New Delhi: Pran and Shan, from Bangladesh and Pakistan respectively, have breached India’s boundaries, but the only people worried are those in the packaged goods business in the country.
Dhaka-based Pran Foods, a $500 million-by-revenue maker of biscuits, juices, and snacks, made around $47 million in 2014-15 by selling its wares in the eastern and north-eastern parts of India. It is now looking to go national and has booked spots on Viacom 18’s Colors, the top general entertainment channel.
Pakistan’s Shan Foods Pvt. Ltd has, over the past few years, become popular in north India, sweeping aside Indian masala brands. According to market estimates, 50-60% of all masalas used in non-vegetarian cooking in north India are made by Shan—and all on the power of word of mouth. The company is now appointing more distributors and also selling through Amazon.in as it seeks to expand its presence to other parts of the country, including the South.
Pran has big plans for India, where the packaged consumer goods business is worth ₹ 3.2 trillion a year. It has already received approval from the Foreign Investment Promotion Board for building a factory in the country. It is now awaiting approval from the Bangladesh government.
The appeal of India is on account of high demand for “ready to eat-foods", arising from an increase in the “number of double-income families and the standard of life", said Kamruzzaman Kamal, director (marketing), Pran Foods.
The company’s deputy managing director Ahsan Khan Chowdhury has been put in charge of the India business.
“Our products will be on retail shelves in Delhi and Chennai within the next couple of months," said Kamal.
Shan was set up by Sikander Sultan, considered the founder of Pakistan’s packaged food industry, in 1981, and now exports to 65 countries.
“It is a must-have at all outlets and it gets the front rows. Not just north India, there is good demand for Shan masala in Kolkata and Mumbai. The brand’s appeal comes from the unique taste, even though it is priced much higher than the Indian brands," said an executive at a retail chain with a national presence who asked not to be identified.
Shan is available in certain areas of the country and is looking to expand its presence, said an executive at the masala company who asked not to be identified because he is not authorized to speak to the media. He confirmed that the company is in the process of adding more distributors to its existing count of 100. The Indian branded masalas market is worth ₹ 12,000 crore a year.
Pran and Shan are the latest in a small (but enduring) line of brands that have managed to cross the border into India from its neighbouring countries.
Wai Wai noodles, a brand owned by Nepal’s Chaudhary Group-owned CG Foods, run by a man considered to be Nepal’s first dollar billionaire, Binod Chaudhary, was an early entrant and made hay during the Maggi noodles crisis.
CG Foods has been looking to expand its presence in the snacks market through acquisitions in the south and west of the country, said Nirvana Chaudhary, managing director, Chaudhary Group. The company is also setting up three new noodle factories in India.
“The opportunity in India is huge. We have plans to venture into other areas in India soon," said Binod Chaudhary, who now spends most of his time in Gurgaon.
CG Group also has interests in tobacco, alcohol, biotech, cement, energy, financial services, banking, telecommunications, consumer appliances, real estate and hospitality.
Other notables in the list of such brands are Dilmah, a Sri Lankan premium tea brand that was once distributed in India by Dabur India Ltd (through a now-defunct partnership with the Sri Lankan company, and which is now mostly available in hotels in restaurants); and Druk, a Bhutanese jam, honey and fruit concentrate brand owned by the Tashi Group which has a subsidiary, Tai Industries, in Kolkata.
“Shan looks the most promising because of its unique differentiation. Pran plays the pricing game. Dilmah is really a big brand but it is premium. Wai Wai has already made strong inroads. Interestingly, Wai Wai and Pran have one thing in common—both of them first targeted under-penetrated north-eastern markets that are not the focus of Indian companies. National play would be tough," said Abneesh Roy, an analyst with Edelweiss Securities.
Indeed, Pran’s presence is largely restricted to the non-metro markets in the north-east, said an ITC Ltd executive who asked not to be identified. This person added that Pran isn’t a “big threat".
Still, such brands could succeed if they have a differentiated product, Roy explained. Then, it could just be a matter of taste.