Food and beverage maker PepsiCo Inc. is focusing on the Indian breakfast market with the launch of a ready-to-cook range tailored to local tastes, a decade after the company brought the Quaker brand to India to sell packaged breakfast items.
PepsiCo India Holdings Pvt Ltd launched on Tuesday ready-to-cook idli, dosa, upma and khichdi. The move is part of a global initiative to shift focus from ‘Fun-for-You’ products, such as carbonated beverages and snacks, to ‘Good-for-You’ and ‘Better-for-You’ brands to ensure what global chief executive Indra Nooyi calls a “purpose-driven future”.
The idli, dosa, upma and khichdi, to be sold under the label Quaker Nutri Foods, were developed in collaboration with celebrity chef Vikas Khanna and can be cooked in 3-5 minutes.
“We’ve realised that to win in nutrition in India, we need to tap into local nutrition needs and offer local products which suit the palettes of the Indian consumers,” said Deepika Warrier, PepsiCo’s India vice-president for nutrition.
Towards the end of the year, the company will launch a few more products under Quaker Nutri Foods brand, based on different regional palettes.
Besides the breakfast items, PepsiCo has also introduced fortified juices under Tropicana Essentials—an extension of the popular Tropicana brand—targeted at addressing specific nutrition deficiencies.
Warrior said the new Tropicana Essentials Fruits and Veggies juice is aimed at addressing the gap in the average Indian's fruit and vegetable consumption. The product is priced at Rs30 for a 200ml tetra pack, more expensive than its regular Tropicana juice range by Rs10.
PepsiCo had, a couple of years earlier, launched upma and poha, in what it termed “a test launch”, which did not work out. Warrier said the nutritional case for those products was not presented strongly enough back then. The company has now both upped the nutrition quotient and called it out more strongly on the packaging, she said.
Warrier said PepsiCo has also realised that the Indian millennial—its target for both Quaker Nutri Foods and Tropicana Essentials—wants something familiar, nutritious, freshly prepared and preferably hot when it comes to breakfast. Its aim is to make Quaker Nutri Foods a five-day-a-week breakfast option for consumers.
Quaker had a 13.3% share (value) of the packaged breakfast market in India in 2015, up from 9.5% in 2010, according to market research agency Euromonitor International. US-based Kellogg had a roughly 37% share of the country’s breakfast cereal market in 2015, according to Euromonitor.
The breakfast cereal market in India grew 24% in 2015 to Rs1,440 crore and is estimated to touch Rs2,610 crore by 2020, according to Euromonitor.
But for PepsiCo’s Quaker, the competition goes beyond Kellogg. During the past few years, a bunch of multinational and home-grown firms - including Bagrry’s India, Marico Ltd, ITC Ltd, MTR Foods and Dr Oetkers - made inroads in the breakfast market with products such as muesli, oats, ready-to-cook packets for dosa, idli, uttapam and dhokla as consumer demand rose for healthier, ready-to-cook breakfast.
“With increasing urbanisation, there is a rise in awareness of global brands as well as health and nutrition,” Sangeeta Pendurkar, managing director, Kellogg India, told Mint in a earlier interview. Kellogg wants to make “nutrition accessible and affordable in India” added Pendurkar.
PepsiCo’s Shivakumar said the company has introduced ‘one meal’ packs for Rs 10 to increase penetration. Kellogg has gone a step further – Rs 5 and Rs 10 packs that Pendurkar said would encourage “snackification”.
“The main reason why (many companies are trying breakfast innovation) is a young, floating working population,” said Harminder Sahni, founder and managing director of retail consultancy Wazir Advisors. But what has to click for the packaged breakfast market to take off in a big way is getting consumers to use it almost every day rather than once in a while, Sahni added.
“Category-wise everybody is going after that growth potential but whether Indians convert or not, you never know. So far, the companies that are out there with corn flakes or oats, they are doing okay. Whether Indians will go all the way and become like Americans, I’m not sure so it’s very difficult to predict which company will come out on top,” Wazir Advisors’ Sahni added.
