I am from Madhya Pradesh, and belong to a typical Marwari family, my father supplies wheat, soyabean to ITC and Ruchi soya etc. One of my uncle runs a flouring mill and supplies flour to ITC (Aashirwaad) and sells the same in local market as well.
To sum up we Purchase best quality wheat, do flour processing and packaging and sell it to ITC. ITC sells and distribute it pan India. We are not he only suppliers there are 50-60 suppliers like us. Now i have told you the background.
I want to introduce a new atta brand.
Target consumers are upper middle class and above. And i want to sell it in tier 1 cities through modern trade or big Kirana stores only.
My question to you is should I introduce it at Aashirwaad’s price point or at a lower rate. Will you buy same content with an unknown brand at a lower price or will you prefer if i spend money on Marketing and promotions and introduce it at same price point as Ashirwaad and others. And start competing with best brands in market. Also our product will be best quality Sharbati wheat atta. You can say our product is like tupperware’s (quality) in plastic material minus the brand.
asha chaudhry
hi harsh,
very interesting question.
i am very brand loyal to ASHIRWAAD – the multigrain version as well as the normal version.
the biggest challenge i reckon you will face is competing with a BIG BRAND.
here you can explain to all of us that you one of the suppliers to ITC but how do you communicate that to the customer who is used to buying something she has tried and tested?
a few suggestions:
– keep your price lower than ITC – one thing the indian consumer is fed up of is THE RISING PRICES – every time she shops her grocery bill is higher than the previous month 🙁
– invest in tasteful packaging. this is an essential food item here and you are competing with a giant!
– FREE SAMPLING: the best way to get people to try your product (to prove that you are ashirwaad quality would be to initially come out with branded small packs 300gms (?) – and get customers at influential stores (grocery or kirana) to sample these. TASTING IS BELIEVING!!! if your product (and pricing!) rock – happy customer word-of-mouth will take over.
pls connect with tanutejas ASAP – i will also ping him for you right now.
https://www.therodinhoods.com/forum/topics/indore-s-first-e-grocery-port…
he is the shopkirana dude based in indore. and i’m sure he’ll have lots of other insights to share with you. pls ask him if you can conduct sampling with his customer base….!
all the best
Saraswathi Pulluru
hi Harsh,
Asha has told most of what I wanted to write 🙂 As she said, we are also very very loyal to ASHIRWAD and would not even look at other brands while making the purchase.
People will invariably shift if and only if they find same or better value for a lesser price than the market price. But, at the same time, the customer should be attracted towards your Atta not only for it’s quality but also for packaging/ free recipe book / or any other innovative marketing strategy you can think of.
For your case, in case you wish to try – going to big apartment complexes and holding competitions/ awareness campaigns on your brand atta. And all the while, you will need to stress on how experienced you are in this Industry. give people reasons to trust you and provide free samples.
Also, there are a lot of online shops currently selling stuff. See if tying up with them to deliver free sample with every order, and placing them in their catalog helps.
To sum up, as a customer – I want to see the experience of people selling the ATTA, want a free sample to test first, want it definitely a bit lesser than ASHIRWAD and may be, 1-2 reasons on why this is better( if there are any).
Cheers 🙂
Ashish Parik
Hi Harsh,
Good and very much unorganised segment (i think so). In last 10+ years i do not remember of buying wheat and going to floor mill. We buy readymade atta. The main brans i saw in this 10 years are
1. Shaktibhog
2. Ashirwad
3. Pillsburry
You product goes in HORECA (Hotel, Restaurant and Catering segment), Retail and Modern trade.
As per your post, there are two segments, excluding HORECA.
1. Retailer – volume per retailer will be less however the market size is very big. Brand loyalti is low. You need to have strong / big team on field to cater and market your product.
2. Modern Trade – Bulk volume per store / company and brand loyalti is very high. Also they run very much schemes on Atta… Like the one Big Bazaar running recently on Aam and Atta. Also you will have to negotiate hard. Credit business.
Looking at the current market i will advise to tie up with good modern trade businesses like D Mart good and timely payer. Go to tier 2 & 3 cities. Placement of products will be easier and cash flow will be good.
Also, enter into HORECA, this will not give you immediate branding help. However you will get volumes to big extent.
Tried to sharee my understanding of FMCG market.
Wish you all the best ! Hope to Say soon that “Hum Gilda G ki Chakki Ka Atta Khate Hain”…. Ashish S Parik, the cakeman who deliver feelings.
asha chaudhry
awesome suggestions ashish!!
tier 2 & 3 cities is the way to go – and the D-marts/vishals/are guys to approach!!
harsh – i’ve noticed up north – shaktibhog is very popular
parul sharma
Like most We get Ashirwaad at home though I am not that brand loyal if you can give me a competing price and good quality I would not mind. I would suggest you try free samples, it is usually the way i try new products.
All the best
Parul
Harsh Gilda
Thanks All,
Its very encouraging. We have a good product. Our success will be decided by brand placement. I do have one question, how do you select flour ? Do you see a brand in supermarket and buy it or is it a certain price point. for example Ashirwaad has 3-4 variants starting from Rs 26 a Kg to Rs 58 a Kg. Or you are aware of types of wheat and how they taste?
Karan Pandhi
Hi Harsh,
Well my maternal family is into the wholesale business of grains, so we buy from there and we at home have a small grinder for the grains.
So hum ghar ki chakki ka atta khate hai. The brand I don’t know but its similar sihor brand something of those sorts.
Will reply you soon with the brand or quality we have.
Warm Regards,
Karan Pandhi
T: 9699-246-444
Harsh Gilda
Yes Karan,
We also buy from Sehore market and it is the same. Sehore has the best Sharbati wheat all over India
Natwar Maheshwari
Multigrain atta for us as well.
I do not believe price difference is enough to make any kind of dent in this space, especially for upper middle class customers.
From comments here, I believe you have one more question to answer, do you want to sell a LOT of atta and make money right now, or do you want to build a brand, invest some money and are ok with returns in few years. Because I believe path/actions for both of above options are different.
All the best 🙂
Harsh Gilda
Natwar I want to create a brand, Profits will come later, Branding is my Priority
Atamjeet Singh Bawa
See, all I know is that my wife is very particular about the Aata (Shakti Bhog) quality. If your brand’s quality is good, there will be buyers.
We recently switched from a regular brand of basmati rice to a ‘Dehradun’ based basmati rice and that is much better in quality, taste and fragrance. And I have received similar reviews from others who have started using it after our recommendation.
Go for the quality, people would love to switch from their regular brands to a better one. An add on would be to reduce the price a bit (if you reduce the price significantly, then people like me would think “arey sasta hai to acha nahi hoga”).
Let us know once its launched, we’d love to try that out 🙂
Alok Rodinhood Kejriwal
Awesome awesome ask!!!!!
Tejas Patel
Not answering your question but adding my observations:
– Aashirwaad is not only a famous brand in India but also abroad. Aashirwaad have to be one of the biggest sellers in Indian/Pakistani consumers in Australia.
– Aashirwaad is also being sold at Australian retail shops now (Woolworths) as people want to buy wheat flour and just not white flour and it is selling fast
– People in my group will go with Aashirwaad even though Pillsbury might be cheaper by 50-75 cents cheaper. They go by the better packaging and the information on the packaging which says “extra iron” etc.
Unwarranted idea – would setting up a export channel and compete with Pillsbury/Aashirwaad be an idea to explore?
Cheers,
Jitendra Chaturvedi
I wish the game was this simple. (Sigh)
Harsh, this is a long play; you’d need to stay course for years. In my experience and judgement I’d say:
The modern trade route:
The GT route:
DO NOT USE SOYA. I have huge experience with this. You can not add more than 10% of de-fatted soya flour in any case. Even 10% changes the look feel texture of the roti.
Whatever you do, have a lot of (years of) patience.
Mukul Bhartiya
I am sharing my points with experiences I had handling Staples Category with Reliance Retail and Aditya Birla Retail Ltd.
I often share this experience with mine whenever I talk about my organized retail experience with anyone. I was working as Category Manager-Staples with Reliance Retail for Rest of Maharashtra location and we were launching our Nashik location, which was categorized as B class city. We had both national (Ashirvaad, Annapurna and Pillsburry) and local( Samrat only I remember right now) brand atta in our store. Apart from all these brands, we were launching one RJ Gold Atta, which was coming from local influential business family and as a promotional strategy, we were selling it at Rs. 51/- for 5 kg while next price point was somewhere around Rs.75/-. On the launch day, I was standing outside our Gangapur Road outlet (this is one of the area where rich and influential people of Nashik live) and I saw two big car(Mercedez) stopped in front of us and occupants of those cars got down. By appearance, I could make out that they were owner of those cars. As their profile seemed to be big, I followed them in the store see their buying behavior .To my surprise they picked up the RJ Gold atta instead of national brands like Ashirvaad or Annapurna. It was quite surprising for me, but I could not muster the courage to ask them the reason behind it, thinking it will be wrong to do so. But all the time I was thinking that how cheap they were in buying something which was probably for middle class and lower middle class consumers. I was stationed there for few more days and I found one of them again in our same store after couple of days, looking for same atta. Since price point was very low as compared to other brands, we had exhausted all our stock taken for the purpose of promotion in first two days and we had none that day. I asked him why he was looking for same brand and I also prompted him buy another brand. He purchased the other brand as prompted by me but his answer was an eye opener. He said that he was looking for RJ Gold because it was ‘fresh‘. My takeaway from that incident was “consumer prefers ‘fresh‘ atta’. I left food retail in June 2010 and after that incident, I made it a point to every atta supplier of mine that they reduce the delivery time between their factory to my stores.
Another experience I will share is of Mumbai. I was with Aditya Birla Retail Ltd and I was heading pulses category at national level. We were launching a store in Raheja Vihar, Powai. Since prior to moving to national profile, I was Category Manager-Staples for Mumbai location, I was deputed to oversee this store launch from staples perspective. I prepared all the SKU list and promotions taking the profile of Powai consumers into the picture. It was all high end products like organic foods, olive oil etc. But the biggest selling item was a combi offer, which had ‘2 five kg basmati rice, 1 five kg private label atta, 2 one litre sunflower oil and 2 Kg sugar’ and was priced at Rs.499/-. I had reluctantly put this promotion in that store assuming that I will be blasted for belittling the profile of our consumers. To my and everyone’s surprise, all the stock was sold out by afternoon and to address the demand, I had to bypass all the set rules of stock movement from supplier to DC to store. My takeaway from this incident was “it is very difficult to measure a brand performance in commodity market; consumer will not pay you extra until and unless you show them more value than what they are paying”, otherwise they are happy buying what everybody else is buying in the market. Price matters most in this market and that’s why 10 KG SKU is most sold item in packaged atta; it contributes roughly 55% of total atta sales, including all wheat items like maida, daliya etc. National brands also offers back margin and have a promotion schedule to push the sales. In every big city, there are few local brands and they contribute more than 50% of total atta sales( it will be more than that). So pricing is one very important factor in this product category.
The differentiators which I can give you to target the upper middle class consumer segment are:
1) Freshness(how quickly it is delivered at the store from the point of production)
2) Health (Like multi-grain: different combinations like wheat and soya, or wheat and horse gram etc or organic)
3) Best quality (like Shehore….. general perception in the educated consumers is that atta made from lokwan wheat is not good when compared to atta made from shehore wheat)
But after doing all these exercise, you market size will be somewhere between 15-20% of A+, A and B+ catchments of cities like Mumbai, Bangalore or Delhi-NCR. Entire city will not behave in a homogeneous manner. If your catchment is typically Marathi or Gujarati, then irrespective of the socio-economic status, their preference will be more towards freshness of the product that’s why Pune still has many small floor mills in old marathi catchments.
If you can plan your production and distribution well to reduce the delivery time to point of sales, keep the price comparative, communicate all these points effectively at store level through standies, floor stacking and promoters etc., then you can beat all national brand hands down. Atta is the destination SKU in staples category and more than brand, price and quality matters here. I have spent around 7 years in food retail and I have interacted thousands of customers personally across Northern, Southern and Western part of the country( Delhi-NCR, Pune, Mumbai, Nashik, Nagpur, Banagalore, Hyderabad, Chandigarh, Kolkata are few of the cities), I have not seen any consumer walking out of my store if she has not got her brand. If store staff informs her about the benefits of other brand available in the store, she prefers to go with the opinion of store staff.
Rajan Mariyan
I liked your suggestion, please share your mobile number as we are also launching a new Atta Brand in Pune
please call me on 9850032220 or share your contact number
kinnari thacker dave
The last mile insights by Mukul are amazing. & while entering the market, you would surely match dealer schemes, price points, etc with the trade benchmarks.
But while going to the market it’s essential that the brand [at this point the product name] captures consumer’s mind share. Why would the consumer buy ?
Regarding “Sharbati” wheat quality. I guess you would have first mover advantage if you can get the message right. Very much like Tupperware did.
& while you choose a name make sure it rings with the target group. Do a small litmus test with various names, followed by packaging options & the communication. Its good to double check.
This can go on & on 🙂
Ravi Thakur
I remember buying 44 KG [Joint Family 🙂 10-12 days consumption] Packet of Shiv Shakti Aaata from a local Kirana Shop at my home town a place in outskirts of Tinsukia- District, Assam, till my HSLC. Then I moved to Dibrugarh City, ASSAM, where I use to live with my uncle and did all grocery shopping, which included buying ASHIRVAAD, since my Aunt is a working professional she preferred it for two REASONS – 1. Affordable Brand and 2. Not needed to ….. (Missing the english word) “Chalna nai Padta – It’s Clean”.
Also I happen to be in Gorakhpur-UP my grandpa’s place , there we have our own Paddy Field and the only thing what we have to do just go to flour mill and get the output.
And Since last 5 years in Bangalore, I have been loyal to same brand that I ate in my Uncle’s home, ASHIRVAAD, day before yesterday, I bought 2 KG loose Aata (Local) Since my nearest KB’s Fair Price (Future Group’s) asked RS. 330 for 10 KG Packet, same Packet I use to buy from a nearby Marwari Kiraana Store at Rs. 310, though there were other brand of AATA at Rs. 280-300, I didn’t preferred.
To Save this Rs. 2/KG , I bought a AATA which I am thinking ki kab Khatam Hoga- So to buy ASHIRWAAD, since I don’t have a chalni (I am a bachelor, I cook my own- Its hard to get good Roti in Bangalore – Moreover eating out daily in Hotels is a big ??)
SUMMARY:
So, if you are reading this, I thank you for your time. Below I summarize my POV
1. Its very difficult to bring down brand loyalty ( I know Manufacturer of Branded Jeans- Levi’s, even they sell same Jeans without Tag of Levi’s- I am not satisfied wearing same- I have one)
2. Geography wise Markets changes drastically (My movements from one Geography to Other is Ex. – Food Consumption specially
3. Pricing Matters ( So you can make entry in Middle Income Group & Lower Income Group- Segmentation is Important – Only one segmentation will be dangerous – But till Now I was unaware of ASHIRVAAD’s So many Segments, just googled – I knew 10KG Packet for Rs. 310 that I consume)
5. Freshness (Some Rodinhooder suggested in previous comment)- Since when I pour 10 KG in my Dabba- It stays fresh for one month- Other Aata in same dabba (Air tight) gets dump in one month. * I consider this as freshness and as a best buying practice I check use before date/Mfd date for FMCG consumables.
6. Small Packaging for Samples ( Asha suggested) : I am ready to try 2 KG packet but if you price it like local Aata Brand (Rs. 25-30). Since I have never used the same AHIRVAAD aata in 5 KG packaging due to it cost more (almost double)
7. Without good Supply Chain Mechanism , it will be difficult to Brand. Your Channel partners needs to support you (You need to give them Quality for fast consumption and high Margin initially) So, get hold of Retail Chains and plan from now.
8. Once your Aata Hits Bangalore, Informed , I will try first (If it matches Ashirvaad’s quality and + competitive price I will not have problem in switching)
All above points are my personal view as a consumer. I am even ready to circulate questionnaires in retails chains- To Aata consumers and as a Rodinhooder to help another Rodinhooder I am always open for best possible help.
Thanks and Regards
Harsh Gilda
Mukul all your points are valid and thanks for a detailed analysis. We want to start a 2 pronged strategy. 1 is to continue selling our ATTA as an unknown player the way we do and start our branding process simultaneously. My thought is to supply it to one city and build repo. And then move to a bigger market. And as far as ATTA is concerned we try to keep as lean inventory as possible and meet requirement.
Harsh Gilda
Thanks Ravi, We will surely take into account. Our Atta is Chalni clean. And we want to keep as lean inventory as possible
Ravi Thakur
You are welcome Harsh… Wish to see your brand soon..!!
Jaykishan Prithiani
Hi Harsh
It would not be a good idea to go above price range comparing with current brands at initial stage, higher the price at this stage will lead to lower the sales. you have to feed them, habituate them and then raise the price to be in competition.
packaging will go along with quality. So do keep that in mind too 🙂
Sanghamitra B. Jayant
Dear Harsh,
As you say that your target customer is upper middle class and above, my suggestion would be to introduce your product at the same price point as Ashirwad and arrange for promotions in the form of free samples, ” roti-tasting ” at Big bazaar or similar outlets etc. I understand, your target customer is more motivated by quality than price… in fact a low priced product may be perceived to be of lower quality. In North India – ” Rajdhani” has become popular in the last few years… they sell atta, dal etc… inspite of being a small brand, they maintain good quality and that’s what have made them popular…. in terms of price, Rajdhani products are at-par/costlier than Tata I-Shakti.
asha chaudhry
hey harsh….
have you been able to move further yet?
do update us – we’d love to follow your journey!
Amit Shroff
Hi Harsh,
I used to buy Shaktibhog, Ashirwaad etc earlier but now we pickup atta from a local retailer. He keep fresh atta and it doesn’t have maida in it. We noticed quality issues with branded atta hence we shifted to a local.
But if you have to ask me about price and quality. I would pickup quality. If you can deliver a good quality with less price (less marketing cost), i think it can work.
It could be by distributing free samples to local and let them use your product and feel the difference. Quality remains the key. Think of innovative ideas to promote your products like buy back offer. May be get a kg of old atta and get 20% off on our atta, no one has ever done it, but no harm trying it. or may be get a packed of your atta brand and get 10% off. There could be endless ideas, and digital is doing great.
Additionally why do you want to sell it with online store, they will not sell it free and would charge you high commission, instead pass this to your customer.
In case you need our support do let me know – 72interactive
Regards,
Amit
Harsh Gilda
Hi Amit,
Amit Shroff
Hi Harsh,
Cool. I hope my feedback helped you. I can help you with Branding, Logo, Website and Basic Packaging Style, for rest I will see if I have some contacts.
For above requirement you can email me at sales@72interactive.com or visit https://www.72interactive.in to know more about us.
Regards,
Amit
Harsh Gilda
Hi Asha,
I have not been able to move an inch. As i mentioned earlier ours is a typical marwari family its difficult to convince my father and uncle. They have given me another task instead. They have asked me to arrange for packaging material for another product(‘Museli” generally used in home made medicine post maternity) and prove it a success. We already have a packaging which is not that great. Also I am currently working in Delhi as an Analytics consultant for CPG. My father wants me to stay in Delhi and watch how world is changing around and get some exposure then start working in family business.
Harsh Gilda
Yes Amit sure will let you know
Tarun
It’s a mammoth challenge to compete with established brands. Quality is a very vague phenomenon and it takes hell lot of efforts to beat big brands in quality game.
You may try some unique way to compete with big brands. You can devise a USP which is untouched by brands and then create a niche for your brand.
We get MP wheat and grind it at home because my mom says in the mills flour is packed before it cools down. Because of packing warm flour, the dough looses elasticity.
You may play on this point.
Or you can tap young couples who don’t cook frequently. If they buy 10 kg aata it lasts for around 2 months. So u may come with small pack and play on freshness point.
Or a unique packaging material (say non plastic) can create a high recall value…
asha chaudhry
happy b’day harsh!
hope all’s well and rocking at your end. would love to hear an update from you!!
have an awesome one!!
Harsh Gilda
Thanks Asha,
Family businesses are difficult to change.
Have started logistics marketplace http://www.futuretrucks.in
Will share a good news soon
ALOK SHARMA
Hi Harsh
Greetings.
I am also a Asirwaad buyer , but at my home my parents used to buy SHARBATI wheat so i know the Quality.
Well you already have lots of suggestions from our friends.
I will just suggest one.Its really hard to enter into supermarkets or stores and at the same time you have to compete with well established giants like ITC and others.
I suggest you to target Defence Canteens.They are not very brand conscious , and if you are supplying good quality at good price they will be easy to crack.
Also if you are able to enter , the volumes will be very big so will be having economies of scale.
At the same time you will reach one of the best in class consumers.
ALOK