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| Heinz: Heinz again |
| Sayantani Kar / Mumbai Aug 09, 2010, 00:32 IST |
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Heinz is all set to launch a slew of packaged food products in India. It had entered the country in 1994 after it had acquired Complan malted beverage and Glucon-D energiser from Glaxo. Six years later, it came out with its Heinz ketchup. Ten years after that, it has lined up condiments, juices and snacks.
Turning up late at the party, Heinz is looking to Indianise the flavours it will now launch. Heinz India Managing Director N Thiruambalam said at the launch: “Globally, we are committed to being the trusted source for good-tasting nutritious foods. We try and spot the evolving needs and preferences of consumers.”
Not everybody is surprised at the move. KPMG Advisory Services Manager Anand Ramanathan says: “In fact, Heinz always had Indian flavours such as curry sauces in the European markets.” Heinz, Ramanathan points out, has been a conservative company all along. “In other markets too, Heinz has never been too hasty to launch new products but bides its time.”
In condiments, Heinz has priced its products between Rs 55 and Rs 75 for plastic bottles varying from 280 gm to 350 gm. While it has two chutneys for the Indian palate, Heinz has also launched mayonnaise and three sauces for Chinese cuisine. “It is a market-driven move. The demand for such condiments, be it imports or locally-made ones, has shot up,” says Ramanathan. Some others say that the market for condiments is hugely commoditised, which throws up new challenges for a premium brand like Heinz.
The second category that Heinz has picked is fruit juice — a Rs 7,000-crore market of which packaged brands account for only Rs 2,500 crore (in volumes, branded juices account for even less, only 13 per cent). The category has attracted a number of companies like PepsiCo, Dabur, Parle Agro and FieldFresh Foods (a venture between the Bharti Ventures and Del Monte of the Philippines). Experts feel there is still space for a new layer to muscle in. “Brand
loyalties are low in juices, leaving room for experimenting with positioning,” says Ramanthan.
The launch of ready-to-eat/cook packaged food by Heinz is, however, tricky. The market for these products, while growing, is still riddled with a low rate of fidelity by consumers. “Most companies in this space today focus on marketing rather than technology that might preserve the original taste of the cooked meal. For Indian consumers, that is a critical factor. The freshness has to remind the user of the taste that is close to his palate. Heinz markets packaged ready-to-eat food in other markets but we will have to see whether it can acclimatise users to its products,” says an expert. According to reports, Heinz is readying over Rs 100 crore for investments this year, having spent Rs 300 crore since 2007.
The going will certainly not be easy for Heinz. There are well-entrenched players in the market like Nestlé, Hindustan Unilever, PepsiCo, ITC, Parle Agro, Dabur and others. Despite its global strengths in ketchup, analysts point out, Heinz has not been able to set the Indian market on fire. Nestlé’s Maggi leads the pack with a 41 per cent share of the market, followed by Hindustan Unilever’s Kissan with 26 per cent. On the positive side, it has the strong brand equity of Complan and Glucon-D in the health segment which can be extended to products like juices. It can also leverage their distribution network to reach the juices. The odds are evenly balanced.
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