EMagazine June 2014 - shop.indiaretailing.com · June 2014 • Volume 8 number 6 • Rs 100 •...

INDIA EDITIONJune 2014 • Volume 8 number 6 • Rs 100 • www.indiaretailing.com

Organics in Mysore Demand encouraging entrepreneurs to open specialty stores

Dr. Oetker FunfoodsLong-term plans for India2

Jyothy Labs Geographical expansion top priority Page 10 Page 38

Mohit KhattarManaging Director

Godrej Nature’s Basket

Wine and liquor in grocery stores boosting revenue

Spirited SalesPage 16

01_Cover_PG_June-14.indd 2 5/30/2014 7:07:08 PM

4 | Progressive Grocer | Ahead of What’s Next | June 2014

June 2014 • Volume 8 • Number 6 Editor’s Note

All feedback welcome at [email protected]

Amitabh TanejaEditor-in-Chief

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Empire Stores is among the few grocers in Chandigarh with a license to sell alcohol in his store. Morning Store in Delhi has opened one, and Modern Bazaar is mulling opening a section at his upcoming grocery store in Noida. Kipps in Ludhiana has a fl ourishing liquor section in his store. So, it’s not just the high-end gourmet retailers, or the super and hypermarkets, rather, it is the friendly, family, store next door that is changing the retail ambience.

Grocers comment that wine and liquor has become a more liberalised commodity, and this has also impacted consumers’ preference (especially women) for shopping for their beers, wines and other spirits in grocery stores and hypermarkets. Grocers must ensure the right storage temperature, and have a salesperson knowledgeable about wines and liquor. Suggestive selling/cross merchandising is also recommended.

However, challenges abound. Rules and regulations in wine and liquor retailing are not uniform across India, but vary from state to state. Relevant licenses from state excise department are compulsory, and retailers have to renew their liquor and/or wine sales license at the beginning of each fi nancial year. In some states, procurement of liquor is mandatory from government operated state corporation depots, and in some states it is privatised.

Th e cover story is this issue delves into the concept of having a section dedicated to wine and liquor at food and grocery shops.

Wine and liquor sales on a high at grocery stores

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CONTENTS June 2014, Volume 8, Issue 6

Cover Story

16SPIRITED SALES

Food and Grocery retailers are boosting their store(s) revenue through wine and

liquor sales

Interface8

SHREE PARAS SUPERMARKET

Th e story of Shree Paras is one of grit and determination

10JYOTHY LABS

For M P Ramachandran, Chairman and MD, the company’s top priority is geographical expansion

12DR. OETKER FUNFOODS

Oliver Mirza, MD, discusses long-term plans for India

Food & Grocery24

BEVERAGES: WINERetailers tap consumer trends

to sell more wine

26CATEGORY MGMT:

BEVERAGESRetailers, CPG companies

rethink how best to turn up the spigot on their liquid assets

32STORE OF THE MONTH

Key Food store provides fresh, healthy food — and an object

lesson in resilience

38ORGANICS IN MYSORE

Demand for organic products is encouraging entrepreneurs to open organic stores in the city

44CARDAMOM

Spices Board Chairman Dr. A Jayathilak shares the current market performance of Indian cardamom in international markets

Products48

CONFECTIONERY: CANDYCandy can be

part of a healthy diet

52BEVERAGES: ALCOHOL

Ciders are the ‘next big thing’ in supermarkets

56NON FOOD: HEALTH BEAUTY WELLNESS

Food purveyors are helping diabetics to fi nd healthy

choices

58NON FOOD: DIETARY

SUPPLEMENTSA rich resource for retailers, energy products can present

placement challenges

60PRODUCT WATCH: ORAL

CAREBrands are launching variants

to provide solutions for specifi c oral care needs

Regulars66

INDUSTRY INSIGHTSTh e Frozen Food category is

estimated to grow three times by 2017: Report

68EQUIPMENT & DESIGNAdvances in supermarket

ceilings and fl oors yield savings, improved store ambiance

72WHAT’S NEXT

New products in the market

74BUSINESS OPPORTUNITIES

Fresh avenues to grow

03_Contents.indd 6 5/30/2014 6:30:30 PM

Cover Story Wine Retailing


Spirited Sales

With the entry of private shops into hitherto only government controlled markets like Delhi, proliferation of liquor chain stores and boutiques, super-/hypermarkets being allowed to retail alcoholic beverages, explosion in availability of alcoholic beverage brands, and the evolving Indian customer, more and more Food and Grocery retailers are boosting their store(s) revenue through wine and liquor sales, finds Namita Bhagat

Cover Story_NEW.indd 16 5/30/2014 6:41:44 PM

Wine Retailing Cover Story

June 2014 | Ahead of What’s Next | Progressive Grocer | 17

Liquor retailing at food and grocery storesLiquor in India is usually retailed at liquor stores, hotels, bistros, bars, pubs, clubs, lounges and discotheques. But in recent years, the organised liquor trade scenario in India has transformed signifi cantly. One noteworthy development has been that states like Delhi, Chandigarh, Goa, Maharashtra, West Bengal and Karnataka have allowed liquor/wine retailing in hypermarkets, supermarkets and even food and grocery stores.

Comments Vikram Achanta, co-founder and CEO of Tulleeho, “Over the last 5 years liquor retailing in India has gone through a sea change: whether we talk about the entry of private shops into hitherto only government controlled markets like Delhi, the growth of liquor chain stores like Bangalore’s Madhuloka and Drops, or of supermarkets being allowed to retail a selection of alcoholic beverages (the exact nature varying from state to state). Th e changes in the retail environment have also partly been forced by the explosion in availability of alcoholic beverage brands (and vice versa) as well as the evolution of the Indian customer.”

Achanta observes that consumers, having become more inquisitive and open to experimentation, are likely to benefi t the most from such changes. At the same time, with a plethora of new categories and brands in the offi ng, making a choice becomes increasingly diffi cult.

Agrees Subhash Arora, President, Indian Wine Academy (IWA), “Nowadays, more and more states are permitting sale of wines in supermarkets. Although tasting at the venue is not expected to be allowed in the near future, the stores’ sales staff have enough knowledge about wines to convince customers.” According to him, supermarkets and food stores are also convenient locations for women shoppers, who feel more at ease buying wine or liquor at supermarkets.”

According to him, due to overcharging in hotels and bars, the retail sector is expected to grow fast, especially when FDI in organised retail falls in place, as entry of foreign chains in liquor retail will also ensure lowering of prices, hence benefi ting the customers.

Mohit Khattar, Managing Director, Godrej Nature’s Basket, comments, “We have observed a signifi cant shift in preferences for liquor among Indians in the last few years. From being limited to brown spirits till a couple of years ago, to developing an affi nity to white spirits and cocktails, to now appreciating wines, we have witnessed a tremendous change in drinking habits.”

Grocery stores on a ‘high’ With the entry of big box retailers like Spencer’s, Auchan, Star Bazaar, HyperCity, Reliance Fresh, gourmet stores Godrej Nature’s Basket, and Foodhall in the alcohol business, the Indian liquor and wine industry is expected to see a major boost. Supermarkets like Haiko in Mumbai, Magsons, Delfi nos and Oxford in Goa, Total Supermarket in Bangalore, Le Marche in Gurgaon, along with standalone food and grocery retailers like Chandigarh’s Empire stores, M G supermarket, Ludhiana’s Kipps Market, Delhi’s Morning Store and Modern Bazaar are also giving a fi llip to the industry.

Auchan Hypermarkets operates 14 stores in key cities, of which 7 house a liquor section: 5 in Karnataka and one each in Gurgaon and Delhi. Ponnu Subramanian SVP- B&M (Foods) & SCM, Max Hypermarket, comments, “Due to evolving lifestyles of Indian consumers, wine and liquor has become a more liberalised commodity today as compared to a few years ago. It has also impacted their preference for shopping in hypermarkets. At Auchan, we off er a wide assortment of spirits, beers and wines for customers with varied tastes and preferences.” Th e

Consumption of wine in India has been growing rapidly and there is opportunity for other retailers too

— Mohit Khattar Godrej Nature’s Basket

We stock the best of wines and liquors, which are sourced from around the globe, and these surely add to our USP

— Subhash Gulati Empire Stores

Category Management Beverages


T he beverage aisle is undergoing a radical transformation in regard to what products consumers are buying, a pattern that suggests grocers need to rethink how they’re

presenting beverages to their shoppers.It’s no longer simply Coke versus Pepsi — it’s

traditional carbonated soft drinks versus upscale sodas, enhanced waters, juices, teas, milk and energy drinks. Some are shelf-stable and some are refrigerated, so they’re merchandised in diff erent parts of the store, according to tried-and-true models that some would argue have been rendered obsolete.

Remember the old tagline for orange juice, “It isn’t just for breakfast anymore”? Much the same could be said for nearly every other beverage in the store as dayparts have collided, eating occasions have changed and new products have evolved to address consumers’ unique needs.

If you can put a cooler in the middle of the pet food aisle, why can’t you do the same for beverages in center store? A category management innovation like that could make it easier for shoppers to make side-by-side comparisons and easily see what all of their beverage alternatives are.

More Pop For the Buck“We’ve reached a point of critical declines,” admitted Paddy Spence, CEO of Los Angeles-based Zevia, the stevia-sweetened soda that continues to rise in popularity. “Retailers have to think about a new blueprint for CSD. Brands like Zevia are becoming increasingly important. Retailers can make money — it doesn’t have to be a loss leader.”

During a booth visit at the recent Natural Products Expo West, in Anaheim, California, Spence said his sales team touts Zevia to retailers as a greater profi t driver than traditional CSDs. “People aren’t going down the aisle, they’re going to

BoostingBeverages

Retailers, CPG companies rethink how best to turn up the spigot

on their liquid assets

By Jim Dudlicek

We’ve reached a point of critical declines. Retailers have to think about a new blueprint for CSD

—Paddy Spence, Zevia

USA_Category Management_Beverages.indd 26 5/30/2014 6:45:53 PM

Category ManagementBeverages


Walgreens or [other channels] for soda,” he notes. “Zevia is bringing people down the beverage aisle, where they’re also buying sparkling water and tea.”

Th ere’s a generation change, too, Spence observed: “Millennials have less of an affi nity to soda than any other generation before, but Zevia is something they’re reaching for.”

Zevia, the fi rst brand to off er naturally sweetened, zero-calorie sodas, holds a 78 percent share of the naturally sweetened low-/zero-calorie CSD segment in the grocery channel, according to SPINS data. Zevia partnered with key grocery retailers to develop and anchor sections of highly diff erentiated zero-calorie, naturally sweetened CSD items. Using in-store signage and on-pack messaging, Zevia communicated its simple brand proposition, allowing shoppers to ‘fi nd their fl avour.’ In-store sampling events and dietitian-led education programs helped to spread awareness of this emerging segment in the CSD aisle.

Th is has brought sales boosts for retail partners like Matthews, North Carolina-based Harris Teeter, which the Zevia team credits for having a “fl awless” reset plan and execution, along with carefully managed schematic compliance, a successful consumer-marketing couponing program and collaboration on promotional strategy.

Among traditional brands, Atlanta-based Coca-Cola is fi nding success by cross-merchandising its beverages with snacks as a way to capture sales from “hurried professionals, overwhelmed students and multitasking parents.” Coke teamed with Mondelēz International (Nabisco) to create the Sustaining Snack Rack Program, which off ers a one-stop solution for shoppers, and increases purchase points in high-traffi c perimeter destinations and impulse zones.

Tapping shopper insights showing that consumers want ‘value solutions’ that align with how they purchase beverages and snacks, Coke and Deerfi eld, Illinois-based Mondelēz partnered with three major southeastern retailers that agreed to activate and sustain snack racks that displayed sparkling beverages and popular snacks side by side

to catch shoppers’ attention and encourage impulse buys. Th e variety of display sizes enabled the racks to be placed in strategic locations — for example, the premier deli cheese area prompted home entertaining purchases, while perimeter placements grabbed shoppers who didn’t venture into center store. Participating retailers experienced double-digit sales growth and signifi cant incremental sales.

Meanwhile, companies like LaCroix Beverages are using alternative sparkling quaff s to draw folks down the beverage aisle. About three years ago, the Fort Lauderdale, Florida-based company started promoting the idea of a dedicated sparkling water set within the traditional grocery and mass segments.

“Most retailers today have a dedicated sparkling set, and the category has grown by double digits, compounded annually, for the last several years,” Nicole Cheifetz, LaCroix’s Trade Promotions Manager, told PG at Expo West. Last year, LaCroix continued to drive sparkling segment growth by urging retailers to split the sparkling aisle between ‘pure’ and ‘sweetened’ subsets, thereby clarifying the distinction for consumers and increasing shopability and sales.

“Consumers’ growing demands and changing preferences regarding natural/organic beverages are causing retailers to re-examine older fl oor plans with schematics that have traditionally dedicated a tremendous amount of space to carbonated soft drinks and sugary beverages,” Cheifetz said. “Category management will shift from large-company domination as consumers demand more variety. Th e smaller companies developing niche segments are better suited to handling shifting and evolving consumer demand.”

Tea-totalersAnother legacy CSD brand is helping its retailer partners boost their sales of ready-to-drink tea.

Facing consumer feedback that the tea aisle is disorganized and diffi cult to shop, Purchase, New York-based PepsiCo created a new set designed to ‘elevate the tea experience.’ Partnering with a major southeastern retailer, the beverage giant tested brand-based and occasion-/package-based shelf sets. Th e results: Th e brand-based set drove incremental purchases for new users, while the occasion-based set drove incremental purchases for new buyers to the category. Th e resulting proposed set was a hybrid of both types to grow current buyer purchases and capture new users.

PepsiCo’s test partner reported results ‘beyond expectations,’ with the best performance from a test set featuring new merchandising and signage, compared with others tested with just one or the other, resulting in double-digit category dollar lift,

BEVERAGE SALESTotal Carbonated Beverages: $11.471 billion (-3.8%)Cola-Diet: $2.107 billion (-7.7%)Total Bottled Water: $4.787 billion (+3.6%)Sparkling/Carbonated Water: $850.2 million (+25%)Total Refrigerated Juices/Drinks: $3.956 billion (+0.3%)Total Shelf-stable Juice/Drinks: $6.062 billion (-4.2%)Total Milk: $11.293 billion (-1.7%)Total Alcoholic Beverages: $20.706 billion (+3.5%)Total Beer: $9.308 billion (+1.3%)Total Wine: $7.288 billion (+4.8%)Source: Nielsen, Total U.S. — Food Over $2 million, 52 weeks ending February 15, 2014

USA_Category Management_Beverages.indd 27 5/30/2014 6:45:53 PM

Focus Organic


Mysore is seeing a spurt in organic food stores, finds Roshna Chandran, as she talks with several organic food specialty store

owners, who share their challenges in production, supply and retailing of organic products, and their philosophy of giving

back to Mother Earth

On IndianSoil

By Roshna Chandran

Earth Loaf Artisan & Raw Food Pvt Ltd (India) D avid Belo and Angelika Anagnostou

decided to leave behind their bar tending and cocktail mixing vocations for a

healthier life of yoga and healthy food. Th e duo started out with their handmade organic artisan country bread in London. As demand for the bread grew, David Belo (who is from South Africa), and Angelika Anagnostou (who is from Greece), decided to focus on the premium ingredient cacao. Th ey headed to India where they discovered that cacao was being grown in Mysore since the 1920s.

Th ey came to Mysore and set up retail brand Earth Loaf in 2010 with an initial investment of ~Rs 4 lakh. As the name indicates, the brand brings together a blend of cacao-infused tea and organic food commodities grown locally. Th ey operate from a 750 sqft feet production unit, situated behind a polymer factory at Mysore’s Metagalli area; the unit currently produces 20 kg of cacao monthly, but plans are to increase capacity to

Focus_Organic.indd 38 5/30/2014 6:50:28 PM

Organic Focus


Mysore’s evolving marketMysore, the third largest city in Karnataka, with a population of around 9 lakh, is better known for its many yoga centers that attract a steady stream of tourists, and its even larger number of educational institutes. Unlike its neighbour Bangalore (three hours away by road), which is fast becoming a food lover’s destination with its numerous fast food outlets, casual dine, cafes, bakeries, pubs and breweries, and its large format supermarkets stocked with imported goods, Mysore is still evolving as a food and grocery market. The city is now seeing a (sudden) spurt of organic retail outlets. Demand is being driven mostly by the 35+ consumer, who is upwardly mobile, discerning, health conscious, aware of the importance of preserving the environment, so prefers to purchase locally grown organic products.

80-100 kg in the next few months “with help from investors in the U.S.” according to Belo.

Most of the equipment has been assembled or built by Belo, who is also a chocolatier and mechanical engineer, while Anagnostou is the master blender of the cacao tea. Th e cacao beans are sourced from a cooperative based outside of Mangalore, which works closely with farmers in Mangalore and Kerala. Earth Loaf ’s products include 72% Dark Bar (72gm costs Rs 270); 72% Cacao Nib and Coconut Sugar Bar (72gm costs Rs 270): Chai Masala Bon-Bons (54gm/6 pieces per box - Rs190): Raw Cacao Nibs (200gm - Rs 250): Cacao & Assam Tea (100gm - Rs 220); and 100% Cacao Infusion (100gm - Rs 190).

Explains Belo, “Our 72% Dark Bar made from the 72% single origin, raw, organic South Indian cacao, and South Indian coconut sugar that has a glycemic index level of 35 and is suitable for type 2 diabetics. Th e Cacao Nib & Coconut Sugar Bar is another 72% classic bar; Masala Chai Bon-Bon is a blend of Indian spices and real vanilla in 72% dark chocolate; Tiramisu Bob-Bon is a combination of Coorg’s Golden Mist Arabica A grade organic coff ee with vanilla and nutmeg and 72% chocolate.

Belo informs that they produce 20 kg of chocolate, and manage to sell products worth 10-15 kg every month. He says, “We have just ventured outside of Mysore. We are breaking even every year, but we like to keep things small. In the next few months we plan to start supplying to South Africa, USA, and to some European countries. I would be happy to see our chocolates in London’s high-end boutiques. Our products are always fresh because everything we make is supplied immediately. When we start making 100 kilos a week, we will extend our storage space and even have a walk-in fridge.”

Earth Loaf products are available in other organic stores, namely, Nesara Organic Store, Namaste Gourmet Store, and Dhatu in Mysore, and Th e Ants Store & Cafe in Bangalore. Th e brand markets its products through events like tea and chocolate tasting. Adds Belo, “Th ere aren’t any premium organic chocolates being made in India (as far as I know), and there is an emerging market for chocolates, including the organic variety. We plan to do many more tasting events and be more active on social media, however, my favourite way of marketing is through personal interactions with the consumers.”

Th e brand’s second category of teas and infusions include the Raw Cacao & Assam Loose Leaf Tea and the Raw Cacao Infusion. Another category called Life Foods consists of Raw Cacao Nibs that can be used in smoothies, salads, honey and cereals. Says Anagnostou, “We started with making raw chocolate dessert with coconut and it

was something that we enjoyed. I am also a healer and a yoga teacher; this is why we talk about energy foods and what you put inside them. I too worked in a cocktail bar in London for many years, so both David and I have a background in fl avouring, balancing, and creating new recipes. Nowadays, people are aware of what they are eating, and this awareness is happening very fast. Th e trend is visible across the world, including India.”

Th e major challenge, according to Belo, was to convince people about their expertise as chocolatiers, especially in a society like India’s where chocolatiers do not exist. Documentation and acquiring licenses was a tedious task. But Anagnostou is grateful for many things. “Our main supplier is super organised, and we can order everything online. We just have to be grateful to the people we work with. It took a couple of months to train the two women who work with us, and we are learning too.”

Th e partners also observed that consumers in India, like the Westerners, are becoming aware of organically cultivated products and food ingredients, and the art of craftsmanship in specialised foods. “Mysore has certainly changed a lot since 2008. Maybe in another 10 years we would completely reject fast food. I see a lot of people taking up yoga, and we have Indian students as well as people in their late 30s buying products from us. Th e mindset of these consumers is very diff erent. In fact, yoga students are our main buyers,” say the duo and inform that they have plans to expand their brand’s presence in Bangalore, Chennai, Mumbai and Goa.

David Belo and Angelika AnagnostouOwners

Focus_Organic.indd 39 5/30/2014 6:50:31 PM


what s nextFood, Beverage & Nonfood Products

Bite into Bombay BitesFortune Gourmet Specialities, one of the leading importers, marketers and distributors has introduced a range of frozen, ready-to-cook (RTC) snacks and breads under the brand name, Bombay Bites. Th e range off ers variety of products, paneer poppers, corn and cheese samosa, jalapeno and cheese samosa, potato and peas samosa, pizza samosa, Chinese spring rolls, and puff paratha. According to the brand, the range off ers 100 percent vegetarian products. Bombay Bites RTC range is available in pack sizes of 216 gm, 240 gm and 320 gm, priced between Rs 55 and Rs 149 depending on the variant. Bombay Bites is available pan India at the leading stores such as Foodhall, Nature’s Basket, Big Bazaar, Haiko, and Sahakari Bhandar.

Packed with monstrous energyOne of the popular energy drinks in USA, Monster energy drink has been launched in India. Th e launch of the energy drink, which has been associated with sports and adventures across the globe, has been supported by various promotional activities in India too such as such as bikers’ meet in Goa and drag race in Lonavala, Mumbai. Monster energy drink is priced Rs 95 for a can of 475 ml.

The Nutty Gritty of tasteDRB Foods, sister concern of California Agri Nuts Corporation (CANC), one of the top importers of dry fruits in India has expanded the product basket of Nutty Gritties with the launch of wide range of fl avoured almonds and cashews. Th e range off ers fl avours such as, barbeque, pepper, red chilli, chilli garlic, fresh mint, hing jeera, smoked, sugar craving, kesari gurd, Punjabi tadka, sauf elaichi varq and honey sesame. Th ese fl avoured nuts are available in a pack of 180 gm, priced at Rs 220 for cashews and Rs 270 for almonds. Nutty Gritties fl avoured almonds and cashews are available at the leading modern stores such as Nature’s Basket, Le Marche, Reliance Fresh, More, Big Bazaar, Star Bazaar, and Modern Bazaar, they are also available at the retail formats in airports.

Whitening effectNivea India, an affi liate of Beiersdorf AG, and one of world’s largest skincare brands has launched a new skin care deodorant, Whitening Sensitive in the Indian market. According to the brand, new deodorant’s ultra light formula without alcohol doesn’t cause any irritation to the skin; it contains licorice extracts that reduces melanin production and repairs skin to give even toned underarms. It has a soft refreshing fragrance that is believed to provide long lasting protection. Whitening Sensitive deo is available for Rs 199 in a 150 ml pack.

What Next.indd 72 5/30/2014 7:05:50 PM

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