New price points, smaller packs: How Kellogg plans to double India revenue

Kellogg Company, India's market leader in organised breakfast cereals space, aims to double its revenue in the next five years with 20 per cent growth in its business.

Kellogg India will focus on increasing market penetration both in the urban and rural areas. The company is also considering rolling out product variants in smaller packs with new price points.

Smaller packs, priced between Rs 5 and Rs 99, currently account for 20-25 per cent of its sales volume and Kellogg is aiming to increase it to 35-40 per cent in the next few years. 

According to Manmeet Singh, associate vice president (marketing), Kellogg India, a new price point of Rs 49 a pack is under consideration. 

“It is our endeavour to make packs accessible and affordable for the consumer”, Singh told Business Standard.

“We have been aggressively conducting sampling at schools where the product is introduced to the kids; now we plan to take this sampling to smaller towns. The biggest thrust for us in India is to do more trials”, he told this newspaper, adding that this push will help the breakfast cereal maker double its revenues from India in the next 4-5 years.

Although the company has a 70 per cent market share in the organised breakfast cereals, led by the Kellogg’s brand, Singh said, only 3-4 per cent of the total households have been penetrated so far, leaving the company with tremendous potential to tap more of the market. 

The company will also be focussing on customising its products according to Indian taste and preferences to push sales. 

In the recent past, besides coming up with different fruity flavours of its flagship Corn Flakes, the firm launched Rose Badaam, which was tailored for the Indian palette. Besides, the company, on its website, has been offering several Indian recipes made with Corn Flakes. 

“We are still working on coming up with variants to cater to Indian tastes and preferences which I think is crucial for the company to grow”, he said.

The official said that the health and wellness concept has taken off well in India and people now prefer to opt for healthier breakfast choices. In turn, it presents the company with a massive potential to grow its business. 

Kellogg India is also piloting cereal bars in modern trade and will take a call on its introduction based on the response it gets from this pilot project.

The second thrust area for Kellogg is to scale up direct distribution, which will allow the company a better control over inventory and the products, besides helping in geographical expansion.

Out of the total 8 million FMCG outlets, around 750,000 outlets stock breakfast cereal products and Kellogg India is able to service 600,000 outlets.

Singh said this presents the company a huge opportunity to increase its outlet count.

Apart from its flagship product, the company is also aggressively pushing sales of its oats portfolio and Pringles.

The latter, which became part of Kellogg Company post an acquisition, will continue to operate in the premium end of potato snacks and the company has no plans to take it to the mass level and pit it against Pepsico’s Lays or ITC’s Bingo.