Licensing - Private Label combo hits the bull's eye

Studying markets and developing strategy accordingly is the key survival mantra for modern retailers. This particular exercise mostly includes addressing different need gaps like price points, innovative SKUS, tapping into community products, popularising under-penetrated categories and so on. And the dynamics involved are varied as well as interesting. It is the store where the rubber meets the road and where the purchase decisions are mostly taken. Also modern trade is where more target audience can directly engage with their products and brands. The strategy is to equip oneself with relevant consumer insights and enrich the engagement factor with the consumers in the store.

 

Breakfast cereal: potential space

Breakfast cereals category is one such case in point. Breakfast cereals market size in the organised sector is pegged at around Rs 300 crore, with an average CAGR of 20 per cent plus, for the last three years. And nearly 40 per cent of the category sales happen through modern retail (source ACN).

 

However, despite such heavy skews in modern trade, breakfast cereals’ bill penetration is around only 2 per cent, signifying huge growth potential across channels with modern trade leading category penetration and trials. It is indeed one of the heavy weight categories of modern trade and can be estimated to grow exponentially in the times to come.

 

The category is broadly split into - Adult (plain flakes, oats, muesli, etc) with 65 per cent sales weightage and Children’s range (flavored variants like chocolate, honey, etc) with 35 per cent sales weightage. While the consumer usage habits for adults are - they see it as convenient, ‘ON THE GO’ breakfast option with minimal preparation time. More so, a lot of influence has come via media, social networking and so on.

 

And as far as children are concerned, this product has a very high point of interaction with the TG by the virtue of exciting flavours, shapes and freebies, etc. This rather makes the role of a mother as an efficient nurturer a tad bit easy. To make a child have a glass full of plain milk is much tougher a task as compared to its inconspicuous consumption through a bowlful of corn flakes mixed with milk. Adults also have the flavoured variants for variety, and children have the plain range with honey as an additive.

 

This category is poised for further penetration on the back of impending new entrants, penetration into more cities and outlets through small packs. The potential to grow consumption by adding new users to the fold is imperative given the scenario.

 

Another key transition that has been witnessed is the overall health awareness. However, Indians are strongly glued to their traditional snacking options driven by their palates. A lot of general awareness has set in with the consumers when it comes to a tradeoff between taste and nutrition. While one may find this strictly limited to categories of ‘grown ups’, even the likes of noodles and biscuits are heavily skewed on the healthy platform - atta noodles, multi grain biscuits, suji pasta are some examples.

 

Tasty Treat Corn Flakes: fill in the blank

Tasty Treat, a popular private brand of Future Group of discretionary pleasure foods, forged a partnership with Disney for three of its top selling corn flakes variants. The partnership had two considerations to it a)  on the functional level there was a product made available for fence sitters looking for healthy breakfast  and b) on the emotional level, Disney characters gave that much desired engagement value by creating pester power with the kids. So, on the overall platform, the proposition was a win-win.

 

Consumers were positively predisposed towards Tasty Treat because trust already being established due to its presence in many other categories and using Disney characters further heightened the interactivity of the brand with the relevant target group.

 

Marketing initiatives

The launch was backed with a strong incentivising offer. A bowl to enable the category consumption was given free with every pack alluring mothers for trials coupled with persuasive in store visual merchandising and activation involving Disney character for kids’ pester power, where Mickey character interacted with the kids in the stores. And all these were backed with dry sampling exercise. 

 

The key is to keep the excitement alive by engaging with the kids through the means of differentiated promotions from time to time, which renews their interest in the product. One of the recent promotions done where Disney movie CDs were given with the packs. For kids, it was an outright relevant combo and for mothers it was an equally easy sail through as the overall promotion gave them tremendous value for money with the freebie being of great value and utility.

 

More in the pipeline

Banking on this success, Tasty Treat -Disney partnership will further see launches in two other interesting categories - Jams and Instant Pastas soon.

 

Instant pasta is following a similar trend as instant noodles. Unlike earlier, instant noodles has become a staple diet. Similar in times ahead instant pasta is intended to follow the same trend. Instant pasta saw only one player dominating the category; however, now the competition is steaming up with multiple players having entered in. This category will witness similar dynamics to the instant noodles category especially with consumers are open for variety. As it is targeted towards kids, the pasta has been made of 100 per cent suji (semolina). This will help ride on the health angle which is very much prevalent in the instant food category.

 

Speaking about jams, it is already a big as well as a mature category. Relevant plug and play in terms of the innovative product and promotion mix sees a lot of action in this category.

These launches will ride on the learning of the previous success and excite the TG with differentiated promos as a part of the game plan.

 

The keys elements, the 5Ps of marketing - pricing, packaging, promotion, place and people have to be topped with timely and opportunistic riders like licensing in this case, to give the much required differentiation and zing to the launches.

Inputs provided by Private Brands’ team, Future Group

 

 

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