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Competition gets hotter as ITC enters the breakfast market

Competition gets hotter as ITC enters the breakfast market

Using the established Aashirvad name, the brand wants a healthy helping of your plate.

The plan, it goes on to say, is for ITC to launch dalia, besan and multi-millet cereals The plan, it goes on to say, is for ITC to launch dalia, besan and multi-millet cereals

The organised breakfast market has a new entrant. ITC's Aashirvad brand, which has made a name for itself in branded atta, is now in the ready-to-cook category. With product offerings that include idli sambhar, upma, instant poha, instant suji halwa and instant dosa mixes, the battle for the first meal of the day is getting hotter. As Indian families consume on the move, the time taken to cook up a full-fledged breakfast is a bit of a challenge.  

There are no estimates for the organised breakfast market owing to the nature of a large part of it being made at home. Euromonitor, according to media reports, places the breakfast cereals market (there are a host of players such as Kellogg's and Bagrry's here) at over Rs 3,000 crore. The Indian part of the breakfast market has the likes of MTR, Gits, apart from a host of regional players selling the mixes.  

The usual strategy has been to get into a third-party contract manufacturing arrangement (a well-established norm in the food industry) to eventually make its way to the consumer's plate. There is a bit of a difference with ITC's foray, however. Its agri-business gives it a sourcing advantage. "ITC also has a deep understanding of the Indian consumer's needs given its large foods and hotel businesses. This foray will help it premiumise the Aashirvad portfolio plus there is a large B2B opportunity," says an Edelweiss report on ITC from earlier this week. The plan, it goes on to say, is for ITC to launch dalia, besan and multi-millet cereals.  

The interesting part is a clear focus on the Indian palate and that is with a sound rationale. According to K S Narayanan, who has spent several years in the F&B industry and is now an independent advisor, being in exotic and foreign cuisines means limiting the opportunity to small niches. "That may not be the right thing to do for a mass player like ITC. Using their existing backend infrastructure, knowledge on cuisines and recipes coupled with the front-end capability on distribution (both online and offline or domestic and exports), is a win-win approach for the company," he says.

The ready-to-cook segment is one where many a player has come and gone. The reasons for failure vary in each case but achieving success comes with no more than a few ingredients. "What has succeeded so far are those products and solutions where the consumption was already large or essentially repeatability being high and where a convenience element was brought in by virtue of ready-to-cook. Besides, consumers to make predictable end dishes helped the cause," explains Narayanan. That means, targeting the traditional Indian breakfast of poha, upma, idli is the right approach, he adds, since consumption for each is already very high. One has seen how PepsiCo attempted to extend its Quaker Oats to a savoury breakfast portfolio. What did not save the day was a lack of a robust backend. Maybe, ITC's Aashirvad (already a Rs 6,000 crore at the consumer spend level) with a presence in salt, dairy products, premium flour and spices could just work. The ball is in the consumer's court.

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