EXPANDING THE SOYA MARKET

RUCHI SOYA INDUSTRIES LIMITED

Presented by:

Piyush Kapoor 2K14G065

Shreya Tandon 2K14G091

Jobin 2K14G045

Saransh 2K14G086

Trideep 2K14G102

In 1969-70 the total soya crop in the country was around 50,000 tones a year. At present, the crop is 7 million tones.

RSIL were the first to set up a crushing plant for soya bean in 1972.

A number of FMCG companies as well as restaurants use the flour for their products. That is why, in the mid-1980s, RSIL relaunched “Proflo”- the soya flour, and brought it under the Nutrela brand.

RSIL believed in educating the consumers first.

INDUSTRY

• Ruchi Soya Industries Limited (Ruchi Soya) is a leading manufacturer and India’s largest marketer of healthier edible oils, soya food, premium table spread, vanaspati and bakery fats.

• The Company has focused on continuous expansion across business verticals to consolidate and sustain its industry leadership.

• Over the years the Ruchi group has metamorphosed from a trader to a manufacturer & marketer and Ruchi Soya is now a company with a strong portfolio of brands viz. Nutrela, Mahakosh, Sunrich, Ruchi Gold & Ruchi No.1.

• With a turnover of over US$ 5 Billion, Ruchi Soya Industries Limited is listed on Bombay Stock Exchange Limited.

RUCHI SOYA INDUSTRIES LTD.

PEST Analysis

Pre – liberalization stage when the company was launched.• Now lots of rules and regulations

being formed by governing bodies : for ex: FSSAI, etc.

• Trade practices more helpful and comforting now.

• Politically unstable country.

• High disposable income(GDP increased).

• More than 50% of Indians are youth & they have high incomes.

• FDI in FMCG sector ensures more options & competition.

• More affluent customers.

• More health cautious.

• Less time for cooking ( people need ready to cook processed products).

• Technology advancement.

• Enhanced supply chain process.

• Quality control management.

SOCIAL

POLITICAL ECONOMICAL

TECHNOLOGICAL

COMPETITIVE ANALYSIS

Snack segment • INSTANT

NOODLES

OILS(SOYA/EDIBLE OIL SEGMENT)

Market Competitors

Competitors

The instant noodles category in India was, in a sense, created by Nestlé with the introduction of their Maggi brand in mid-1980s. The concept of ‘2-minute noodles’, positioned as a quick snack option for children, found acceptance with both the children and their mothers as well.

During the 1990s and 2000s, Maggi faced little competition.

Despite the entry of players like Top Ramen (Indo Nissin Foods) in 1991, Ching’s Secret (Capital Foods) in 1996, and Wai Wai (CG Foods) in 2005, Maggi continued to retain its dominant position.

INSTANT NOODLES (SNACK SEGMENT)

Edible Oil Companies play a dominant role in the Indian Food Industry as edible oil is one of the most important part of daily requirements.

Edible Oil Companies produce oils of different variety that include Sunflower Oil, Groundnut Oil, Soyabean Oil, etc.

India offers a huge market full of potential and demand for edible oil companies, which has attracted numerous companies to join this segment like Safolla(Marico) , Fortune(Adani Wolmar) , Sundrop(Agro Tech Foods Ltd) etc.

OILS(SOYA/EDIBLE OIL SEGMENT)

There was immense potential for high-protein, low cost food in this country.

Nutritional levels in India are extremely low and most people are vegetarian.

Protein-rich vegetarian foods like almonds are not affordable; on the other hand, soya is a rich source of protein.

Customers wanted smaller soya chunks to add to peas or channa dishes. So, in the mid-1980s RSIL launched Nutrela granules and mini-chunks.

When RSIL learnt that customers did not find the TSP tasty on its own, they introduced flavored soya chunks.

The biggest problem with the Indian market is initiating any change in food habits. Rather than changing age-old habits of wheat or maize atta, RSIL encourages consumers to mix 100 or 50 grams of soya flour with any other flour to make it healthier.

CUSTOMERS AND THE BENEFITS THEY EXPECT

Nutrela, launched in 1979-80 by Ruchi Soya Industries, has more than a 50 percent market share in the soya food segment.

Their initial communication centered on proving that Nutrela was economical, even compared to malted food drinks (MFDs).

The target audience was supposed to be the vegetarian consumer who could use the chunks as an extender to paneer or as a substitute to vegetables.

The research indicated that it was the non-vegetarians who were buying the product since soya chunks are similar in texture to meat. Nutrela was proving a good substitute for meat, at one fourth of the cost.

Nutrela would be particularly relevant in areas where vegetables were not grown or not available for some periods of the year.

1 kg of Nutrela has as much protein as 20 eggs or 10 kg of almonds.

In India, granules proved popular as extenders to dals and gravy dishes, while the chunks were often used as substitutes for paneer cubes.

The ready-to-cook soya dish in granules form introduced by the company. Since granules absorb masala faster than the chunks, a tastier dish is available instantly.

KEY SUCCESS FACTORS IN THE INDUSTRY

SWOT ANALYSISRUCHI SOYA INDUSTRIES LIMITED(RSIL)

S.W.O.T• Emphasis on superior procurement, trading

skills and tough quality control standards• Continuous innovation and an effort by the

industry to meet consumer needs• Largest player in India in edible oil category• Wide and extensive distribution network of

6,30,000 retail stores• Over 5 Lac retail stores, 90 Company

depots, 2000 distributors and a sales personnel of 200

• Crushing capacity of about 4 million tons annually in 14 plants, extend over 11 locations

• No control on raw material prices as product is agro based

• Despite high quality product and good distribution, limited brand awareness compared to some other brands

• Strengthening industry portfolio with other healthy additions

• Control price fluctuations• Expansion into premium

segments and global markets• Tie- up with restaurants and

hotel chains

• Food regulation by Government

• Regulation and control by other authorities like NGO’s

• Entry of more domestic and international players

STRENGTH

OPP

ORT

UN

ITIE

S

THRE

ATS W

EAKNESS

Own Products : Ruchi Soya Industries ltd.

• Ruchi's wide range of food products include healthy cooking oils, nutritional soya foods, top grade Vanaspati and bakery fats

• Ruchi is the undisputed market leader in the edible oils, as

well as soya foods categories

• The edible oil range includes many top brands like Mahakosh Soyabean oil, Ruchi Gold Palmolein and Sunrich sunflower oil

• Nutrela is the largest selling soya foods brand in the country

Mahakosh Oils:

Soyabean

Sunflower

Rice Bran

Groundnut

Nutrela Oils:

Nutrela Soyabean oil

Nutrela Mustard oil

Nutrela Sunflower oil

Soya food:

Nutrela chunks

Granules

Mini chunks

Vanaspati

Nutri gold vanaspati

Ruchi No 1 vanaspati

Products

Ruchi Soya Industries ltd. (RSIL) also produces bathing soaps by the name of “ Ruchi No 1” apart from the regular eatables like oil, nuggets and chunks of soya

This is what none of its competitors offer, they only produce consumer eatables but not toiletries such as bathing soaps

Ruchi industries manufactures diff varieties of soaps:

Goodness of Rose petalsMagic of Fresh jasmineFreshness of LimeGoodness of Natural sandalwood

Ruchi No1- “The ADD-ON”

Competitors Products

Agro Tech Foods ltd, Sanwaria Agro Oils ltd. & Fortune

The Agro Tech Foods ltd are affiliated to ConAgra foods ltd of US, which is the one of the worlds largest companies

Agro tech foods ltd. is the no 1 company and the biggest competitor to Ruchi soya industries ltd.

The product line includes Act II popcorns, Sundrop Oil, Sundrop peanut butter, Crystal and Act II Nachos

Agro Tech Foods ltd.

Sundrop oil

Heart

Goldlite

Olivea

Nutrilite

Slimlite

Act II popcorns

Microwave popcorn

Instant popcorn

RTE popcorn

Crystal

Sunflower oil

ACT II nachos

Product

Sanwaria Agro Oils ltd.is a part of Sanwaria group

The company has three brand names- “Sanwaria”, “Sulabh” and “Narmada”

The business of SAOL is:-

Producing and selling soy meal in international and domestic marketsRefining of crude soy oil to produce refined soy oilDistribution and sale of branded soy oilProducing soy flour, soy chunksTrading agro commodities like Wheat, Gram and pulsesProducing and selling basmati rice in domestic and international markets

Sanwaria Agro Oils ltd.

Oils:

Soyabean oil

Rice Bran oil

Narmada soyabean

Sulabh soyabean

Flour:

Sanwaria seth

Sawaria soya flour

Soya nuggets

Sawaria prodiet chunks

Rice:

Dubar basmati

Tibar basmati

Extra long basmati

Products

Cooking oil:

Soya health oil

Rice bran oil

Mustard oil

Kachi ghani oil

Besan Rice

Special basmati rice

Traditional basmati

Jubilee long grain

Soya chunks Pulses

Chana dal

Arhar dal

Fortune Foods: Product

INDUSTRY AND MARKET ANALYSIS

Market Overview

• High-protein vegetarian foodProduct Segment

• Textured Soya Protein (TSP)Product Category

• 1979-80 (35 years old brand)Brand Launch

• $200 million (Rs. 120 crores)Present Brand Value

• Rs. 5 croresInitial Investment

• consumers seeking substitutes to groundnut cooking oilInitial Target Segment

Parent company Ruchi Soya Industries Ltd. initially sold soya oil extracted from soya beans

Soya meal was a by-product of soya oil extraction process and exported as animal feed

Ruchi Foods saw the gap in the market for a protein-rich add-on in vegetarian meals

Imported TSP technology for Rs. 5 crores in 1979-80 and launched product under the brand name ‘Nutrela’

Spotting the Opportunity

Bargaining Power of Customers – LOW

Bargaining Power of Suppliers – MEDIUM

Threat of New Entrants – LOW

Threat of Substitutes – LOW/MEDIUM

Competitive Rivalry – NIL

Porter’s 5 Forces – Nutrela TSP

Directional Policy Matrix

Nutrela

INDU

STRY

ATT

RACT

IVEN

ESS

STRENGTH OF BUSINESS UNIT OR PRODUCT

Nutrela

GE – McKinsey Matrix

Strategies for market expansion

RUCHI SOYA INDUSTRIES LIMITED

Company

• Ruchi soya Industry Limited

Category

• Food processing and products

Sector

• Food and Beverages

Industry Overview

People looking for a good quality

Healthy edible oils

Health consciousLower class Families Middle class families

Building trust through quality

STP analysis

Segment

Targeting

Positioning TAGL

INE

& U

SP A LIGHTER OIL

Fat Nhi, Fit

Ansoff matrix

MARKET PENETRATION STRATEGYPrice reductionSkimming pricing Variants in price

PRODUCT DEVELOPMENT STRATEGYFlavoring of product based on customer needs Product to replace meat, paneer, tofu.Nutrela granules & mini chunks

MARKET DEVELOPMENT STRATEGYTapping the untouched marketsGoing rural Going global

DIVERSIFICATION Soya cooking oils Soya food supplements Soya atta (Flour)

ANSOFF MATRIX

Curr

ent M

arke

ts

New

Mar

kets

Current products New products

Marketing mix Product: Price: Place: Promotion

Marketing Mix

Raising protein content by redesigning extraction process of product

Use of advanced and modern technology methods for extraction of soya and oils.

Repackaging of products which can include a booklet of recipes in the pack.

Increasing visibility of advantages on product pack.

Raising the availability of the product in the various markets like restaurants, hotels & institutional areas.

Provide samples of its other product like soya flour etc. with the existing product.

Being a Market Leader Ruchi holds a market share of 50%.

With first mover advantage they can use a cost

leadership factor for their product .

Skimming pricing can be used. Initially can be launched with higher price and with the rising competition reduce the price to maintain the position.

Varied price products can be made available for the customer to make effective purchase.

Value based pricing can be most effective for products like nutrela

Price must be challenging to the other substitutes like malted food drinks

Product Price

Marketing Mix

Making product available at every point of purchase such as: General stores Krina stores Multi-Brand markets Super markets Chemists

Multi channel sales can be used for increasing the reach to the customers.

Making available on various online grocery stores to improve online presence.

Tapping the best distribution channel in order to prevent the shortage of product .

The major reason of their promotion is to spread awareness about the product.

Use of “ATL” activities such as TV advertisement & radio jingles to spread the awareness about the product.

Use of “BTL” activities can be use such as providing print adv in the newspaper for spreading awareness

Use of TTL activities to spread the awareness about the health content of their product though different social media platforms.

Endorsements by celebrities or recommendations by various nutritionists.

Place Promotion

Star performers

Question mark

Cash cows Dogs

BCG Matrix

BCG With PLC

Introduction

Star performers

Question mark

Decline

Maturity

Growth

Cash cows Dogs

1969-1970

1972-1982

1983-89

Endorsements by celebrities, nutritionist & physical advisors can spread awareness about the use of soya bean in food

Campaign for making food that includes Nutrela can be run on online and offline fronts.

TV shows like cookery shows can help spreading the effective use of Nutrela.

Doctors can be approached to promote their product for the customers.

Practice Pull Marketing techniques to generate low-cost and high-quality awareness.

Word of mouth information transfer will also affect the awareness of the product.

Improving Awareness

Improving brand visibility helps in rising the sales of the product.

Being a food product, it need to be customer first choice while buying the food.

Advantage of using Nutrela must be clearly visible.

Presence of high protein content is the customer value preposition.

In-house exclusive shelf space can be taken in super markets.

For smaller shops informative danglers can be provided.

Continuous price reduction to overcome competition can be avoided, as it affects the quality of the product.

IMPROVING BRAND VISIBILITY

Different flavored soya bean packs can be introduced.

Being an important ingredient in Chinese cuisine, it can be used in restaurants that serves Chinese food to the customers

Quick to make soya beans can be used as replacement of vegetables and meat.

It can be used for increasing the quantity of the vegetables.

Region centric flavored soya beans can be introduced.

Targeting the decision maker in the buying process of the product “lady of house”

Tapping the existing customers

Indian soya bean market is worth over US $ 1.11 billion or INR 5,000 crores

India is an imported of soy oil but exports soy meal which is considered to be one of the premium soy meal among European and Asian countries

Indian exports approx. 65% of total soy meal produced and has turned out to be one of the largest exporter of soy mean.

Encouraged by current export trend, the solvent exporters association is planning to send delegation to Cambodia and other Far- Eastern nation to further strengthen the hold on the markets there.

India’s Soy meal exports are expected to cross 1,00,00,000 tons mark, which is 45% ahead of last seasons.

Future in India

Brazil 4%

China19%

Ar-gentina 2%

Europe 17%India

11%US 8%

Others 38%

Market share

World Edible oil Consumption

Palm

soya

bean

Rapeseed

Peanut

Cottonseed

Sunflowerse

ed

Other

0%

10%

20%

30%

40%43%

17%14%

9%7%

5%4%

Series 1

INDIAN MARKET OIL CONSUMPTION

19%

14%

13%11%7%

6%

5%

26%

Market share Indonesia Malaysia China europe United states Argentina India Others

World Edible Oil Production

Price advantage as Indian soy meal is still cheaper when compared with the American or Brazilian soya meal.

No other country produces cheaper soy meal than India, which contains high protein content of around 48%

Only India supplies non-GM soy meal while the U.S., Argentina and Brazil manufactures only GM soya meal

Advantage of Indian Soya in world market