Bread maker Modern re-launches brand
Mumbai: Bread maker Modern Food Enterprises Ltd on Friday re-launched its brand with eight new variants along with new packaging and advertising.
With the tag line “Be Like Bread”, the company is introducing healthy breads including ‘Multigrain Superseed’, made from various seeds, whole wheat, ‘Atta Shakti’, and ‘Hi-Fibre Brown’ along with a ‘Milk Plus’ bread aimed at school-going children who need nutrition, Modern Foods chief executive Aseem Soni said.
“We did not see ourselves catering to the evolving Indian consumer,” Soni said. “We wanted to include the younger consumers, millennials and the new Indian women. With this, we have extended our portfolio to health and wellness.”
Soni said the company has invested in its supply chain and logistics to support these variants but declined to share details.
“We are looking to expand our distribution by 50% (within Mumbai) and our revenues by 25%,” he said.
The company, which Hindustan Unilever Ltd (HUL) sold to Everstone Capital in 2016, is looking to consolidate its position in its core business—the sliced branded bread market—this year, said Rajev Shukla, managing director of Everstone.
The new bread variants will first be introduced in the Greater Mumbai region including Mumbai, Thane and other adjoining areas. The company has already launched the variants in the South and in Kolkata, where the company has seen a 5% increase in volumes.
Modern had initially piloted the health and wellness line of breads in the South and saw 15% growth in 2016, Shukla added.
“When we acquired the brand in 2016, it was at Rs450 crore and we want to take it to Rs1,000 crore by 2021,” Shukla said. “We will be getting into new areas and new categories. We are already No.1 in four of the six markets we are in and we touch 100,000 points in the markets we serve directly,” he said.
Modern Foods is also eyeing new categories, particularly Indian breads and baked goods, Soni said.
“We had introduced rotis and Malabar paranthas in Kerala and in parts of Tamil Nadu, and in eight months, we sold 16 million units,” Shukla said. “This is in the South, where roti is not necessarily popular.”
“We got this consumer insight last year that southern markets were adopting the northern chapatis because they want to balance their diets with some whole wheat. The market for chapatis was developing and in the last 4-5 years, a lot of word of mouth has spread on this,” Soni said.
“This was just in some of the large cities in Kerala including Calicut, Trivandrum and Kochi. I don’t know if there is a market for ready-to-eat chapatis in the north. We have a thought process on packaged foods because Modern is much more than a bread brand.”
Modern Foods is planning to introduce its new line of ready-to-eat Indian breads (paranthas and rotis) along with “indulgent” baked goods in the rest of the country. Currently, it is piloting the categories in South India.
“The bakery goods project is on. We are setting up a new vertical within the organization for baked goods—cakes, portion cakes, muffins, cream-filled goods and all that. By the end of this year, we will have a very exciting portfolio. We are working with another global company to understand the consumer and what he wants to make that portfolio,” Soni said.
However, said Soni, baked goods will be distributed through the traditional FMCG (fast moving consumer goods) channels rather than small mom and pop stores that are vital to freshly baked bread.
Meanwhile, Modern Foods is looking to expand manufacturing capacity in the North and Central India where it is not currently present.
“We are looking for partners or acquisitions to strengthen capacity in North and Central India,” said Soni.
Under HUL’s ownership, Modern had shut down its manufacturing facilities in the North and the brand has been absent from North India for about 10 years. For now, the company is working with its six manufacturing facilities, of which four are in the South and one each in Mumbai and Kolkata. Setting up a bakery for bread costs somewhere between Rs4-7 crore, Soni said.
As per a Euromonitor report, the baked goods market is expected to grow, driven by “growing consumption of healthier versions of baked goods, which includes brown bread, multigrain bread, creamless pastries and cakes.” The market for bread in India is relatively small at between Rs6,500-Rs7,000 crore out of the total baked goods market worth Rs27,000 crore, Shukla said. Urban penetration of bread in India is at 34%, he added.