Stores in malls make sense as people are willing to spend here: Anupam Saluja

Interview with CEO, Cookie Man India

Cookie Man, the premium cookie brand visible in many of India's malls, had entered India about a decade ago. It is now on expansion mode not only in the metros but smaller towns as well, as the latter register a healthy growth in the number of shopping malls. Anupam Saluja, CEO of the Indian arm of the Australian cookie major tells Digbijay Mishra that it is looking to venture into lounges on high streets. Edited excerpts:

What is your footprint and how do you plan to expand?

We have got 62 stores as of now, and by October-end, we are looking at 70 stores in 30 towns. We are looking at 300 stores in the next five years. We should be touching 100 stores by March, 2014.

Why are you more focused on malls?

We started in a mall in Chennai. Opening stores in malls is much easier because every consumer going to a mall wants to spend something. If nothing else, a person will atleast end up spending Rs 200 on something or the other. So, the mall market makes sense for us.

Going forward, would you stick to malls?

We started there (malls) but now have opened shop in airports. We have got five airports. IT parks will soon follow, as will high streets.

Will you have a different format for high streets?

For high streets, we will have lounges. We have spent Rs 21 crore so far, and another Rs 25 crore is allocated for retail expansion. We will come up with a factory when we have about 150 stores.

Which segment of the cookie market do you target?

Cookies are nothing but premium biscuits. The biscuit market is about Rs 12,000 crore and the premium end is 1 per cent or about Rs 120-130 crore. But it's growing at double the pace at 12-15 per cent.

Will urban markets be your playground then?

The premium segment exists in the top 10-15 cities. We are present in metros but we have also gone into smaller cities like Durgapur, Shillong, Bhubaneshwar, Siliguri, and Gangtok in the east and Chandigarh, Bhopal, Raipur, Baroda and Surat in the north.

In few years, smaller towns will see an explosion of malls and people will start buying lifestyle products, including cookies.

But do the returns make sense?

Smaller towns have less revenue but the expenditure is less, so the return on investment would be almost the same. Tier I cities may return ten per cent more than tier II and III.

Other biscuits companies are also premiumising their cookie offerings...

Our offering is really niche. We are in a different space from these guys. A major difference is we are selling freshly-baked products.

In our segment, we are the leaders as very few players are priced beyond Rs 500 per kg . We sell for around Rs 540 for a kilo of cookies. So, there is no direct competition.

How big is your corporate business?

We do a lot of that and it is at present about 25 per cent of our revenues. We will continue to do 25 per cent, but don't forget that our volume is going to grow.

Who is your audience?

Women are our core buyers.