Indian breakfast cereal producer Bagrry's takes on PepsiCo with foray into snacks
The Fruit ‘n Fiber cereal maker – India’s second largest player, after Kellogg’s, in the country’s breakfast cereal category with an 18% market share – has launched a range of health-based products such as makhanas (foxnuts), and oats- and cereal-based snacks.
India’s ₹30,000-crore ($4.63bn) snacks segment is still largely unorganized and holds many opportunities, especially in the e-commerce channel, according to Aditya Bagri, director of Bagrry India.
Eye on e-commerce
“Snacks are expected to give a turnover of ₹30-crore ($4.63m) in the first year with e-commerce playing a large part in selling the products,” he said.
“We have been giving a fight to Kellogg’s over the years. With snacks, we will have to contest with MNCs [multinational corporations] such as PepsiCo (Lays), too.”
The ₹120-crore ($19m) company is also stepping up its presence in the breakfast-cereal category by assigning a capex of ₹100-crore ($15m) towards a greenfield manufacturing base.
The 25-year-old company has mills in Himachal Pradesh, Delhi, Uttar Pradesh and Rajasthan in northern India and is now considering a new high tech breakfast cereal facility in either West or South India.
“It is going to be our largest manufacturing plant [to-date] and we expect to set it up with a capex of about ₹100 crore, either in south or west India, since we do not have a plant in these regions,” said Bagri.
Competing with MNCs
The additional plant is expected to help the company compete more aggressively with multinational competitors such as Kellogg’s and PepsiCo in the ₹1,400-crore ($33bn) breakfast cereal market.
Bagrry’s also plans to add organic and so-called ‘superfoods’ such as quinoa as new categories to its portfolio.
The company sells its breakfast cereals in over 70,000 retail outlets around India.
According to Bagri, the company has been attracting attention from private equity funders but Bagrry’s is not in a hurry to get on board with external investors.
“We have been getting feelers from PE funds over the years, but have not taken any funding so far,” he said.
