness, and at the same time capture customer attention by evoking a sensory experience through the aroma of Indian spices wafting through the store. Our aim has been to give our customers an unparallelled experience wherein they could touch, taste and smell the spices.

What brief did you give to the design company for such an modern store design for a commodity like spices? Going by the current trends in the market, right from inception, we wanted to create an identity amongst the target audience and help them elevate their mindset about purchasing spices from the next-door kirana shop. We made it clear to the store designer that we wanted Spices India to look more than just a retail outlet, which should offer an eclectic contemporary-traditional Indian set-up. Also,

since one section of our target audience is travelers and tourists from various parts of the world, the store had to be more of an experience to promote Indian spices not only in the country but overseas as well. One of our objectives was to uplift India’s image in the domestic and international markets through the Spices India signature store. We also wanted to give prominence to our suppliers who comprise progressive farmers, co-operative societies, and grass root organisations through our in-store graphic communication.

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COVER STORY

Promotional campaign at an Auchan store

Promotional campaign at Wine Baron, Bangalore

Fresh produce on display at Heritage Fresh, Chennai

Needs Supermarket, New Delhi

In-store promotions open up a basket of goodies for consumers in the form of affordable price points or access to a diverse portfolio. At their end, both retailers and brands get visibility, build clientele,

scale up their brand equity, and generate additional salesBy Kavitha Srinivasa

Marketing Mantra

Cover Story

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USDA promotion of supplier brands at Le Marche, New Delhi (above) and at Haiko Supermarket, Mumbai (below)

In-store promotions come with their own success story; they address visitors and convert interest into business propositions. Given that in modern trade formats majority of purchase decisions are made in the store itself, this becomes an important means for driving product and brand sales. “Retail stores are not merely

points of distribution, but important communication points too. In-store promotions are effective marketing tools that enable brands to stand out and retailers to offer an enriching and enticing shopping experience,” says Pragya Singh, Associate Vice President at Technopak Advisors.

Making a pointIn-store promos of FMCG products and F&B products can serve several purposes for retailers and brands. “They help retailers to liquidate slow moving stock/near-expiry stocks. In the process, they drive higher footfalls and boosts sales,” reasons Singh.

Clever retailers go beyond the in-store promo to create an enriching and differentiated shopping experience. “Our agreement with the brand is based on the time duration and the space we provide to the brand in our store. The brand may also send their representative to explain about the product to the customers, which is a very helpful tool to increase sales of the brand because it directly deals with customers,” says Hitesh Arora, Managing Director, Kipps Mart, a reputed gourmet food store in Ludhiana.

There are several ways through which brands and retailers engage in store promotions, most popular being product displays in strategic locations, and through signs and banners. Coupons are an indispensible tool, which consumers trade for money at the cash counter and which are redeemed against the products purchased. Though coupon redemption volumes scale up in times of economic crisis, such programmes are benefi cial to retailers for several reasons: they help move a slow-selling product and increase the volume of customers. With certain coupon programmes, smart retailers win customers by rewarding them with gifts.

Displays, usually made of cardboard (and disposable), also help to draw customers into the fold. Neon-lit non-disposable displays create an impact too. Attractive schemes linked to discounts, bundling and freebies are other promotional schemes, but these are usually for a limited period or on a limited stock. The objective is to create trials and put forth the right message. For brands, they create increased awareness, enhance sales, and sometimes, even result in brand switch. “While the timing of promos varies for brands and retailers, typically, most common promotions can be seen around festive occasions or seasonal changes, and during launch of new brands/new products, or new marketing campaigns. In all, they help in boosting slowdown in projected sales,” observes Singh.

How a chicken set wings to a new campaignThe message was about Real Good Chicken - a 400 gm pack priced Rs 48 - launched by Godrej Tyson Foods Ltd (GTFL). The product’s winning factor was its affordability (the price point was arrived at through brainstorming sessions backed by R&D). The campaign ran in Bangalore, Chennai, Hyderabad, Mumbai and Pune from November 2013 to January 2014. Reveals Sushil Sawant, Associate VP - Marketing, R&D and Business Development, Godrej Tyson, “The campaign was created keeping the protein requirements of the consumer, and we hit upon the idea of packaging chicken into an affordable price point.” The company cooked up a formula for an ideal situation, where protein needs of various sections of society were probably being addressed for the fi rst time. It led to a major shift in

consumption. From the high-end SEC A, the brand won over consumers belonging to SEC D. Consumers were led in by the fact that a branded player had retailed chicken in an affordable, small family size packet.

The promotion rolled out with GTFL entering market places near railway stations. “Our products were sold in mobile vans and this gave it more visibility. Also, more retail chains came forward to sell our range, and the number of retail stores increased by 15 percent, and retailers managed to expand their consumer base,” adds Sawant. After

In-store promos help retailers liquidate slow moving or near-expiry stocks. In the process, they drive footfalls and boost sales

– Pragya Singh, Technopak Advisors

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By Jennifer Strailey

The Hunger GamesProduce plays a leading role in

America’s surging healthful snack trend

Snacks

A growing number of the nation’s healthiest consumers are embracing smaller meals or snacks consumed whenever and wherever hunger strikes. Many of

these snacks include fruits and vegetables conveniently packaged to encourage better-for-you eating on the go.

“Not everyone eats three squares anymore. A lot of folks like to graze throughout the day,” says Kathy Means, spokeswoman for the Produce Marketing Association (PMA), in Newark, Delaware “We’re seeing healthy snacking as part of an important diet trend. We’re seeing it with kids in particular, but the overall move toward snacking crosses every demographic.”

Indeed, everyone from health-conscious baby boomers to Gen Xer moms and dads to millennials is opting for nutritious, unprocessed snacks. But it’s this last group — a generation that cut their teeth on snacks, as it were — that has some retailers revamping their offerings to appeal to the young and health-wise.

Take the convenience chain 7-Eleven, which recently rolled out healthier snack sections in the majority of its approximately 8,000 U.S. stores. The new snack sections feature bulk aisle-style clear containers of wholesome treats such as dry-roasted edamame, veggie chips, dried fruit, banana chips and nuts.

“Better-for-you is one of the fastest-growing segments of the snacking category,” says

Rebecca Frechette, a VP of merchandising at Dallas-based 7-Eleven.

This trend isn’t surprising when we consider who’s doing the most snacking. According to the NPD Group’s “Snacking in America” report, consumers with the healthiest diets consume 36 percent more snack meals a year than the average consumer, and snack twice as often as those with less healthy diets. The Port Washington, New York-based researcher also found that fruit was the top snack among the nation’s 167 million daily snackers.

Naturally delicious produceWhen it comes to healthier snacking, what’s not on a product’s ingredients list is often as important to consumers as what is.

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By Juhi Sharma

W ith its huge range of spices from whole to ready mixes, and blended spices such as cumin, black pepper, turmeric, chilli, chana masala and

garam masala, India is aptly known as the land of spices and culinary herbs. Some of the major forms of spices that are produced and consumed include whole spices, ready mixes, powdered spices, organic spices, spice blends, curry powders/ mixtures, and oleoresins, in addition to the value added variants such as spice in brine and de-hydrated spices. Among all the forms, whole, ready and powdered are most commonly used. Demand for oleoresins, mixtures, organic and other value-added spices is limited in India, but they are in high demand outside the country.

The last few years have witnessed a sea change in the way spices are being processed, retailed and consumed. Gone are the days when consumers preferred loose, unbranded spices sold at the local kirana. The trend was to purchase whole spices and grind them at home in order to retain their freshness and taste. Today, the market trend depicts a

The evolving Indian spice market has emerged as an attractive avenue for investment

Product Watch

The Spice Trail

considerable shift towards branded, packaged spices as convenience-driven consumers are increasingly opting for blended and value-added variants.

“Consumers today look for products with an assurance of quality and more choice and variety that suit modern-day cooking styles. The market for blends is growing rapidly as it provides the convenience of a ready-made solution against the process of putting together various ground spices – an elaborate process usually required for Indian cooking. This change has led to the evolution of the branded, packaged spices market,” says O P Khanduja, Associate Business Head, Catch Foods, Dharampal Satyapal (DS) Ltd.

“Apart from psychographic changes in the urban areas, increase in the literacy rate in rural areas has also added to the shift in buying patterns from loose, whole spices to branded, blended spices, observes Jatin Poddar, Director at Poddar-G Foods, and adds,“India’s domestic spice consumption is around 5 million tons. The branded segment currently contributes to just 15-20 percent, so brands have a lot of potential for expanding reach, but they have to penetrate

the market at the right time and at the right place,” states Poddar.

“Natural and organic spices have potential to grow in demand in the future with artifi cial fl avours and colourants fi nding less and less takers,” opines Sourabh Nowal, Business Head-Marketing, Prakash Spices.

“Times keep changing, if today, customers are demanding blended spices, tomorrow they might come back to whole spices. The positive change has been the market becoming more organised, where consumers can choose as per their requirement, besides which, every product comes with quality assurance and a promise by the brand,” says Kannan Doss, Managing Director at Spice Route.

Adding fl avourThe packaged spice market is highly unorganised with a slew of regional/local brands dominating the category in their respective zones. These include Goldiee Masala, JK Spices, Ashok Masala, Poddar Spices, Eastern Spices, PRS, OS, Prakash Spices, Mahak, Badshah Masala, Nani (Aditya), Hakeem Masale, Narpa Spices,

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However, Khanduja at Catch is unfazed: “No, we don’t feel that ready-to-use spice mixes are a threat. Spices as a category will always be in demand and cannot be eclipsed by anything else. Ready-to-use spices are defi nitely growing in demand and will help in expanding the market for packaged spices,” he says.

On the other hand, w, Director at ASA Trading, is upbeat about the growing competition: “The more the merrier! More choices for consumer, the better it is for them. Any product that invites customers to cook in new and exciting ways is good for the whole sector. Different things can be put to various use. So, let the customer decide which product best suits her or him.”

A more pragmatic Kannan Doss opines, “There may be many brands and players today, but eventually, in the long run, only those will stay, who are able serve customer needs. We are operating in a market where customer preferences are changing every

Patco, Ashok Masale, Pooja Masale and Sahiba Spices.

There is another set of local players – specialty spice boutiques or exclusive spice stores operating in various part of the country. They cater to a specifi c audience and are positioned on a premium price band. These include established names such as the Bangalore-based Spice Route, Jodhpur-based MV Spices, and the more recent Spices India set up in Cochin by the Spices Board of India..

Local spice manufacturers have entrenched themselves deep in the markets, primarily due to price competitiveness and successful customisation of spices to suit local tastes. Consumer preference for packaged spices also varies from region to region; this factor is also responsible for the fragmented state of the spice market. For instance, the north and west Indian markes exhibit higher demand for national brands, while southern India prefers local brands.

On the other hand, the branded spice segment is being driven by a handful of players, namely, MDH, Everest, Catch, Cookme and MTR. These national brands have a strong presence in most big and small cities, and are also reaching out to the uncaptured urban and semi-urban markets. MDH is believed to be a market leader in the north, while Everest dominates the western and southern markets. Cookme is a top performing brand in the east; MTR is more visible in the south, and Catch is stronger in the north, followed by the east.

With the advent of modern retail chains, the spice market became further fragmented when large chains such as Food Bazaar, More, Spencer’s, JK Life Store, Nuts ‘n’ Spices, etc, began to launch in-house spice brands. In fact, realising the revenue potential, many big and small retailers have also developed private labels for whole and powdered spices, which they are selling through their stores. Modern retail also propelled and became a gateway to the Indian market for international brands such as the US-based McCormick, and Denmark-based ASA (pronounced ‘asha’), which runs a shop-in-shop in gourmet food store, Foodhall.

There are a host of easy-to-use and ready-to-use spice mixes, and the segment is

defi nitely poised for cut-throat competition. “Regional players have always been there and they will continue to be present, owing to their understanding of local tastes. Even national and international brands are trying to tap the regional palate with region-specifi c blends, but they will have to combat stiff competition from local players. It is very diffi cult for national and international companies to be equally competent. In terms of demand, there is enough demand in the market to accommodate many more players, as at the end of the day it is ‘Survival of the Tastiest,” observes Nowal.

He adds, “There have been many more entrants offering new products such as wet masalas and various ready-to-use mixes, but as of now, they are testing the waters. There is some time before they become a threat.If the trend starts favouring these new categories of spice mixes, the existing brands won’t delay in following suit and offering competive products.”

We don’t feel that ready-to-use spice mixes are a threat. Spices as a category will always be in demand and cannot be eclipsed

– O P Khanduja, Catch Foods, Dharampal Satyapal

Top Three National Brands in different regions

North India West & South India East India

1 MDH Everest Cookme

2 Catch MDH MDH

3 Everest CatchSource: Industry Sources, Technopak Research Spices India store in Cochin launched by SIB

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