AgTalk | Rising disposable incomes and urbanization, we expect the market to keep evolving: McCain's KS Narayanan

McCain Foods, the world's largest producer of French fries and frozen potato based products, entered India in 2007. Little did they know that McCain products- Smiles, Super Wedges and French Fries, tailored products for local Indian tastes including products like Mazedar Aloo Tikki, Tandoori Vege Nuggets, and Chilli Garlic Potato Pops are the new favorites at restaurants, especially with children. With the frozen food industry just taking shape, McCain Foods India, already has a strong hold.

In an exclusive conversation with AdGully, K. S. Narayana, Managing Director, McCain Foods India, speaks about the brand, its products and shared some of their strategies and plans for the future.

AdGully (AG): What do you think is the market size of the frozen food segment in India? What shall be your market share in it?

K. S. Narayanan (K.S.N): According to market estimates, the branded frozen foods market in India is pegged at Rs. 1000 crores. However, the frozen food market in India is at a nascent stage with few products, low consumer awareness levels, underdeveloped frozen food distribution network, and lack of freezer space at the retail end. India is a significant market and provides a spectrum of business opportunities for McCain. Today, McCain's business comes from a) Institutional Sales - with customers in leading national and international QSR (Quick Service Restaurants) and HORECA (Hotels, Restaurants, Caterers/ Canteens). b) Retail Sales -our products are available at modern trade outlets as well as at local shops selling frozen food products in convenient small packs. c) Exports of our "Made in India' products are being widely accepted across the world.

AG: In India, fresh home cooked food still holds high importance. How do you plan to change this mindset and make McCain frozen food products reach the consumer?

K.S.N: Frozen foods are a new category for Indian consumers and they are getting familiar with it. Our research with consumers shows that consumers do have misconceptions about frozen food, particularly they are not aware of the benefits that freezing as a method of preservation offers. Secondly, at McCain, we actively participate and engage in industry specific seminars and forums. Besides this, McCain is also engaged in organizing large scale sampling and consumer contact programs to educate customers and break barriers towards adoption of frozen foods. We believe affordability, variety and availability will be the key strategies to grow in the market. Tailoring products to local preferences, sampling and expanding the frozen distribution network to make McCain products widely available at multiple retail points will be our focus to reach the consumer.

AG: What according to you are some of the challenges that India as a country poses for McCain Foods India?

K.S.N: The frozen food market in India is at an embryonic stage and is faced with numerous challenges. Firstly, there are few players in the frozen foods segment in India and therefore frozen foods (excluding frozen vegetables) penetration as a category is extremely low. Secondly, there is low consumer awareness about frozen foods. For the Indian consumer, frozen foods is a new category altogether and they are still getting familiar with it. Thirdly, the lack of good cold chain facilities is proving to be a disadvantage for companies like us to grow the market for frozen foods. And lastly, lack of freezer space at the retail end is also presenting a challenge to frozen food companies.

AG: Tell us a little more about the distribution process. Is the focus on bigger metro's or do you plan to take it smaller towns as well?

K.S.N: We have a highly specialized cold chain distribution network in the country which is spread across Tier I and select Tier II cities. Going forward, we are intensifying our distribution. We are currently present in more than 50 cities across India and are expanding our distribution network as well as increasing our presence to fill in the gaps. McCain products are available at modern trade outlets as well as at the local shops selling frozen food products. Though infrastructure constraints make it difficult to expand at a faster pace; we have been strengthening our cold chain network and would like to reach untapped markets. Also in the area of retail we have introduced trial packs at Rs. 25 which enables the consumer to try out different products and significantly reduces the cost of trial and reduces the risk of failure.

AG: Can you share with us some of your marketing strategies?

K.S.N: Affordability, Variety and Availability, are the cornerstones of our marketing strategy. In fact, localization is a cornerstone of McCain's India-specific strategy. We continuously work with our customers and keep track of the evolving trends and based on the assessed requirements, we attempt to develop customized products and solutions. This is done by our research and development arm which is continuously engaged in trials of new product offerings in the market. We have also introduced trial packs at Rs 25 to encourage the consumer to try out frozen foods, thus breaking the barrier towards frozen foods. Further, we have launched our first advertising campaign in India (using both print and electronic media). The ad campaign is just an extension of the communication that we have been doing in building the nascent but small category of frozen foods in India.

AG: What are some of the communication strategies adopted by McCain Foods?

K.S.N: A combination of ATL and BTL activities, which complements each other, is being adopted as an approach to provide a superior platform for consumer involvement which is of utmost importance in this category as it harmonizes the efforts of both the activities. Thus our overall brand marketing constitutes of the following initiatives:-Consumer education and Product sampling, Consumer contact programs/ events/ exhibitions, Point of sale communication in both Food service and Retail and Mass media to create trust and credibility in the brand and ease process of trial.

AG: Although competition is non-existent, what according to you sets you apart?

K.S.N: We operate in the snacking segment and thus our competition is really anyone in that segment. Affordability, Variety, Availability and differentiation through brand, are our key strategies that set us apart and will help us grow the market. We plan to stay differentiated by offering unique products that offer convenience to our customers. Having built a sustainable Potato supply chain, access to world class technology and by remaining close to our customers we continuously develop solutions for our customers. Though the competition is growing gradually, the frozen food market is really at a stage of evolution, so I guess the more competitors the better it will be, as it will only grow the market.

AG: Tell something about the new brand campaign. What have been the spends on it? Also, what is the objective of the campaign?

K.S.N: The advertisement campaign, which has been ideated by Leo Burnett, will mark the first phase of McCain's integrated marketing communications, with the launch of a TV campaign. The ad campaign is just an extension of the communication that we have been doing in India. The ATL efforts are another dimension in this consumer engagement program, and will complement the ongoing BTL efforts. Through the advertisement we want to highlight the sheer delight that McCain products are all about ' hot, fresh, tasty and crisp. The creative challenge was to communicate the "delightfully fresh' attribute of the product and to break the consumer mindset on frozen foods through a theme which the consumers can easily relate with. The campaign is spread across all mediums including Television, Radio, Print and POS (point of sale merchandise). The television campaign will be aired on General Entertainment Channels, music and lifestyle channels, English movies and select kid channels. The company has set aside a budget for an integrated communication program. The objective of the campaign is to remove the apprehensions towards frozen foods. For Consumers the biggest surprise is that frozen food is that it is actually "fresh". This is also evident from our campaign tag line "McCain, Fresh Banega, Baat Banegi'. The objective of the communication was to reinforce McCain's range of exciting and innovative products is a fresh reason over which the family re-bonds.

AG: What is your take on the frozen food segment in India as a whole? Where do you see it heading?

K.S.N: The frozen food market in India is still at a budding stage with few products, a comparatively low consumer awareness levels, not so efficient frozen food distribution network, and lack of freezer space at the retail end. In the last few years, Indian consumers have gone through a dramatic transformation in lifestyle and food products consumption patterns. The demand for "convenience food' has supported good growth in frozen foods, with consumers appreciating the convenience of stocking up and keeping easily-prepared food at hand. Moreover, increasing penetration of organized retail chains has aided in the demand for frozen food products. With rising disposable incomes and urbanization, we expect the market to keep evolving. Newer product platforms will be introduced and acceptance to frozen food will keep growing. It is essential to persist with consumer education and build further the cold chain.

With innovative 'Indianised' product offerings, continuous consumer research and persistent efforts to penetrate into a new market like India, McCain Foods India, is surely and positively marching ahead in the frozen food industry. | By Ankita Tanna [ankita(at)adgully.com]