Future Group plans to overhaul retail chain Nilgiris
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Bengaluru: Three years after buying supermarket chain Nilgiris, an iconic brand and early mover in organized retail in the southern part of the country, Kishore Biyani’s Future Group has embarked on an exercise to transform it to appeal to younger customers. This involves both a makeover of the stores and product innovation said company executives.
Founded in 1905, Nilgiris has a strong presence in Tamil Nadu and Karnataka and is especially known for its in-house bakery and dairy products.
Nilgiris, which has around 170 franchised stores, of which 100 are in Tamil Nadu, plans to take the count up to 380 stores in 2017-18 and to 1000 stores in the next three years.
The company also expects revenue to reach Rs4,000 crore (from Rs780 crore now) by 2021. By then, revenue from the sale of its in-house Nilgiris products will increase from Rs200 crore to Rs2,800 crore.
The first made-over Nilgiris store was launched in Bengaluru’s Old Airport Road in June. “This is the first next-gen store and soon all the other stores will have a new look. The idea is to attract millennials while keeping the traditional core of the brand intact,” said Nikunj Biyani, director, Future Group.
In 2014, Future Consumer Ltd, acquired 97.97% of Nilgiri Dairy Farm Pvt. Ltd (NDFPL) for Rs300 crore. Private equity firm Actis held 66% in Nilgiri’s.
Apart from store transformation, Future is also working on product innovation including value-added products and new packaging.
Nilgiris has just launched wafflets, kettle chips and Greek yoghurt. It plans to launch a yoghurt-and-cereal combo in July and cold coffee the following month.
“As of today we have lots of products under the snacks category; however not so many under the ready-to-cook/ready-to-eat one. We believe that there is huge potential in this category,” said Venkateshwar Kumar, CEO-South, Future Retail Ltd.
“As new owners, the Future Group is looking at other plans. I would say it is timely because Nilgiris is a very old traditional company. It has been very successful in its home market but this is Future Group’s way of making it more contemporary,” said Harminder Sahni, founder and managing director of retail consultancy firm Wazir Advisors. Sahni said it is essential for Indian supermarket and food firms to periodically reinvent themselves.
“With today’s millennial customer being digital, super market chains across the globe are trying to transform themselves to align with the needs of the digital customers. Smarter layout designs, online engagement models as well as products lines which suit the new customer are some of the initiatives we see today,” said Sreedhar Prasad, partner, KPMG in India.