Moving towards the goal of generating Rs 100 billion revenue from the fast moving consumer goods (FMCG) business in the coming five years, the RP-Sanjiv Goenka group has started exporting its baked snacks to West Asia and will also be coming up with non-baked items.
Offering the 'guilt-free' proposition of low calorie snacking, Guiltfree Industries – the group’s FMCG vertical - makes snacks under Too Yumm brand. So long, its primary proposition to the consumer has been 'baked and not fried' products. Non-baked items may be a significant step in that proposition to the consumer.
“During the first half of the next fiscal year, we will launch non-baked items. Work is under process on this”, Sanjiv Goenka, the group’s chairman said.
For the non-baked category, the company has the eVita brand of snacks. This brand was acquired as part of a deal when RP-Sanjiv Goenka group picked up a controlling stake in Apricot Foods, the previous owners of the eVita brand, for an enterprise value of Rs 4.4 billion.
However, Goenka did not detail on the categories Guiltfree Industries will enter or if the non-baked items will be under a new brand name or under eVita.
Currently, the total turnover from FMCG business is Rs 6 billion, which Goenka expects to go up to Rs 8.4 billion by the end of March next year.
“By June, our FMCG sales is expected to scale up to Rs 900 million a month which will translate into annual sales of Rs. 10.8 billion”, Goenka said.
On the other hand, it is also on the lookout for acquisitions as well as come up with own plants across the country to reach its goal of Rs. 100 billion revenue.
By the second half of 2020, its greenfield plant in Telengana, where it has invested Rs 2.47 billion will become operational. This plant will have a manufacturing capacity to produce 2,500 tonne of snacks a month.
The firm wants to have atleast one plant in each of the zones in the country. Currently, it has two plants in Rajkot in Gujarat and Hyderabad in Telengana which landed up in its kitty as part of the Apricot Foods acquisition.
Around 75 per cent of its production is currently outsourced.
Goenka claimed that the company now has a 3.5 per cent market share in the Rs 180 billion western Indian snacking category. This snacking category comprises mostly of dry items like bhujiya, papdi, kachodi, wafers, chips and others.
It is also adding 30,000 sales points every month and now has an outlet count of 0.45 million.
Launched 17 months ago, the group expects its FMCG business to turn EBITDA positive in the next fiscal year itself during some months.
On the other hand, it has started exporting Too Yumm products in West Asia and Singapore and hopes to start exporting to Malaysia, Indonesia and Europe in the near term.
The RP-Sanjiv Goenka group had announced demerger of its widely spread business under CESC into different verticals. After approval from the NCLT, it is now awaiting response from SEBI over listing two entities.