Why Pansari Group Has Decided to Enter HoReCa Business
Why Pansari Group Has Decided to Enter HoReCa Business

The fourth-generation business Pansari Group which is among the largest manufacturers of edible oils in India has recently been working to diversify its portfolio. Firstly, it entered into the rice and flour category because it wanted to target zero GST and then value-added products. Recently, the brand has been working to build a totally new business model by getting into the HoReCa business. 

The brand understands the fact that the last three years have changed a lot when ready-to-cook food has become very popular and where everyone has become sort of home-chef post-pandemic. 

Shammi Agarwal, Managing Director, Pansari Group said, "We have focused upon ready-to-cook, and once we have built the HoReCa network we will bring the solution-based products for hotels."

In terms of overall performance, the company has claimed to be growing at a very good pace: last year it clocked a growth of 32 percent YoY. 

“Since we have launched a lot of products recently with respect to the consumer market – we need to geographically diversify for the next 1-2 years our major focus would be on that. And at the same time, we have launched HoReCa products, once we have built the network, the brand will enter into the HoReCa range very fast,” Agarwal further stated. 

Market Challenges

Dealing in the FMCG business, the firm has been struggling with inflationary challenges as the working capital has gone up: raw materials costs and procurement costs. For instance, over the last quarter, prices of commodities such as crude oil, crude-linked derivatives, packaging material, spices, palm oil, and skimmed milk powder have surged by 23-42 percent, according to a report, while freight costs have shot up by three to four times. Also, the firms have been struggling with the supply chain since they have to make sure the product is available all the time. 

Talking about the challenges, Agarwal stated, “For that fast decision is very much needed. So we have to deal with the exposure risk better. And, we have to act very fast. Every day new things are coming be it politically, government policies – things are moving at a very fast rate after Corona.” 

Countering the Challenges

The brand claims to be having a strong R&D set-up with respect to other companies in a similar category. Also, inventory management is revising very fast. 

In response to the external factors, the brand is very proactive in dealing with them. 

"We are majorly into commodity business: Rabi crops and Kharif crops. We have over 350 SKUs and if we include the raw materials, there are 1,000 of products. For, managing each of one of them with respect to the benchmarking of the quality of the products, for that, the team is there," Agarwal shared. 

Pan-India Positioning

Given the brand has a wide range of products available across India, the brand has to work on its storytelling to cater to the local audience.  

Agarwal explained, "Marketing is competitive across the world: only the product strategies change (for instance, in the South we have to focus on rice; oil in the North). If it is positioning of the brand, under Pansari we have 5 or 6 brands – which we have positioned differently." 

Also, the brand does a lot of exhibitions: B2B or B2C exhibitions. In B2C exhibitions, the brand gets customer feedback (international and domestic) and the B2B is more about getting good clients. 

B2B is not even 10 percent of the business. B2B is more about brand building and our focus is more on B2C. 

The brand is not very strong as direct-to-consumer but are products available on online marketplaces like Blinkit, Zepto, etc. Only 10 percent is online and the rest is offline. 

"YoY online share is increasing at a very good pace," the company reported. 

Future Plans

Besides the plans of exploring the HoReCa business, the brand, which primarily was based out of North India, has now been focusing to expand into the South and the East as well. Overseas, the brand is already exporting to 54 countries. 

READ MORE: As Inflation Soars, FMCG Manufacturers Are Opting To Reduce Product Weight Over Price Of Items


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