Home / Companies / News /  Global Consumer Products readies south India launch

Bengaluru: Global Consumer Products Pvt. Ltd, the packaged foods start-up founded by former Godrej Group executive A. Mahendran, is close to launching branded chocolates, candies and fruit-based beverages, starting in south India.

The company will be competing with heavyweights such as Mars Inc., Nestle India Ltd, Mondelez International Inc., ITC Ltd and Dabur India Ltd.

Global Consumer Products, which received 315 crore in funding from the likes of Goldman Sachs and Mitsui Global Investment last year, is targeting a revenue of $200 million (around 1,250 crore) over the next five years.

Mahendran has hired key employees from companies such as Britannia Industries Ltd and Ferrero Group, and plans to launch products in proven markets such as Bengaluru in Karnataka, before moving on to other southern states.

“As a start-up, it becomes difficult to be a pan-India player, so it’s better to focus on one region," said Mahendran, who is also the chairman and managing director of the company. “We are progressing towards the launch, In another two months or so, we will roll out our confectionery range, in multiple states across south India."

Mahendran has hired Anuradha Narasimhan, former marketing head at Britannia Industries, as executive vice- president, sales and marketing. He also brought in Ferrero India’s former financial chief Kamal Kumar Agarwal as chief financial officer.

In 2012, Mahendran quit as chairman and managing director of Mumbai-based Godrej Consumer Products Ltd, the maker of Cinthol soap and Ezee washing powder, to start his own company months later, seeking to sell packaged foods and beverages in India.

After years of experience in the consumer goods industry, Mahendran said he wanted “to get in to food and beverage space, with limited constraint on capital, entry and brand building".

“We will get into both confectionery and beverages simultaneously," he said.

The company is finalizing third-party manufacturers and marketing plans for the products, as Mahendran focuses on an asset-light model that will entail farming out work to other entities.

In India, “the supply chain and manufacturing is pretty robust, so I don’t see any reason why we should invest money in manufacturing?", Mahendran said.

Apart from confectionery and beverages, the company is also seeking help from its Japanese investor Mitsui to expand in the snacks category.

“We are in the process of developing snacks, that’s where we our shareholders come in, they have interests in the food and snacks business," he said. “We are seeking technologies or even products from our partners that are transferable."

Corporate and investor interest in the packaged food and personal care markets has increased as middle-class consumers shift to branded or packaged goods from local makes.

“Clearly, Indians are climbing up the value chain when it comes to consumption of packaged foods, snacks, etc.," said Rachna Nath, leader of the retail and consumer practice at consulting firm PriceWaterhouseCoopers.

India’s packaged consumer goods market, comprising categories such as home care, personal care and food products, was worth $37 billion in 2013, By 2016, that number is expected to touch $49 billion, according to estimates by market research firm Nielsen.

Euromonitor pegs India’s chocolate market at 10,000 crore and the overall beverages market at $5.2 billion by 2015-16.

Domestic companies such as ITC and Dabur India have launched multiple variations of fruit-based drinks. More recent entrants into the market such as Hector Beverages, the maker of paper boat beverages, have also generated investor interest.

Global Consumer Products doesn’t rule out acquisitions for faster growth. “We could look at inorganic opportunities to grow and keep acquiring businesses as we progress. But our fundamental plan is to grow in an organic way," Mahendran said.

Subscribe to Mint Newsletters
* Enter a valid email
* Thank you for subscribing to our newsletter.

Never miss a story! Stay connected and informed with Mint. Download our App Now!!

Edit Profile
My ReadsRedeem a Gift CardLogout