Local organic brands face threat of takeover from big players says K.C Raghu

Considering India’s has the largest population of 0-4 year olds in entire Asia, it’s no-brainer that the market size will grow to whopping to Rs 70 billion by 2022. Consistently growing at 10-12 per cent per annum, baby food market in India has rapidly evolved over the years. In an exclusive conversation with Indian Retailer, Pristine Organics founder K.C Raghutalks about the dominance of international brands in baby food segment, threat to smaller brands and how the brand scaled from Rs 2 crore to Rs 85-crore.Excerpts:

To begin with, why did you launch organic baby food products two decades ago when awareness about organic products was mostly nil?

When we launched Pristine Organics in 1997, our main concern was- the most vulnerable population for lack of food safety was the infant and toddler group. Although food availability was not a concern, food safety was. With more and more people taking immense interest in food and wanting to try exotic dishes, food standards were getting compromised. Our baby products were made to help parents make the right choices in baby food. See, for instance, although potato is not an actual vegetable, it’s sold like a vegetable and it’s abundantly available at 55 million tonne quantity. Similarly, 35 million tonnes of sugar is available in India although our consumption requirement is less than half of that. We wanted to create more awareness in parents about right choices and right food, and our organic baby food products were launched for the same reason.   

Do you think the Baby food market in India is underserved and dominated by big players like Nestle?

Partially, yes. But then again in India only 10 per cent of babies have access to commercial baby food products and thanks to continuous efforts of medical fraternity, the need to turn to organic food is getting more attention in parents from not just Metro cities, even from parents in tier II cities. The biggest threat to small players, however, is not competition from international brands, but threat to exist. Big players want to take over local brands and small brands do not have that kind of money to compete in the industry. 

But how are Indian players competing with foreign giants like Nestle, Farex? Is it tough to market lesser known brands?

It’s definitively not easy for local players. But with the revolution of modern retail, there’s space for all. The online marketing strategies have changed, the touch-and-feel experience of retail from small kirana stores to general trade and even modern trade has ensured that any small brand is available in any part of the city, and of course online retail has been a game-changer, but that’s in parallel an alternative story altogether. However, different marketing strategies have helped even small brands scale.

But why this sudden demand to buy only organic food, whether for babies or adults?

Well, to look at it in a broader perspective, people have become more ecologically sensitive which is giving thrust to organic food. We never discussed plastic, global warming or weather change to this extent the way we do now. Globally too, attention has always been paid to organic food especially for babies. In Europe, for instance, baby food has to be organic or close to it; or it can’t be sold at all. Now, in India, with more awareness, more disposable income and higher spending capacity of women, and maybe even people paying attention to quality of life as we now live longer, people are turning to organic food.  

What is your growth strategies considering there is a lot of competition in this segment and threat from bigger brands?

We have mostly remained with offline retailing because we realized our growth opportunities were better here than with online. We have also localized our products according to the region and this has received good response from our customers. We have 12 variants and we are mostly present in Southern cities. Soon, we will be expanding to more cities in North.

How have you scaled both offline and online? Is the demand high from online consumers than offline?

No, the demand still comes from offline consumers. While we closed Rs 2 crore last year, we will be closing at Rs 85 crore this financial year. There are still immense opportunities to grow and we are looking at major expansions.  

What are your expansion plans?

We are present in Malaysia and will soon be present in Dubai, so global expansion is happening. In India, we have mildly marketed our product in North but now will focus on aggressive marketing strategies. We targeting to close Rs 100 crore and will then look at raising funds for further growth.