Kellogg India plans to expand distribution

Kellogg India, a leader in the breakfast cereals market, plans to expand its distribution network to penetrate deeper into existing markets (urban) and enter newer markets (Tier II and Tier III).

“We will further strengthen our brand positioning in India through an advertising and distribution expansion. Over three years, we have more than tripled our distributors (around 1,400 currently). We are increasing our marketing spends, too,” Anupam Dutta, managing director, Kellogg India, told Business Standard. He, however, did not give any figures.

Kellogg claims to have cornered 70 per cent market share of the breakfast cereals market in value terms. The company is also betting big on its Kpak (Rs 10 pack) strategy to add new consumers. In November 2007, it launched Kpak to lure more consumers. Dutta says, “Kpak is helping us adding new consumers. The response has been very good. Consumers are picking up multiple Kpaks and upgrading to larger packs.” Small packs also help add new consumers on basis of available variants.

PepsiCo and Heinz too recently entered the market. “While PepsiCo’s Quaker Oates has been doing quite well, it’s not an immediate competitor. But in future, if PepsiCo introduces cereals products, it will cause tough competition. Heinz is a more serious competitor. Also because of its Complan brand, it fits the category better,” according to Anand Ramanathan, Manager, Business Performance Services, KPMG.

Dutta says the company has no plans to diversify in other categories in the foreseeable future. Adding, “Breakfast cereals’ market In India has enough room for us to grow. We will continue to focus on this in near future.”