April 13, 2021
In spite the market for packaged mithai still remains largely unorganized in India, yet the wake of the pandemic, a large consumer trend has moved toward packaged foods
The market for traditional Indian sweets is sized at Rs. 60,000-65,000 crores so it is estimated and can be more to it. The big dairy brands such as Amul and Mother Dairy are on an increasing pace by expanding their presence in the Indian mithai segment to tap the increased consumption of packaged foods in the country during the crisis.
Surprisingly, Amul has introduced over 13 products in the mithai category since the onset of the pandemic and have expanded its retail presence all over the country. Likewise, Mother Dairy that had only Milk Cake in its mithai portfolio has launched amazing four more products viz…Orange Mawa Barfi, Frozen Rasmalai, Gulab Jamun, and Rasgulla and this was before Diwali in 2020. Mother Dairy further expanded the range in Jan’21 by adding Mathura Peda and Mewa Atta Laddoo to it. Mother Dairy, for instance, used to sell 3,000 kg of its milk cake per month before the pandemic, and now it has grown by five-folds since last year.
Aavin brand of Tamil Nadu Co-operative Milk Producers’ Federation has been running the marathon too along with other players. In its race, it launched products such as Bombay Badam Halwa, Chocolate Nuts Burfi, Bombay Mundiri Halwa, Chocolate Kaju Katli, and Pista Nuts Burfi last year.
According to Rajat Tuli, senior principal, consumer and retail practice, Kearney, the market for traditional Indian mithai is sized at Rs. 60,000-65,000 crore, out of which organized players have only a 5-7% share, and a large share of the organized market is captured by namkeen and snack brands such as Haldiram’s and Bikano, as per industry estimates. The dairy players draw less than 2% of their sales from the packaged sweets category, stated the sources.
Amul had reported a turnover of Rs. 38,550 crore for FY20 and Mother Dairy accounted for the collected sales revenue at over Rs.10, 447 crores during the period.
The current scenario of the pandemic has offered yet another opportunity to these brands to expand their presence in the largely untapped segment of mithai. Amul, for instance, besides launching new products has also introduced its sweets in 300 modern trade stores. Overall, its traditional sweets portfolio is now present in 35,000 retail touch-points in India.
“Currently, sweets are manufactured in 10 plants across the country and we plan to add four more plants in Delhi-NCR, Uttar Pradesh and Punjab this year,” says Jayen Mehta, senior general manager (planning and marketing), Amul.
Mother Dairy, too, is eying a topline of Rs.100 crore from the category in the next three years, is expanding its focus across modern trade stores and e-commerce. Taking region-wise consideration, the focus initially will be North India, where the company has 2000 retail touch-points. It has already launched these products on BigBasket and plans to be present on other e-commerce marketplaces by the end of this year. Moving real fast, the company has kept the pricing of its products competitive to gain market share and excel in the marketplace.
“We have limited presence in this category and the aim is to draw customers and hence we are not charging any premium,” says Sanjay Sharma, business head – dairy products, Mother Dairy. According to Sharma, while its competitors are offering Rasgulla and Gulab Jamun in the Rs.230-250/kg range, Mother Dairy has rated them at Rs. 210-220/kg.
Experts are of the view that as there is a decline in HoReCa sales, these brands are trying to tap the traditional sweets market that helps them to utilize the surplus milk production, however, the biggest drawback to their plan is likely to be the lower shelf-life of the milk and milk-related products.
“Though these brands are trying to increase the shelf life of traditional sweets by offering better packaging, it also increases the cost of these products,” says Tuli of Kearney. Given that these brands compete with local shops that offer these products at much lower prices, the cost becomes crucial to their ambition of gaining market share, he further added.
According to Devangshu Dutta, CEO of retail consultancy Third Eyesight, packaged mithai has been slow to take off in the Indian market due to inconsistencies in taste as many of these food products need preservatives and additives to increase their shelf life. Going ahead with his talks, he said that as the brands work on these issues, they are set to gain grounds in near future.