Private label with right mix of value and premium products important :FGFI 2012

Mumbai:Food and Grocery Forum India 2012, the platform for the food and beverage industry experts and traders across the globe to converge and share their ideas and thoughts on the food and food services sector, witnessed a remarkable opening day with world food visionaries highlighting the need of food industry to operate as per the changing consumer behavioral patterns and food preferences. There also emerged the estimates of Indian F&B consumption industry to grow to USD 1 trillion by 2020.

The challenges faced by the food service sector, owing to inadequate funding and repercussions of wrong investments were discussed during the session on ‘How to get funding for your food service business’. Speaking at the session, Charanpreet Narang, Brand Head, Mirah Group (Falafals, Rajdhani, Mad Over Donuts) emphasized and underlined the importance of setting the right expectations and being transparent in all conversations.

Speaking at the session, Sanjay Coutinho, CEO, Om Pizzas & Eats said, “Indian food consumption scenario is rapidly growing and the youth is riding it. It is important for us to believe the youth and calculatively scale up our business”. Adding further, Mr Dheeraj Gupta, Co-Founder, Jumbo King Foods, said, “It is a marriage between the food company and the investor that leads to the success of the business. While an entrepreneur should patiently listen to the investor, at the same time, the investor must also believe the former and work in tandem. It is an equal partnership of both parties which is heavily reliant on trust and mutual understanding.”

Every entrepreneur wants to grow his restaurant into either a scalable model or extend it into a chain. Analysis on the key factors to be focused upon, while scaling up the food service business was carried out by the distinguished panel of speakers including Rahul Singh, Founder & Coach, The Beer Café, Manish Aggarwal, Bikanervala Foods, S Venkatesh Iyer, Goli Vada Pav among others.

Speaking on the challenges of scalability, Rahul Singh, Founder & Coach, The Beer Café, said, “India, land of 1.2 billion people, suffers due to labour retention issues. There is a dearth of skilled labour in India and we need to focus on improving the mindset of people that we employ, before deciding to scale up”.

“It is important to customize and package the product, in accordance with the needs and requirements of the local population. Instilling local taste, culture and feel will do the selling to the consumers”, said Mr Manish Aggarwal, Director, Bikanervala Foods.

S Venkatesh Iyer, Founder, Goli Vada Pav, reiterated, “The important factor we keep in mind while scaling up and expanding our business is profitability.”

The session on ‘Strategies to create successful Food & Grocery consumption’ at FGFI 2012 brought leading brands and modern retailers on a common platform to discuss the role that FMCG companies are adopting in supporting the marketing and sales initiatives of retailers. The FMCG brands spoke about their strategies to attract new customers, while retailers underlined the importance of creating new product categories. Speaking on the same, Mohit Khattar, MD, Godrej Nature’s Basket said, “We follow the strategy of educating consumers, popularizing new products and encouraging consumption. We have thus created new benchmarks in the FMCG industry and are the biggest player when it comes to international foods”.

Mr Ankur Shiv Bhandari, MD, Kantar Retail, Indian Sub-Continent, said, “Path to purchase is critical. The modern retail format gives an opportunity to the consumers to experience the brand, touch & feel the product, unlike the traditional kirana stores. Hence it is important for the brands to consider modern retail in their expansion strategy. Similarly, retailers also benefit from the brand presence at the store, since it attracts footfalls.”

The session on Private labels in Food and Grocery with panelists from Nestle, RaboBank, Future Group, Hypercity, Aditya Birla Retail reached a consensus that Private label is a very attractive segment from business growth point of view since it provides higher margins. Further, it offers high degree of customization since it caters to the needs of regional tastes and preferences. The panelists agree that both private label and branded products will co-exist as consumer taste and preferences differ from product to product and category to category. The panel also agreed that a right mix of manufacturer brands and private labels creates a win –win proposition for a retailer

Speaking at the session, Sumit Chandna, VP – Buying and Merchandising, FMCG, Aditya Birla Retail said, “Private labels help make higher margins and promote customer loyalty. Private labels represent the retailers brand DNA.”

Sharing key insights on successful food retailing business, Pattabhi Rama Rao, President, Cookie Man India said, “Food takes the maximum share of wallet when it comes to mall consumption. Centralization of processes such as supply chain, sourcing will help players to rationalize cost, sustain quality standards, attain profitability thereby enable their expansion plans across geogrpahies.”

Rahul Kumar, CEO and MD, Red Mango, added further, “Malls are not viewed as just shopping destinations but as a complete family entertainment and social hangout points. It is observed that 70% of the footfalls are driven by food and entertainments zones of the mall, hence the cuisine planning and select the right tenant-mix at the food court is critical for retailers.”

The panelists reached a consensus stating that restaurants and food courts play a major role in attracting customers to malls resulting in higher footfalls. Hence, food outlets have potential to play a role of mini anchors of the mall in the near future.

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