Kishore Biyani's food & FMCG play gets new wings

Besides manufacturing and marketing, he's working to get his distribution model in place

Nine months ago when Kishore Biyani, chief executive of Future Group, unveiled his plan to transform his Rs 18,000-crore retail-led enterprise into a consumer goods giant, it seemed implausible. Many felt the 54-year-old Marwari businessman was casting his net too wide.

However, Biyani, best known as India's Sam Walton (founder of Walmart), is beginning to demonstrate that he has a concrete plan of action for his food and fast moving consumer goods (FMCG) play. He is eyeing a 10-fold growth for this business, driven largely by his listed Future Consumer Enterprise Ltd (FCEL), in the next five years.

“From around Rs 2,000 crore, which is the current turnover of our food and FMCG business, the plan is to take it to Rs 20,000 crore by 2021,” Biyani said in a presentation on Tuesday.

Besides manufacturing and marketing, which constitute the backbone of his food and FMCG play, Biyani is also silently getting his distribution model in place, notably, in general trade.

The entrepreneur said on Tuesday that his group, which has 360 hypermarkets and 4,000 small stores of its own, had just begun distributing his Tasty Treat range of products in general trade in Varanasi and the plan was to extend this into other markets and cities. “Making our products available outside our stores would be critical,” he said, adding: “We have some ideas on that front.”

This includes tapping not only wholesale channels (distributors and stockists), but also cash-and-carry stores, tying up with state governments (through public-private partnerships; the group runs fair price shops in Rajasthan, for instance), and rival retailers.

Only last week did the Future group tie up with Trent Hypermarket, a joint venture of Tata group's Trent and UK-based Tesco, to supply its own brands in food and FMCG. Biyani says more such tie-ups with rival retailers are in the offing to supply his group’s products in their stores.

The group has also stitched up a few more deals and launched more brands. “The board of FCEL in-principle approved entering into a joint venture with LT Foods for manufacturing, marketing and distribution of rice. We have also unveiled our oats brand Kosh and will get an international premium personal care range called Swiss Tempelle by June this year,” said Biyani.  

Currently, the group has a portfolio of 27 brands under 64 categories, which includes his own as well as those launched through joint ventures (such as Sunkist, beverages brand from California), and acquisitions (such as Baker’s Street and Nilgiris).

Going forward, the plan is to boost this portfolio of brands as Biyani eyes entering virtually every food and FMCG category.

All these plans are expected to be funded with the help of the Rs 365 crore that the group raised recently, Biyani said. “Of the amount raised, Rs 200 crore will be utlised to retire debt in FCEL and the balance will be ploughed into the business.”

BIYANI'S FOOD & FMCG VISION

• Current turnover from food & FMCG: Rs 2,000 crore
   
• Plan is to grow the business ten-fold by 2021: Rs  20,000 crore
   
• Strategy will include a combination of manufacturing, marketing and distribution
   
• General trade is critical to this plan since that will ensure wide-spread
   
• Biyani's Future group has 360 hypermarkets and 4,000 small stores