The huge uptick in volumes in the first four to five months of this fiscal may not sustain, but overall industry growth across various consumer product categories will still be higher compared with the last five years' average, says Srini Vudayagiri director, Unibic Foods India
Srini Vudayagiri, director, Unibic Foods India, said heightened in-home consumption of biscuits and cookies in the first half of the current fiscal could enable the category to report higher growth for the year even though the demand has since normalized with increased mobility and opening up of establishments. Vudayagiri, who is also partner at private equity fund Peepul Capital (a majority investor in Unibic), took over the business at the Rs500 crore packaged foods company in 2019. Vudayagiri added that the premium cookie company is working with tech-enabled distribution platforms to sell its products beyond the top metros. Edited excerpts from an interview:
Obviously with normalcy coming back slowly and steadily, and the supply chain improving, we're reaching what one would call close-to-normal consumption pattern. The huge uptick in terms of volumes that we saw in the first four to five months (of this fiscal), I do not think the same level of growth will happen in the next six months.
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The overall industry growth across various consumer product categories will still be higher compared with the last five years' average. The biscuit and cookie category has been growing in high single digits of 7% to 9% year-on-year, in the last five years. The overall industry, my guess is, will grow somewhere in the vicinity of mid-teens—13-15%—depending on the company, this year. In the December quarter, the growth (for industry players) slowed down quarter-on-quarter. Because we are a much smaller player compared with Parle, Britannia or ITC, we are still growing and will grow in multiples of the industry because of our size.
Unibic had Chyawanprash cookies. Are they more relevant in a post-covid world?
We had this (Chyawanprash cookies) almost ten years back. It was not a big thing even then. Nobody is consuming cookies or biscuits from a medicinal or nutritional perspective. Oatmeal, digestive cookies and sugar-free variants are the closest to the health component. It's just that we relaunched it (Chyawanprash cookies) in a soft roll format, rather than centre-fill one. And they actually had a fantastic reception in our CSD (canteen stores department), which is the armed forces stores. We felt it is an interesting component to bring to the general public in a different format. Yes, there was also this immunity factor—people are bothered about health, hygiene, immunity right now. Companies have launched honey, kadha mixes, etc. We're not even expecting it to become a blockbuster. There is no promotion, extra marketing around it.
Given that in-home snacking went up last year, will Unibic participate in categories beyond cookies?
At this stage, we will continue to play in the larger biscuit market. There is enough and more—it's a market close to Rs40,000 crore in India. We are still a very small percentage of that. If at all, we may look at something beyond cookies at an appropriate time. For example, we're not in Marie or Crackers. It makes sense for me to look at adjacencies within the larger biscuit and cookies segment. And second is adjacencies beyond biscuits. We extended into nutritional bars two to three years back. Similarly, we extended into cream wafers roughly about one-and-a-half years back.
How is Unibic planning to it expand reach beyond metros?
Covid or otherwise, we've been always concentrating and trying to extend our reach. While we started out to be a large-city, large-town player, it is very necessary for us to extend beyond that. Today, we are working towards increasing our depth in tier-III to -IV cities. That's a conscious decision. One of the enablers to that is working with tech-enabled distribution platforms—those who are trying to aggregate the mom-and-pop shops. If I can work with them, they will take me to the next level of higher distribution reach. E-commerce obviously is becoming very important.
Rural markets have outperformed urban ones for most packaged goods companies, will you extend your brand there, too?
The way we approach rural markets today is in two to three ways. We have a small but increasing wholesale channel; where we do not have a direct distribution, we work with them. The second is, we're working with interesting, evolving things. Some of those things are confidential.
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