Private-label biz joins big retail, housewives in a win-win deal

Private-label biz joins big retail, housewives in a win-win deal
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First Published: Mon, Feb 25 2008. 10 46 PM IST

Local touch: Damayanti Thakkar (standing) makes snacks for Food Bazaar at her home in Mumbai’s Dombivili suburb. She says she’s got a new sense of self-respect when she see her own label in such a big
Local touch: Damayanti Thakkar (standing) makes snacks for Food Bazaar at her home in Mumbai’s Dombivili suburb. She says she’s got a new sense of self-respect when she see her own label in such a big
Updated: Mon, Feb 25 2008. 10 46 PM IST
Standing outside the buzzing mall’s Food Bazaar store in Mumbai’s Vashi suburb, 72-year-old Damayanti Thakkar has convinced the store’s security guard to abandon his post and help her dial a number on her cellphone.
Wearing a saree that is draped in the traditional way with a handkerchief sticking out, a woollen scarf, a prayer book and assorted medicines jutting out of her purse and dragging a cloth bag full of traditional snacks, she seems strangely out of place in the mall filled with call centre workers out for a quick lunch and college students out to get a taste of Western clothes and food.
Local touch: Damayanti Thakkar (standing) makes snacks for Food Bazaar at her home in Mumbai’s Dombivili suburb. She says she’s got a new sense of self-respect when she see her own label in such a big store. (Photo: Ashesh Shah/ Mint)
But Thakkar has her very own corner at Food Bazaar, the food and grocery store chain from Pantaloon Retail India Ltd, India’s largest listed retailer. Her women’s self-help group, called Jagriti Jyot Mahila Grih Udyog, is one of several that supply snacks that Pantaloon’s parent, the Future Group, tested at five Food Bazaar outlets in Mumbai and will now expand nationally.
While women’s groups do supply to traditional and modern retailers, Pantaloon has created a brand under which it will sell these items. By calling the brand “Thank You Aunty” and writing the origin of the snacks that are found in most Indian homes, it has created an emotional connect with the snacks that the housewives make.
Next, the company will source petticoats for saris from a women’s self-help group in Varanasi, India’s best known holy town, for a label to be called “Helping Hands”. The brand’s packaging will have hand imprints on it and will later include cushion covers, pillow covers and baby clothes to be sold at Big Bazaar stores. That’s not all—the retailer has also given a live kitchen at its Thane store to a women’s group and is planning to roll out the Thank You Aunty label in Pune.
“We say that these are not touched by a cold machine but made by warm hands,” says Damodar Mall, the group’s head of innovation and incubation. “We feel the poor have a competitive advantage in this space because of how Indian tastes are. Customers say they do not want to outsource their kitchen. They want food made at home.” And sure enough, Thakkar and her group of five women cook in her home in Mumbai’s far-flung suburb of Dombivili, cutting, frying, drying and packing snacks in the balcony of her house.
The connection between India’s largest listed retailer and the frail housewife may seem a bit odd in the backdrop of the ever-mounting resistance to organized retail in India from concern it will rob millions of small entrepreneurs and mom-and-pop stores of their livelihood.
Turns out, Thakkar is a canny entrepreneur, having run embroidery and then snack businesses for 52 years. She frets about whether publicity through this article will cause tax problems and how margins for her snacks are just not enough.
But even for a spunky businesswoman like her who thought she had seen it all, modern retail has brought new learning. She now has to get her packaging made, bar coding done and even cook more hygienically.
Typically, the Future Group starts with finding out from what community people near that store are from.
Accordingly, Thank You Aunty snacks are either Gujarati or Maharashtrian in keeping with the palate of the neighbourhood. More regional snacks will get added as the label expands outside Mumbai.
“As long as suppliers are local, tastes are too and the closer we are to the catchment area’s taste, the better it is for us,” Mall says. So, the group’s food technologists visit the homes where food is made and recipes may be tweaked so food lasts longer and basic rules such as regular pest control are set down to make sure some standards are adhered to.
In Varanasi, too, the group zeroed in on a women’s self-help group that buys and cuts fabric for petticoats at a central facility and the women stitch them at their homes. To help them along, Future Group sent them fabric samples so that they could buy the same quality and taught them a new cutting technique that would use 10% less fabric, and created the branding and packing. But Mall says that while customers may like home-made food, home-made cushion covers may not have a special charm. But sourcing from such groups maybe marginally cheaper and the branding may help the store, experts say.
“This is linked with extending the private label strategy for stores,” says Gibson Vedmani, chief executive of the Retailers Association of India, a retail industry body. “The store gets an exclusive brand through this, so it is a win-win situation for both the retailer and the self-help groups.”
Arvind Singhal, chairman of KSA Technopak Advisors, a New Delhi-based retail consulting company, says that while the business model may not be clear, such a brand helps companies connect with consumers. “It helps the retailer engage with the community, make them seem like a part of it. But I am not sure how scalable it is because there is only a limited product range that can be made at home and that consumers want.”
Vedmani says more retailers could adopt such sourcing as they move towards private labels, given that private labels provide higher profit margins to retailers. Also, Pantaloon’s move comes at a time India’s fledgling organized retail sector is under increasing attack because its growth could mean a loss of jobs for India’s more than 12 million small retailers.
Thakkar travels hours by bus to replenish her counters at the four stores where she sells her chakli and shankarpala.
On this winter day she has taken a two-hour bus ride and a half-an-hour scooter ride to bring her snack-filled cloth bag to the mall. She has made Rs573 for her weekly supplies today and grins as she shows her counter. “I have got a new sense of self- respect when I see my own label in such a big store,” she says.
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First Published: Mon, Feb 25 2008. 10 46 PM IST
More Topics: Retail | Housewives | Private-label | Deal | Stores |