Kellogg India to test waters again in snack food market

Kellogg India to test waters again in snack food market

Pune: In an attempt to tap the growing snack food market in the country and expand its own product portfolio, Kellogg India Ltd, the subsidiary of breakfast cereal maker, Kellogg Co., is testing a range of products that it could launch next year, according to a person familiar with the development.

According to industry estimates, the Indian snack food market was worth Rs1,860 crore in revenues in 2006-07 and is growing at around 16% a year.

Kellogg’s snack food offerings will be low on oil, said this person, who did not wish to be identified.

The company has flirted with the snack food segment previously, notably through the launch of Cheez-It, a brand of baked cheese crackers in 2002. However, the company withdrew this product in 2003 and said it wished to focus exclusively on breakfast cereals.

According to the person familiar with the development, the largest player in the Indian breakfast cereal market has already commenced trials on a range of snack foods, built around its current offerings in the market—corn, rice and wheat flakes.

India’s ethnic snack menu consists of hundreds of snacks from different regions. While these were traditionally prepared at home, the advent of nuclear families and the increase in the number of working women has resulted in a sharp rise in the demand for ready-to-eat snacks.

Companies such as Bikanervala Food Pvt. Ltd and Haldiram Manufacturing Co. Pvt. Ltd are meeting this demand by scaling up their operations and launching new traditional snack food offerings, with longer shelf life and better packaging.

The increasing demand for snacks has also attracted the attention of PepsiCo. Inc.’s Frito-Lay India, which has a growing presence in the ­market.

Kellogg’s first product will likely be chiwda, a traditional Indian snack made usually with puffed rice, but will use Kellogg’s corn, wheat and multi-grain flakes, said the person familiar with the development. Competing products, named corn flakes chiwda, are already available in the market.

Kellogg India director, marketing, Kalyan Bandyopadhyay, declined to comment on the development and provide details, saying the official spokesperson, managing director Anupam Dutta, is out of the country.