The Rs-42,000 crore dairy mammoth Amul is back in news trying to reiterate that its products are the purest. In 2012, it kicked off a battle against ice-cream brands, which used vegetable fat as an ingredient instead of milk fat and said that they couldn't be called ice-creams. The company fought a legal battle against Hindustan Unilever and the court gave a ruling that desserts made out of vegetable fat have to be referred as 'frozen dessert' and not ice-cream.
This time around the dairy major has challenged the likes of Britannia, ITC Foods and Parle Products on the authenticity of their butter cookies. Amul has recently forayed into the-Rs 15,000 crore biscuit market with Amul butter cookies and claims that its product is made out of 100 per cent dairy fat, while competition largely uses vegetable fat and very little dairy fat. However, will a late entrant's claim of being purer than established brands work in its favour? "Amul has always stood for purity and it wants to own that space," points out Alpana Parida, MD, DY Works, a design-led brand consultancy. Parida believes that by virtue of being India's most loved brand, consumers have lot of empathy and will believe what the brand says.
"It's a nice way to create disruption for a brand, which is a late entrant," says Brand Strategist and Founder, Ambi Parameswaran. However, in a market where consumers buy products on the basis of price and taste, does it really matter whether the butter cookie has additional butter or not? Parida says that in a category like cookies which are invariably bought by mothers for their children, an imagery of a 100 per cent dairy product does play an impactful role in the buying decision.
But, Amul's butter cookies come at a premium than Britannia's Good Day or ITC's Mom's Magic. A 40-gram pack is priced at Rs 10, while Britannia has priced its butter cookies at Rs 5 for a 40-gram pack. "It is not the best of times (at a time when consumption is slow) for a new category entrant to sell a product at a premium," says Devendra Chawla, MD, Spencer Retail. If the Indian consumers like the taste of the product and if the product is affordable, then they are not really bothered if it doesn't contain a higher percentage of butter. The Britannia and Parle cookies have been around for decades and are a favourite of consumers. In fact, Varun Berry, MD, Britannia Industries, firmly believes that the recipe of success lies in offering consumers great tasting products at a democratic price.
"Overall, it's a good strategy for a late entrant, but selling at a premium in a price-sensitive market may not fly," says Parameswaran.