From launching its oil brand to manufacturing the Leher range for PepsiCo, and having ventured into packaged drinking water and namkeen, the Kolhapur based Sanjay Ghodawat Group is set to position itself strongly in the Indian market. Shrenik Ghodawat, Director, shares their business plans in a tete-a-tete with Nikita Bothra. Read on...

What is the strategy behind venturing into the branded snack category?

The branded snacks market has come a long way from the 1990s, when it was dominated by the large players and a few other regional brands. Twenty years ago, snacking on chips meant the deep fried, homemade (sliced, sundried, stored) potato chips our mothers were adept at making along with dozens of other savory snacks. Today, all we need to do is tear open a packet of our favorite brand.

The Sanjay Ghodawat Group has already been in the FMCG industry with categories such as edible oil, mosquito coil, iodised salt and have been working for multinational companies as contract manufacturer for their snack foods like Namkeen, Potato Chips, Kurkure etc. Indians love'snacking' and, over the past two decades, branded salty snacks have found high acceptance across large and small cities to become the preferred choice of consumers. Mapping this phenomenal change and demand in India, the Group has decided to enter into this segment. As we already have a good platform in the FMCG segment and a strong distribution network, it was a natural choice to launch our own packaged drinking water brand "Star555." Considering all these prime factors we forayed into this segment last year. We have introduced the following products in the category:

Can you tell us a little about the production facility and capacity?

The processing is done in our plant Excelus Star Foodbev Pvt. Ltd. which is situated at Chipri (Jaysingpur) in Kolhapur district. The plant capacity is 750 Metric Tons per month and is equipped with imported and indigenous machineries.

In which Indian states would the product be available?
   
Central location of the plant plays a vital role in demarcating the states.  In Phase 1, Maharashtra, Goa and Karnataka will be the initial markets for the product. In Phase 2, the Group plans to enter Andhra Pradesh, Madhya Pradesh and Gujarat.

In the snacks category, what are the trends you notice with regard to product innovations and consumer preferences?

The general trend in the market is to consume hygienically packed snack food. Over the coming years we will see that the snacks food market will become very regional in the taste attributes. Keeping this in mind, the Group has its own R&D department which is engaged in innovation and new product development. The base of research will always be to study the consumption trends and then introduce more products to suffice the demands of consumer across all regions in India.

What would be the unique selling proposition (USP) of your products?

As mentioned earlier, we will be focusing on region-based snack food products as per the tastes and demand of our consumers. Over and above, our snack foods are rich in vitamins and proteins through its source. With snack foods, we have also launched our packaged drinking water brand "Star555." Besides, we have also finalized to set up an 8 MT per hour Rice Milling Plant, which will in turn help us launch our rice brand as well.

As a new venture in snacks, what challenges did you face with regards to regulations, procurement, manpower and transportation?

The Group has its belief on two sides of the coin. Market is always a competitive battleground where consumers are the spectators. Due to our already existing setup within the Group, the challenges were limited to product development and distribution. Both of these challenges have already been taken care of and now our focus is completely on the product launch.

What is the capital that has been set aside to venture into the food and beverage sector (viz. the snack, packaged drinking water and rice brand)?

We have currently planned to invest around INR 100 crore across all business verticals in the consumer products space.

What is the company's current turnover and target for the next fiscal year?

As the company is in its first year of operations, the current turnover is around INR 30 crore for this financial year. In the next fiscal, we plan to achieve a cumulative turnover of INR 175 to 200 crore.
 
Tell us a little about your future plans in the pipeline?

We have a very clear strategy going ahead, where our prime focus will be on two categories namely - food and beverages. Under food, we will focus on snack foods, grain milling and processed foods and under beverages the focus will be on aerated & non-aerated drinks.