Consumers are becoming more choosy: Oliver Mirza

Dr. Oetker India Pvt. Ltd. was established in 2007, and has made a mark for itself in continental condiments space. It acquired FunFoods in 2008, a leading purveyor of western cuisine in India.

FunFoods is now a leader in offering western cuisine in India. The product range includes mayonnaises, sauces, spreads, salad dressings, cakes, dessert toppings amongst others. The company is being successfully managed by Oliver Mirza, Managing Director & CEO of Dr. Oetker India Pvt. Ltd. for over seven years now. An industry veteran with over 25 years of food business experience, Oliver in his current role is responsible for managing and growing the business of Dr. Oetker in the country with full P&L responsibility.

Adgully got a chance to talk to Oliver Mirza and discuss various intricacies involved in packaged food industry, marketing strategies and road ahead for this industry.

Adgully: How far has the Indian palate changed since the inception of Dr. Oetker’s inception? And how has it impacted your business?

Oliver Mirza: Dr. Oetker entered the Indian market in end of 2007 and acquired FunFoods in end of 2008. At that time Indian consumers were still weary of the usage of sauces, spreads and mayonnaise, which are established categories internationally. The Indian palate has been evolving ever since and this change can be attributed to the increase in awareness of western flavours among consumers, the advancement of their eating habits and spurt in corporate work culture. Indian consumers are bored of their regular food and want to make every day cooking fun & desirable. From a point where Mayonnaise was considered a niche product to the current scenario where it has become a regular household condiment, the category is growing at a rapid pace.

Today, food holds a complex place in people’s lives and we at Dr. Oetker strive to address these complexities. We offer an array of packaged products like mayonnaise, sauces, savoury spreads, salad dressings, peanut butter, milk shake mixes, cake mixes and dessert toppings – across different flavours, price points and sizes.  With our retail offering currently consisting of 57 SKUs, Dr. Oetker offers eight FunFoods Mayonnaise variants namely Classic, Veg, Tandoori, Garlic, Burger, Mint, Olive and Diet, four FunFoods Sandwich Spread variants and seven FunFoods Italian Sauces.  Through our varied products and flavours we target the length and breadth of our consumers changing needs and taste buds. Owning to this strategy, Dr. Oetker commands market leadership in the Mayonnaise, Savoury Spread and Italian Sauces categories. It is our continuous endeavour to penetrate Indian households and introduce them to the Western flavours that once seemed like an aspiration.

AG: Can you define the space in which FunFoods plays? What share of market do you have?

OM: The Indian food market has been growing at a rapid pace over the last few years. The sauces, dressings and condiments industry grew by 18% in 2014 – valued at 93 billion and is expected to witness a 7% growth for the forecast period 2014 – 2019. The Food retailing sector has ballooned into a significant and profitable sector and there is a sizeable population which spends almost 50% of their income on food. Dr. Oetker with the FunFoods brand is a leading name in the condiments sector. We are the #1 player in the Mayonnaise, Savoury Spreads, Peanut Butter and Italian Sauces category. Our market shares – Mayonnaise (70% by value in Modern Trade), Spreads (31% by value), Peanut Butter (50% by volume in pieces share in handlers) and Pasta Sauces (42% by value) is a testimony of the love our products receive from Indian consumers.  

AG: The space in which FunFoods plays has a lot of competition from global players. How difficult it is to become a preferred brand in that segment?

OM: We believe the entry of quality players is healthy for the overall growth of any industry that helps in raising the bar and increase industry standards directing the players to match high quality performance benchmarks. And, this stands true to the condiment industry as well.

The fact that a number of launches across the spectrum have taken place is indicative of the attractiveness of the Indian market in the long run. India’s rapid economic growth and favourable demographics has led the market to undergo a shift that translates not only into increasing consumer demand but also a more value – conscious demand.

By leveraging Dr. Oetker’s global expertise in making food exciting around the world and FunFoods’ know-how of Indian consumers’ taste and cultural beliefs,  we have  become the market leader in the Mayonnaise, sandwich spreads, peanut butter and Italian sauces categories. The product lines of the company are equipped with international standards in terms of quality, packaging, shelf throw and is further augmented through the confluence with Indian taste palate. FunFoods helps consumers create food that is fun to eat and fulfills the family’s want for something different.

AG: FunFoods does not advertise much on television, favoured media of most FMCG brands. What is your consumer engagement strategy?

OM: Our marketing strategy revolves around ‘consumer education’ and ensuring on-shelf penetration. Reach is another main point wherein we ensure availability across more than 200 towns in all Indian states. Our intense consumer outreach strategy ensures that Indian consumers can find us in all modern trade outlets, self-service general stores and various kirana stores across the country. We have leveraged on our core knowledge of the Indian consumer and international know-how to ensure we educate consumers about the various uses of our products. Consumer exhibitions are another area that helps us reach out to the consumer and showcase the usability of the product. We still deal in a segment that is alien or unknown to most of the Indian consumers. So the education part is of paramount importance. The next 18 months will be very significant for Dr. Oetker where strategic initiatives will further chart out our robust growth plan in this dynamic market and strengthen the foundation for coming years. And TV advertising will be one of the key initiatives to engage consumers.  

AG: Would you say modern retail has worked in favour of your category by encouraging consumers to experiment?

OM: With modern retail now becoming a popular concept amongst consumers in the metros, there still is a long way for it to catch up to the rate at which international markets are moving in this category. Modern retail has discovered spreads, mayonnaise and dressings as differentiator categories against ‘kirana’ stores.

All our products have specific roles to play in the different segments they cater to and are doing well in the market. Our Mayonnaise is one of the fastest growing ranges in the Indian market today with a 25% growth over last year. Modern Trade does not grow in the same proportion. First of all the number of modern trade outlets today is less than what it was two years ago. Quite often the store personnel on the ground do not know what a mayonnaise is let alone how to use it. Although the headroom in terms of growth and penetration is huge, till now we have not been able to convince a single modern trade chain to advertise mayonnaise in their leaflets. They feel the mayonnaise category is too small. Accordingly, shelf space provided for mayonnaise is far less than for Ketchup although in the US and in Europe the Mayonnaise market is bigger than the Ketchup market.

AG: Do you plan at introducing any new brands, or extend FunFoods into any other area except sauces and dips?

OM: FunFoods by Dr. Oetker is already present across 11 western food categories incl. mayonnaise, savoury spreads, dressings, peanut butter, Italian Sauces, Mexican dips, Cake Mixes, Milk Shake Mixes and dessert toppings. Our primary objective is to increase penetration in all these categories.

AG: How do you see the western condiments market growing in India and what is your strategy to grow faster than the market rate?

OM: We are in an expansion mode and we want to grow by offering the best to our consumers. Our main aim is to reach out to as many consumers possible and give them the experience of quality products from our portfolio.  The exposure to multi cuisines, changing eating habits and the need to experiment with food has led the market to undergo a shift that translates not only into increasing consumer demand but also a more value – conscious demand. Exposure to Western food – American, Mexican, Thai and other cuisines has made international sauces and spreads a common household item. Besides this, mayonnaise, spreads and Italian sauces have also taken over ketchup in terms of growth rate and there is a growing appetite for newer flavours.  Mayonnaise along with Italian Sauces substantiate the growing consumption of sauces and dips in India. As mentioned above we are the growth engine of the market and we will continue driving the growth of the category.

AG: If we look at geographic segments or city clusters – would you say FunFoods is largely a metro brand, with most of its business coming from Western and North India?

OM: Today a cluster of our consumers lack the conviction & skills to cook international cuisines at home and hence look out for readymade solutions. With FunFoods’ range of sauces & spreads, any one from the family can turn boring food into flavoursome western dishes easily and conveniently. Working on this strategy, FunFoods by Dr. Oetker is mainly functioning in the space of urban households in metros, mini metros and tier 1 towns. Even now we are present in more than 200 cities in India which is more than the presence of any single QSR chain. We are a pan India brand with reach across all 29 states in the country. Although north and west regions do contribute to the overall business over proportionately but south and east are also catching up fast. Eating habits are changing across India so the growth and business is bound to come from all parts of the country.

AG: Health consciousness is increasing among Indians. How do you see it impacting FunFoods?

OM: More and more consumers are become highly mindful of their health, thereby becoming picky and choosy about the food they eat. Dr. Oetker being a celebrated name with 125 years of global food expertise brings attributes of natural ingredients, hygiene and safety which ensures high quality and safe   products for its consumers. With a focus on offering products that adhere to the Indian food palate, FunFoods range of sauces and spreads help create western food at home that is flavoursome and tasty. Seven variants of our mayonnaise range are cholesterol- and transfatfree. Health conscious consumers love our Diet Mayonnaise, Olive Oil Mayonnaise and Mint Mayonnaise.  Further, we have a range of salad dressings which are tasty yet healthy. Our motto is that one should eat consciously but also not sacrifice on taste.

AG: Lastly any plans to launch Indian condiments – more specifically for South Indian and Bengali palates?

OM: In Mayonnaise, we launched a Tandoori Mayonnaise and a Green Mint Mayonnaise which cater to the lovers of North Indian cuisine no matter whether they live in North, West, South or East India.  Both these products are vegetarian. Tandoori is made with select Indian spices while Green Mint contains fresh herbs. Bengalis love our Original English Mustard and our American Mustard Sauce. Neither one contains preservatives nor starch. Our Garlic Chilli Dip is relished pan-India but loved across North-East-India.

 

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