In the next four to five years, poultry major Suguna Foods is looking to increase the percentage of revenue from processed foods from the current 5% to at least 20%. This comes as the Rs 9,000 crore company announced the launch of its first click and mortar brand, Delfrez, which is a part of the company’s strategic brand restructuring at a group level.
Vignesh Soundararajan, Executive Director of the company said “We are able to see the accelerated growth in the processed segment and our plan is to start focusing on the processed food segment while at the same time trying to drive efficiencies in the commodity business. The live chicken business is a commodity business where both the raw material and the end product, live chicken, are commodities, and the price is not in our hands. We want to keep our costs down and want to drive efficiencies, but the processed food segment’s share has to increase on the overall top line.
Suguna Foods operates four business verticals: Suguna Chicken, which is the live chicken business; Suguna Feeds, where it supplies poultry and dairy feed to the farmers; Mother’s Delight, which supplies refined soybean oil to the market; and now the fourth vertical, the processed foods vertical.
Earlier, both the live chicken and processed food verticals were clubbed together under the Suguna brand, but now the processed food portion will operate under the Delfrez brand, which will be in both the online and offline retail format and will house diverse poultry products. Suguna Foods has invested over Rs 100 crores in the new brand and plans to launch over 1000 outlets by 2025.
The company did face some logistical challenges, but soon after the issues were resolved. However, he said raw material shortages continue to persist. Soundararajan said that while during COVID the company has not grown significantly, it has managed to stay stable throughout. However, he said, there is a gradual but undeniable shift to the brand markets.