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INDIA EDITION
www.indiaretailing.comFEBRUARY 2014
Achievers, Innovators, Trendsetters, Go-GettersThe Industry applauds them
Page 22
INTERFACE • 14Romie Dutt, Sahara Q
RETAIL OUTLOOK 2014 • 60Grocery Selling Success
PACKAGING • 76F&B Solutions in Stores
AWARDS • 46
FGFI 2014 • 22Industry’s Premium Event
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Anirban Sarkar, ManagerE: [email protected]: +91 9830007920
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FEBRUARY 2014 • VOLUME 8 • NUMBER 2
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Editorial
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It gives me immense pleasure to say that our recently concluded Food and Grocery Forum India was a resounding success. Besides occupying more exhibitor space this year (30% more than the previous), it went beyond our expectations as regards visitor turnout.On the spot feedback taken by the Images team from the exhibitors, delegates and all other participants on day one and two revealed that the forum’s main aim, that of connecting the industry on a common and mutually benefi cial platform, had been well met. Business deals were formed, brand visibility reinforced, old ties between suppliers and distributors strengthened and new ones forged, and innovative products launched with great fanfare.
For many fi rst time participants, the forum was an eye opener as they listened to industry stalwarts discuss challenges, issues, and trends at a series of sessions that were held in quick succession. They acknowledged the importance of taking a professional approach towards their business, with some even reserving space for the next forum!
The concurrent Indian Food Service Forum saw master chefs toss up interesting dishes, give demos on the right cooking mediums, ingredients and kitchen equipment, while at a Drinks Theatre attendees got a brief yet valuable lesson on wine appreciation. International trade bodies and associations and Indian importers were visible in large numbers.
Finally, the Coca Cola Awards, as always, were presented to the achievers - those who had driven change, overcome obstacles, met challenges, and taken the industry to a higher level of growth. (A snapshot of the forum is presented in this issue).
I thank you for all your support in making the FGFI a premium event of the Food, Grocery, FMCG and Food Service industry.
Food and Grocery Forum India 2014 gets a thumb’s up
Business Head
Rakesh Gambhir, Vice PresidentE: [email protected] M: +91 9910001375
www.indiaretailing.com
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COVER STORY
22 Food & Grocery Forum 2014 The 7th edition of Food & Grocery Forum held concurrently
with India Food Service Forum, saw participation by 90 industry leaders, 203 delegates, over 500 national and regional brands, 90 exhibitors, and over 6,741 visitors, from the Food & Grocery and Food Service sectors. Industry experts shared ideas, innovations, growth strategies, and new opportunities. The theme was ‘Growing Modern Food Retail by Building the Appetite for Food Consumption in India’
FEATURES
12 Progressive Views Leveraging Local: Locovore movement deemed here to stay
and ready for retailers to run with it
14 Interface Romie Dutt, ED, Sahara Q, shares the company’s vision of
building a unique retail network
18 Interface Rashi Choudhary, COO, LocalBanya.com, discusses plans
following funding
20 Interface H R Salman, MD, Al Maha Foods, discusses the developments
in the rice industry
FOOD & GROCERY
60 Retail Outlook PG pinpoints stops on the route to grocery-selling success
in 2014
66 Industry Insights Driving Sales: By taking the right steps, grocers can expect to
see increased sales and repeat customers well into the new year
Contents
F E B R U A R Y 2 0 1 4 • V O L U M E 8 • N U M B E R 2
PRODUCTS
68 Fresh Produce For better health, weight management and great-
tasting dishes, consumers are savouring citrus like never before
70 Cheese Global industry experts predict that India is the next big
market for cheese consumption
74 Non-Food Consumers are looking for more convenient and
faster cleaning products that don’t hurt the planet of their wallets
REGULARS
08 Market Update What’s new in the F&G market
10 Industry Speak Beating Amazon at its own game
76 Packaging Solutions across the store are revolutionising food and
beverage packaging
82 What’s Next New products in the market
84 Retail Guide Consolidate and grow profi ts
86 Business Opportunities Fresh avenues to expand and grow
88 Feedback FGFI 2014 Stakeholders testify to the Forum’s importance as a premium
platform for the industry
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Interface Retailer
What was the ideation and concept behind the Sahara Q FMCG-retail network?Today, in most of the things that we consume, from food and beverages to beauty and personal-care products, adulteration and malpractices such as incorrect weights, unregulated packaging and unfair prices are rampant. The consequences are catastrophic, with crippling food-borne diseases that often turn fatal, amongst other health problems. The vision of our Chief Guardian Shri Subrata Roy Sahara Ji of a healthy and resilient India laid the foundation of a movement which India has never seen before. With a vision to bridge the gap between what we deserve and what we actually receive, Sahara Q was born to serve the nation with quality consumer merchandise and a belief that the consumer deserves nothing but quality. We believe that it is the right of every Indian to demand and be served only healthy, nutritious, clean, hygienic, and 100 percent unadulterated products.
Seal of TrustRomie Dutt, Executive Director, Sahara Q, shares the company’s
vision of building a unique and innovative retail network that serves only quality consumer merchandise, with Manisha Bapna
products that cater to the monthly needs of every Indian household. Our uniqueness is that we not only manufacture our products, but we also distribute and market them through our exclusive brand outlets, and through the conventional and successful kirana model. It gives us better command and control over the entire process of the supply chain – from procurement of raw material to sales to the end-consumers, to product prices. We also have a direct reach to market conditions, preferences, and of course 100 percent control over quality, which is our prime focus. So, when a product reaches the consumer, he has a product whose quality he can blindly trust, and at a most competitive price.
A SWOT analysis (Might of Sahara India Brand Presence) revealed that strong fi nancial capabilities and high-quality unadulterated consumer merchandise are the key strengths of this model. We have
Sahara Q was launched on August 15, 2012, and it started showing growth and expansion with close to 200 stores opening in less than 6 months. This surge in demand was a result of growing acceptance for Sahara Q products among consumers across the country, which compelled a faster expansion. But the fast movement did not dilute the ethos and the challenge to ensure that Sahara Q products reach as many Indian households as possible. This was achieved by opening 315 stores across the country on 1st April, 2013. We achieved this target with such élan that it even fetched us Guinness World Record that is standing till date! Today, we have close to 1,500 exclusive brand outlets offering unadulterated, hygienic, and quality stamped food items and staples.
What are the key strengths of the model?Never in the history of our FMCG industry has any company introduced a broad spectrum range of over 895 unadulterated, high-quality Romie Dutt, Executive Director, Sahara Q
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been able to tap huge growth opportunities in the categories we are planning to sell as they have a market running into several crore of rupees. There is huge space for national players, especially in staple and processed food category, which gives us impetus to grow large and fast. For example, products developed in the personal care range are free from parabens and mineral oils and these claims are backed by testimonials. Talking of weakness, specifi c product advertisements could be a tough task given the fact that we have close to 900 products in our portfolio. If we think of threat, then I would say that we will take some time to get consumer preference for some of our products as a few existing brands have been in the market for several years and have a heavy advertisement presence.
What are the challenges?In a country like India, adulteration is rampant yet a foreign word to consumers, especially in suburban areas. It was a challenge to penetrate these markets with our hybrid model of FMCG and retail. We did not have any precedent
to follow, rather we set a precedent! In our journey so far, we have successfully made our customers imbibe the concept of using adulteration-free products, identifi ed quality manufacturers/vendors, forecast demand, planned the entire portfolio of products, established our own warehouse capacity to keep in line with demand, and identifi ed the right locations for our retail stores.
Please tell us about your manufacturing/sourcing capabilities.Our product portfolio includes staple, processed food, water and beverages, homecare, personal care, home appliances, kitchenware and general merchandise. The stores only carry Q products. We have outgrown numbers in a few specifi c categories such as staples, personal care, processed food, and homecare. Our recently launched heat convectors have also picked up numbers in the market.
Sahara Q products are contract-manufactured through selected facilities which pass the 100 point checklist encompassing the set standards in terms of FSSAI, HACCP and ISO certifi cations, and follow good manufacturing and hygiene practices. These manufacturing facilities are strategically located across the nation in order to get the best quality material. The sourcing of all the raw materials is done through a dedicated department across from the best known markets.
What are the measures taken for maintaining quality standards?Our objective is simple - Sahara Q has to be a seal of trust, a promise of best quality, and
We plan to have 1,500 exclusive brand outlets, 2,500 distributors, and 500 Quality Mobile Shops by March 2014
unadulterated products. Sahara Q has kept a total control over the supply chain to ensure 100 percent compliance on quality parameters right from sourcing of raw material to last mile delivery. All manufacturing facilities go through rigorous pre-approval audit processes and products manufactured there are tested against more than 100 check points before they are offered to the customers. There is a continual process to test product shelf life and product behaviour in market conditions.
In fact, the company has taken an integrated approach towards quality by setting up a Sahara Quality Management System (SQMS) comprising Quality Control and Quality Assurance departments. A team of quality experts follow a layered approach to check different products for adulteration. There are 7 Quality Labs in Lucknow, Delhi (NCR), Mumbai, Patna, Kolkata, Hyderabad and Nagpur to carry out standard tests on products.
We have also constituted a Quality Vigilance Team comprising of ex-army personnel stationed at each of our manufacturing facilities to ensure stringent quality checks and ensure absence of foreign ingredients in the composition of products. A 100 point quality check doubly ensures that from the point of sourcing to manufacturing our products remain untampered. The company also participates in random checks done by international testing and certifying agencies.
Where is competition coming from?The market is huge and growing. In today’s changing scenario, where the customer is aware and health conscious, a shift to Q products is the right thing to do. Also, there is no big national player in our major categories like staples and we see this as a great opportunity for us. With 30 percent month-on-month growth, we are witnessing overwhelming acceptance for our products and I am sure this is helping us in creating a market for our products.
Please tell us about Sahara’s EBO, COCO and CORO models. The company has three types of exclusive brand outlets: company owned and company
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Cover Story
The seventh edition of Food and Grocery Forum India (FGFI) 2014 was all about ideas, innovations, growth strategies being adopted in Modern Trade, and discovering new opportunities to boost
the industry. The concurrently held India Food Service Forum 2014 further expanded the scope for a deeper understanding of the food and grocery and foodservice industries. The event was attended by leading international brands from countries such as Canada, Dubai, Ecuador, USA, Singapore, Spain, and Colombia. Over 500 brands from 50 countries were present under the FIFI banner, besides national and regional companies from across the country.
The Forum, considered India’s biggest platform for food and grocery business, was held on 23rd and 24th January at the Bombay Exhibition Center in Mumbai. It is recognised by the national and international retail communities through the organiser, The Images Group, which is seen as a retail intelligence organisation that acts as a catalyst and facilitator for the profi table growth of Modern Trade through its knowledge platform leadership viz B2B Magazines, Conferences, RoundTables, Exhibitions, Research Volumes, and Web Portals dedicated to the Retail Industry. It awards the industry's achievers and innovators, who are evaluated and selected by an esteemed jury comprising of industry leaders.
FGFI is the only event in India that connects the food and grocery retailers and food service operators. Through an innovative format of Conference, Exhibition and Awards, the Forum enables global best practice exchange, and delivers knowledge, and thought leadership to Modern Retail.
FOOD & GROCERY FORUM 2014
Applauding Achievers, Innovators & Go-Getters
Facilitating Thought Leadership
Paving the Way for Growth and Modernisation
90 INDUSTRY LEADERS ■ 203 DELEGATES ■ 500 BRANDS ■ 6,741 VISITORS ■ 84 EXHIBITORS
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The Drinks Theatre conceptualised by Tulleeho Wine Academy, featured tastings and seminars with a select audience of brands, importers, the F&B industry, media, travel retail sector, and food retail. A discussion on “Factors constraining the increased presence of Indian wine on top drawer hotels and restaurants' wine lists” included insights by Sonal Holland - Corporate Head, Wines and Beverages, ITC Hotels; Cecilia Oldne - Global Brand Ambassador/Head International Business, Sula Vineyards; and Gauri Devidayal - Partner, The Table, Mumbai.
Live KitchenLive Kitchen was a major highlight where chefs demonstrated new cooking ingredients, cooking equipments and cuisines.
Drinks Theatre
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By the PG Staff
A Delicate BalancePG pinpoints stops on the route to grocery-selling success in 2014
Retail Outlook
Are loyal customers worth more?The folks at Schaumburg, Illinois-based Nielsen seem to think so. “There is a strong link between the way consumers describe their
Myriad challenges and opportunities lie ahead for grocery retailers in the coming
year. Operations, technology, health, service and connecting with consumers, all will be paramount to supermarket operators bent on success in the new year, regardless of any economic or regulatory obstacles. In many cases, these areas are intertwined, making a coordinated effort to address them even more important. On the following pages, PG offers a guide to winning at grocery retailing in 2014 …
loyalty habits and the way they subsequently buy — so even comparatively small shifts in what consumers say can manifest in big changes in what they do,” says Julie Currie, Nielsen SVP for global loyalty. “While there is some consistency around the world in loyalty sentiment within categories, across retailers and service providers, there are also notable differences — especially for consumable products and in the online retailing space, where the likelihood to switch is greater.”
In the grocery sector, respondents to Nielsen’s Global Survey of Loyalty Sentiment expressed more loyalty to the retailer (globally, 74 percent said they were loyal to a grocer) than they did to brands (an average 61 percent loyalty across the categories surveyed).
Nielsen also confi rmed something that grocers like Kroger with successful loyalty programmes already know, that loyalty programme prevalence and patronage go hand in hand. Nielsen’s survey polled more than 29,000 online consumers in 58 countries throughout Asia-Pacifi c, Europe, Latin America, the Middle East, Africa and North America.
So what do grocery retailers need to be doing to ensure loyalty — to boost their
standing in their shoppers’ hearts and minds? What strategies should they be employing, both face-to-face and digitally, to make that crucial connection toward return trips and sustainable loyalty?
Grocers need to come out from behind the counter and back of house to establish the kinds of relationships with shoppers that will keep them coming back. Shoppers are looking for a fun experience, as PG’s Meg Major reported last month on the Retail Feedback Group’s 2013 U.S. Supermarket Experience Study. But while they’re having fun, experiencing the theater of food demonstrations, product sampling, and mood-enhancing aromas, music and lighting, they want to learn something: the story behind their food, where it comes from, how to prepare it. Sure, shoppers could probably fi nd this information online, but getting it from their grocer puts a face and a voice to the story, as well as providing a knowledgeable ear to process shoppers’ questions.
That said, an increasingly important aspect of the grocer-shopper relationship is social media, which extends a grocer’s reach beyond the store into places and times that
Shopper EngagementThe Consumer ConnectionBy Jim Dudlicek
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consumers often need their guidance most. It’s surprising that a few grocers responding to PG’s annual report survey still don’t recognise the value of reaching out via Facebook and Twitter, and resist spending time and resources on them. But most see these sites as valuable tools to extend the grocer’s touchpoints to the kitchen table at list-making time, or the drive home when many consumers are just starting to think about what the heck they’re going to make for dinner.
Seattle-based Blueocean Market Intelligence ranked the top 10 retailers on its 2013 Social Media Effectiveness Index (SEI), a global study assessing the business impact of top retailers’ social media efforts. It found retail brands with positive scores across multiple social media dimensions have the greatest potential for market leadership and infl uence over customer experiences (www.blueoceansei100.com).
Mainstream grocers in the top 10: BJ’s Wholesale Club (No. 2), Walmart (3) and Kroger’s Ralphs division (9); grocery upstart Amazon.com came in at No. 8.
“SEI goes far beyond social media usage and engagement. It explores the real business impact of social media. We’ve identifi ed who’s doing it right and who has room for improvement,” says Anees Merchant, Blueocean SVP. “Top SEI companies are using social media more strategically to disseminate the right mix and amount of information, build thought leadership, and develop a strong framework around the customer experience.”
Social media leaders employ virtual and traditional word-of-mouth marketing, offer digital discounts or interactive contests, promote an omni-channel presence (both online and offl ine), and integrate their social media efforts into their customer relationship management systems, Blueocean reports.
The evolving role of the retail dietitian will also be crucial to enriching the grocer’s relationship with consumers who, in ever-increasing numbers, want to know more about the origin, content and nutritional value of the foods they’re buying.
Nearly 40 percent of grocers surveyed by PG employ retail dietitians in some capacity, from marketing and merchandising to PR and pharmacy. Nearly three-quarters of retail dietitians collaborate with in-store pharmacists on the stores’ nutrition programmes — a good sign that grocers understand the connection of good food to good health as part of sweeping wellness initiatives.
Less encouraging is that only about 7 percent of grocers who don’t already have a retail dietitian plan to hire one in the coming year. PG urges more aggressive movement in this direction as a way of further enhancing the customer relationship and the grocer’s standing as a food information resource.
Most grocers see social media as a valuable tool to extend their touchpoints to the kitchen table at list-mak ing time, or the drive home when many consumers are just starting to think about what to make for dinner
Agreat aspect of store-based retail is that regardless of new technology and tools to
serve the customer, there’s no replacement for a positive service interaction with a person,” says Doug Madenberg, principal of Retail Feedback Group (RFG), a Lake Success, New York-based fi rm that helps retail clients listen and respond to their internal and external customers.
While people have always been the bedrock of successful grocery stores, Madenberg says the scope has widened. “Years ago, we talked about customer and employee satisfaction. Then there was a shift to loyalty metrics,” he says. “Now the emphasis is on engagement with both internal and external customers, and the concept of engagement has broadened to include more of the things that are important to today’s shoppers and employees, such as community and self-fulfi llment.”
Success still begins with hiring the right people. “We hire nice people to train; we don’t train people to be nice,” says Dave Skogen, chairman and “cheerleader” of Festival Foods,
ServiceEmpowering the PeopleBy Joan Driggs
a Onalaska, Wisconsin-based grocery chain. “When you hire based on character, you’re hiring someone who came from good parents. … We see quality, humbleness and a certain amount of passion.”
Skogen says Festival’s team of human resources specialists look for body language and try to measure character in applicants. “They visualise the person’s character, what he/she is like when no one is looking,” he explains.
While all retailers have some customer service component to their training programmes, “the best retailers place more emphasis on situational training and role playing,” says Madenberg. “The best employees are the ones who can think like an owner of the business. Friendliness and attitude are part of the equation, but the real prerequisite is empathy or some measure of emotional intellect. The best employees understand the mind state of the customer, in addition to the customer’s need, and then address it in the most effective way.”
In his book “Boomerang! Leadership Principles That Bring the Customer Back” (9th Street Publishing, 2013), Skogen supports Madenberg’s assertion that employees need to be empowered to make their own decisions. “…[T]oo often some rules will limit what our associates can do to serve our guests,” Skogen writes.
Festival’s ‘Boomerang’ theory is that “every business decision we make is based on this question: Will it bring the customer back?” It also includes the company’s care of employees, because customers will receive better service from associates who are satisfi ed with their work.
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Exhibit 1 presents a broad classifi cation of the types of cheese that are available in the Indian market. Among these, the processed cheese market forms almost 45 percent of the total market that is likely to grow a higher-than-average CAGR of around 25 percent, which includes all spreads, cubes, slices, tins, slabs, etc. Within the processed cheese segment, around 60 percent of the market is dominated by unspreadable processed cheese. The segment is well organised, comprises regional, Indian, and international players, and is registering high levels of entrepreneurial activity. On the other hand, the unprocessed cheese market is largely associated with the soft cheese category in India, usually associated with paneer. The traditional soft cheese constitutes over 55 percent of the total market, with only a small fraction thereof being contributed by the organised sector and is expected to continually form the major chunk,
By Tarun Jain and Vidul Sharma
India is the largest producer of milk, which is the most widely produced agricultural commodity worldwide. With annual production ranging between 140 and 145 million tons in 2013, India is
second only to the EU-27 bloc that collectively produces over 156 million tons, as per the USDA. Further, India’s milk production is expected to total 170 million tons, by 2020, thus surpassing the global average growth rate of approximately 7 percent. A notable fact is that the per capita consumption in India has reached around 275 gm/day, which is higher than the WHO recommendation.
With the ease of availability of raw material, the as-yet-nascent milk processing industry is registering new levels of growth. Milk processing in India accounts for approximately 35-36 percent of the total production, with a majority of the share being consumed in a farm-fresh, or non-pasteurized, state sold through unorganised channels, while the organised dairy segment constitutes merely around 15-20 percent of the total processing market. The main value-added products include milk powder, whitener, packaged milk, butter, ghee, yogurt, cheese, and ready-to-drink milk products, which are, thanks to high consumer demand, growing at anywhere between 15 and 25 percent.
Among the processed dairy products, the most promising segment both in terms of consumer demand and business profi tability is the cheese segment. Traditionally, India is not a cheese-consuming nation as the Indian consumer’s palate has been adapted to the softer Indian variant of cheese called paneer. But, in recent years, given the magnitude of the demand from Indian consumers, global industry experts predict that India is the next big market in terms of cheese consumption. This forecast also accounts for the fact that, although Europe and North America are the primary cheese
Global industry experts predict that India is the next big market in terms of cheese consumption
Product Watch
markets today, a saturation therein is forcing suppliers to look elsewhere, to such currently major importers as Japan and Russia, and to developing markets like India.
The Indian cheese market is presently worth around USD 237 mn, but is expected to grow at roughly 15-20 percent annually. Product-wise, the global market deals in almost 3,000 varieties of cheese, whereas in India only about 40-45 variants are being marketed, presenting much room for the market’s expansion. By industry estimates, the current household penetration in terms of cheese consumption is less than 7-8 percent. The per capita consumption of cheese in India is a mere 200 gm per year in contrast to the global average of 7 kg per annum; the average for urban India, however, is 700 gm per person. Geographically, the top six cities consume approximately 60 percent of all the cheese sold in India.
Say Cheese
Pix: shutterstock.com
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