Eating out in India

The Indian food retail industry is close to Rs.4.5 lakh crore, but only 2% of it constitutes organised sector. In such a scenario, it is tough to focus on value, and this means recently most of the organised fast food chains are focusing on volumes for growth.

The focus has moved from a menu with limited variety and expensive options to one with a wider variety on the menu and prices even as low as Rs.25/-. This is for those chains which are set at targeting youth - the college goers whose one time canteen meal would be limited to ~Rs.25/-.

Chains like KFC are infact also likely to position themselves as breakfast and after-dinner joints and not just meal hang-outs and is also considering home delivery. A move towards healthier grilled options and not just the deep fried hi-cal version of the chicken are also on the cards. All these will hopefully help them achieve their target of 500 stores across 50 Indian cities (right now the count is 150). Yet another challenge that these chains pose is that of retaining constant prices across stores/ cities when the input costs especially real estate widely vary.

Some of the competitors for KFC viz MCD, south african Nando and more local ones like Bangs, Hot Chix, Chic punch, BFC are eating into its share.

Meanwhile MCD which currently owns 240 stores, is shifting focus from children (through it's Ronald McDonald) to adults. It plans on moving from vibrant red and yellow as brand colours to the more muted ones which are likely to appeal to adults. Its offerings have evolved from the more kiddie friendly burgers and fries to include Mc. Spicy (Veg and Chicken variants). Mc.Flurry - a dessert filling enough to tide you between meals appeals to the adult palate with combination of textures - creamy(ice cream), chunky (chocolate bits), grainy (oreo) and serves as a meal by itself. Right now only prototypes in Delhi and Mumbai are experimenting with the new outlet colours, changed logo. And it is likely to go viral in the next 4 yrs.



Some quick facts about MCD :

• MCD opens a new outlet every 4 hours
• Serves over 46 million customers each day (0.5 mn just in India)
• It has sold well over 100 million burgers till date
• Ronald McD has different names based on the country - Uncle McD in Singapore, Donald McD in Japan (which has 3000 stores!!! - the largest market for MCD after US)
• US is the largest market with 14000+ stores
• In some places the items on the menu vary based on tastes and demand eg - rice burgers in Hongkong, Spaghetti in Philippines, Beers in Germany & Spain

Skeptics are not sure moving from a position of a store that appeals to kids to that for adults, will continue to enjoy strong franchise among kids. Hopefully it won't alienate them :)

Consuming Middle India

Recent past has seen a drop in exports in teas, coffees, spices, fruits viz pomegranates. Interesting ? Thanks to the increasing incomes of the middle class, there is higher consciousness about 'what they consume'. The richer crust of middle India finds brands with the export quality sticker more suited for consumption be it - green tea, pepper, coffee from the finest beans , milk and dairy products etc.. The exporters of these items find it more lucrative to sell to Indians who are willing to pay more than the foreign counterpart. An indicator for increased consumption is the price increase for milk is ~20% while the demand has increased by ~7%. The perception is that 'higher price' = 'better quality'

Infact there is also growing demand for fruits like pomegranates owing to their medicinal properties and 'general goodness' to health. The middle class Indian does not mind paying over Rs.200/- for a kilo of pomegranate.

Is that a good or bad sign, I wonder. Isn't this going to affect food inflation?! Any thoughts ?

Probiotic

Oflate there has been a flurry of articles and advertisements promoting probiotic products.
Probiotic yoghurt, ice cream....to list a few

Probiotic - primarily refers to products enriched with "friendly" (say useful) bacteria.

A recent article which got me thinking about this entire probiotic bizness :
"probiotic - harmful to the pancreas"
Explantion : usually the bacteria start acting on the food after it has already passed through the pancreas and into the intestine. However if these bacteria are already present in the food then they would act first on the pancreas itself leading to ulceration.

Do we really need probiotic products. Why cant we have simple, clean, fresh food and hope it goes down well with the system.

Scientology

I pulled up this topic for a post on this blog since I consider Scientology a concept which is getting it's fair share of marketing!
Earlier I had read about it only in the context of Tom Cruise and his baby, how his beliefs in scientology are going to determine the manner in which his baby would be delivered. Also John Travolta (the Grease dude), and his family are followers of Scientology.
As I understand Scientology has its principles (somewhere) in Christianity. There are scientology centres across the world. The one in India is in Delhi and apparently has ~40000 followers. Interesting!
Now what is Scientology? a means of understanding "the spirit" (sorry! not the bottled variety:) ; in context to life, universe and everything around. The spirit is referred to as the "Thetan". There are auditors who audit your brain waves and help you to sort out your thoughts, feelings and understand yourself better. The course cost runs to millions of rupees. Whoever said celebrities support affordable causes?!
Mere mortals like you and me are termed "Pre-clear" ( I decode that as someone who has not been audited and is thereby not quite clear about their thoughts etc...).
To become an auditor one needs to spend a few millions (again!) for getting trained. For those interested, there is shortly a centre coming up in Mumbai.
Thanks to brand ambassadors like Cruise and Travolta - scientology is catching up.
To the "pre-clear" - if you can't afford to get yourself audited.....then "don't worry be happy".... :)....things will get clearer (if not today, then SOMEDAY)

Water, water everywhere.....it costs a lot to drink!

I never thought that drinking water can be more expensive than an Evian, San Pellegrino or a Perrier. But I was proved wrong when I read about Byde's brand of mineral water, very rightly called, Bling H2O.
Bling H2O - the name made me wonder if it contained bling - gold and platinum deposits or some such thing. Well, no such luck. It is simply mineral water which follows a very rigorous purification process (source Tennesee waters) and is sold in a swarovski crystals encrusted bottle. It costs close to USD 42 for a 750 ml bottle. Hmm...and when I just about got down to accepting this reality, someone mentioned that there is yet another brand which costs close to USD 450 for a case. It is most rightly called the Charity water as the proceeds from it's sale go to funding drinking water projects in Africa.
And while there are pockets all across the world where not a drop of water is available, where humans, animals and plants perish for want of a drop....there lies a part of the world who picks up one for the Bling effect!
Cest la vie!

Nintendo - ingenious marketing

I have seen and read about marketing at its best. Now here's another example that goes to prove that there is no end to marketing a product. I have heard of medication and emotional support that goes to prevent ills of aging like dementia, alzheimer's; but only today did I read of games which serve a similar purpose.
Nintendo and some other video game companies have launched what they call "Brain games". These are targeted at grandpas and grandmas. They claim to cover a range of games that keep one mentally active and thereby reverse aging.
I read on to find out what games these are - some which found mentions in the article were mathematical, music, spelling /word associations. These games they claim help the brain to remain active and thereby prevent the aging diseases like dementia, memory loss from rendering an active human disabled, simply because of age.
That definitely required some ingenious thinking!!!

Fizz - going, going, gone

Coke and Pepsi have always been leaders in the fizzi cola market. Targeting the youth - promoting their brands as cool, trendy, meant for the youth. Although targeted at the same segment their positioning varies - Pepsi uses the youth's passion for cricket while Coke uses the passion for celebrities and bollywood.
Me wonders...

• how long would any youngster drink a fizzi cola simply because their favorite cricketer or star endorses it ?
• aren't they exposed to articles (reams and reams of paper) telling exactly how much pesticide is permitted and how much used!
• aren't they getting health conscious and preferring fruit juices and gatorades to fizzi colas
• is the novelty associated with colas still there?...if yes, will it continue to last ?

As for me, I might sip a cola once in a blue moon when I feel like "having a cola" - not because I am madly thirsty or because anyone I know endorses it, but simply because "my tastebuds demand it".....and interestingly it has been really long since I actually felt like having one.

Time Crunch

Has there ever been an instance in the recent past, when you had 'time at hand' and no tasks to be accomplished? I would be surprised if you said yes.
I remember, even until my b-school days I used to wait minutes at length to get that bus to class or to the place where we had some assignments to be done. Money was at a premium and no one cared much about time. Although time was important, its importance paled against money.
Today times have reversed - I would much rather spend that additional penny on fuel rather than waste time waiting. Earlier mom often wondered why I waste money on cabs....but today she understands that "Time is scarce".
It was not long back that I wrote a proposal for instant foods - understanding habits and attitudes of housewives towards the same. The key findings of the report were - the housewife thought that she did not want to seem uncaring and lazy by opting for instant foods, when she could go through the painstaking rigmarole to create the dish from scratch, "the maa key haathon ka khana" which the family appreciated.
Haven't times changed? Today she would consider herself smarter if she spent lesser time in the kitchen and more making money or even spending some quality time with her family. Time - such a rare commodity these days!
The products in the market all emphasise on how you could save time using them. A mobile phone with features such as push mail, voice mail, blue tooth, makes it possible to be accessible round the clock. Absolutely no question of 'wasting time'. Even while travelling people are busy at work.....punching away at their lappie buttons or following up over their cellular phones.
Earlier commute meant "peace between appointments". Today it only means "work while you are on the move".
This is great for India Inc which is growing at a formidable rate. But what about us......are we robots?....dont we need time to simply relax?
I wonder!

Packaging - English or multi-lingual?

Heard of 'Creator's bias' ? This is when the creator sees things from his mind's eye, where he believes that everyone around him sees things the way he sees them. Technically it would be defined as the tendency by the class creating a product to imagine that those consuming the product are very similar in orientation to themselves.

So accustomed to seeing the brand on the pack mentioned in English, I always gave this thought a miss. Is it a better idea to have the brand name on the pack, in a multi-lingual country like ours, in English or some other language???

Now let's imagine ; you walk into a store to pick one of your regular brands of toothpaste and other than the familiar red and white pack, the font seems unfamiliar. Not just unfamiliar but just not fit for my consumption. Imagine purchasing a pack of toothpaste which reads "colgate" (in hindi or telugu or even urdu for that matter). Just does not feel like your brand of toothpaste....does it? This is precisely one of the reasons that marketers of fmcg and such use English so profusely on the pack. They feel the same way - people associate English with some degree of premiumness.

Another reason that some leading fmcg companies provide for not having a non English pack is because it can prove to be a logistical nightmare. Just imagine, as a marketer, when you need to spend money not only on printing packs in different regional languages but also ensuring that the right one reaches the right region. One interesting observation by a Strategy officer from an ad firm - "how are multi-language newspapers managing logistics?!" so why is it so difficult for an fmcg marketer. Hmm good question!

The marketers however defend their stand by stating that the brand name in English, over a period of time and exposure, serves more as a mnemonic and what matters at the end is communication, which anyway is executed in various languages - whether it is PoPs, danglers or even inserts or instructions for use.

So what if the brand name on the pack is in English, so long as the brand gets identified, and the English language provides that 'dash of premiumness' to the brand!, marketers are smiling all the way :)

Competitive Advantage

What if your competitive advantage is easily replicated. Does it still remain one?
I read an interesting piece which said that the best competitive advantage lies in providing a unique customer experience. It is so easy to replicate a product, price off, promotional offer with the current technologies....but it is definitely not the same with customer experience.

An interesting example is that of a Harley Davidson. The product can easily be replicated, but what Harley sells is the sheer experience to dress in leather, ride through rough roads and not so frequented areas, with people frightfully looking on and STILL get noticed!

Reaching brands to rural India

A few days back, a friend mentioned that he would like to help rural India progress. His idea revolved around creating a device which helps the small retailer in rural India to place an order through the device, the order gets financed by a microfinancer who is linked to the device, and executed by the Company whose product he orders. The intent was to ensure credit availability to the small retailer in rural India and reach of brands to the end consumer.

This came back to me today whilst I read an article. Companies are now tapping Fair Price Shops in rural areas to service the end consumer. The intent is to develop these FPS into rural malls. Companies like HLL are also willing to pay higher margins to utilise this network. These swank rural malls would be used to vend not just the usual grocery items but also sim cards and other fmcg products. The minimum requirement from these FPS would be an area of 300-400 sqft.

Quite an idea!.....so instead of tying in with the retailers, how about tying in with the FPS outlets?