How Wipro’s foray will add to the flavour of the snacking category?

Most brands always think twice to venture into any new business area other than their core business. Brands are always conscious to keep the mother brand and product well-guarded while entering any new category or creating a brand extension. But recently, consumer care and cosmetic company Wipro announced its entry into the packaged foods business for owning a larger stake in the FMCG market pie which is an exciting move. While Wipro as a brand has a got a good presence in the cosmetic and soap marketbut the move to the snacking market looks like that there are big plans as the snacking market is still growing especially after the pandemic. The company, with a revenue of Rs 8,634 crore for the last financial year, aspires to become a “significant player” in the snack foods, spices and ready-to-eat market.

The pandemic has really brought a change and there has been a definite shift in the way consumers across India are viewing their lifestyle and deciding on their food choices. And actually, the shift in the perception is more pointed toward the younger Indians in the age group of 16 to 35years who in the past have been snacking any products have now become more conscious to improve their eating habits to stay healthy.

According to a survey conducted between May 5 and 25, 2021 by research consulting firm Ipsos India, 78% respondents feel healthy snacking is important (Very important (58%) and Fairly Important (20%) amidst changing lifestyles. The quantitative survey by Ipsos India aimed to identify the changing snacking habits and preferences amongst India’s urban youth amidst the evolving modern lifestyle. Overall, the survey results showcase how increasingly younger people in India are becoming more concerned about their health and this is propelling them to change their snacking habits. The survey highlights how younger people across India, are increasingly opting for healthy and nutritious snacking options like almonds and fruits, instead of high calorie junk foods.

If we go back to the 70’s Wipro has the legacy of being in the packaged oil business, when their iconic vegetable brand Sunflower vanaspati was well known. The brand was positioned for decades as the “next best thing to pure ghee”. With their vast experience in the FMCG category and their huge distribution strength they will try and reach their products to the last mile. But what is under wraps is, what would be their product mix and how do they plan to position their brand and work on their pricing strategy.

When Adgully reached out to Wipro for their comment, the company stated that at this juncture, it is too premature to talk about category or product specifics. “All that we can comment is, our decision to enter packaged food business would complement our existing categories in personal care, thus building a truly complete offering in the FMCG space in India. We have an ambitious plan to be a significant player in the country’s $13 billion food market,” the company informed Adgully.

Sharing his thoughts and views on the snacking sector in India, Lloyd Mathias, Business Strategist and a former senior marketer at PepsiCo, Motorola & HP, observed that the Indian organised snack market has been growing at a healthy pace and received a bump-up due to the lockdowns during the course of the pandemic. Estimated at â‚¹ 41,000 crore, the market is dominated by PepsiCo’s Lays & Kurkure, ITC’s Bingo, Haldiram, Bikaji, Balaji, Prataap Snacks’ Yellow Diamond, DFM Foods’ Crax.

While the national players have strong distribution, varied price points and a wide favour range, smaller regional players are gradually gaining ground on the back of competitive pricing and regional flavour variations. The consumption of package snacks is growing due to hygiene factors, ease of availability and a rise in disposable income.

He further commented that, “Wipro’s entry into the market is a bold move, but not altogether surprising. Wipro’s consumer business has long held its own in two distinct FMCG categories – lighting and personal hygiene – with Santoor soap as the second highest-selling soap in the country. They have deep distribution muscle, staying power, consumer insights and understand the nuances of FMCG distribution. Understandably they would eye the large and growing market opportunity and would be keen to grab a share.”

Their entry will naturally increase the competitive intensity of this space, especially with regional players upping their ante.

According to Krishnendu Dutta, Group Service Line Leader, Innovation, Market Strategy & Understanding (MSU) & Strategy3, Ipsos India, it is an interesting decision for Wipro to enter the highly fragmented snacking category in India at a time when inflationary pressure on the consumer is forcing a cutback in consumption across categories. The category received a boost during the pandemic, with enforced work from home routines leading to increased snacking. The period was also characterised by consumers experimenting with a broader flavour repertoire and “healthier” snacks.

Many players have attempted a foray into snacking in the past; sustained success has proved to be elusive in many cases. Guiltfree Industries’ Too Yumm was a relatively successful launch, built on the promise of healthier snacking, supported by significant media spends and a celebrity led creative strategy.

Meaningful differentiation will be a key for Wipro to succeed. The “Healthier” promise does attract attention, but it is useful to remember that the Indian consumer is not known to compromise on taste, especially whilst snacking. Given the inflationary times, pricing will also play a key role – a significant portion of the category continues to operate at the Rs 10 price point. Wipro’s channel strategy will be interesting to watch; the ever-burgeoning e-commerce space offers interesting trial generation avenues, but the humble kirana store is still very important for mass success.

Krishnarao Buddha, Senior Category Head, Parle Products, affirmed, “We will stay relevant. It is extremely important to remain in constant touch with consumers, listen to them and understand the unarticulated needs and gaps. This is then followed by aligning our strategy in line with our consumer expectations. The conquest for a better consumer understanding has always helped us stay relevant with our consumers and propelled us to grow our product range.”

He further added, “We will continue our consumer orientation besides our focus on innovation in every area of business, including product, packaging, sourcing of ingredients, etc. We will continue to explore opportunities in every segment and provide offerings to fill the need gaps in the consumer’s life.”

In any field, competition will keep happening, especially in a country like India. As we all know that competition is always healthy for any category development. Entry of Wipro in the snacking segment will incite consumer attention and help build the category. It will be interesting to see the offerings from a brand of such repute.

Jay Sachdev, Manager Marketing, Balaji Wafers, noted that the snacking market in the last decade has made a rapid change and progress. The category has seen lot of action and activity in the last couple of years and has a huge potential to grow. Companies and brands with strong marketing and distribution strength and who are able to bring in innovative product offerings to delight the customers will be able to withstand the competition and grow their business as the category is in its growth trajectory.

“As a brand our offerings extend to both traditional as well as western snacks range in the market with tasty flavours. With our 46 years of experience in the snacking business, our founders have perfectly understood the kind of taste and products the consumers would enjoy across markets,” Sachdev added.