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Bagrry's rides the breakfast wave

The New Delhi-based company remains among the few homegrown brands in a space dominated by multinationals

Viveat Susan Pinto  |  MUMBAI 

Bagrry's rides the breakfast wave

Jars with the characteristic red-colour caps as well as large boxes neatly line-up the food counters at the neighbourhood supermarket. The New Delhi-based Bagrry's is not a new entrant to the Rs 1,000-crore breakfast cereal category, but the homegrown brand is making its presence felt now.

Apart from finding prime placement for its products on shop shelves, the company has launched a blitzkrieg of ads in newspapers, on social media platforms, at hoardings at bus-stands and even on cabs over the past month. Bagrry's, founded by first-generation entrepreneur Shyam Bagri in the 1990s, is going the whole hog to draw consumer attention in key cities as it pitches for a large chunk of the breakfast cereal market, which is growing at a pretty fast clip. While corn flakes as a category is growing in single digits, both oats and muesli are growing in double digits, at 25-30 per cent per annum say industry sources.

This is the first time, the company admits, it has opted for an advertising burst of this magnitude. But it is critical to do so, the firm, which began as a flour miller 50 years ago says. For one, the goodness of muesli has to be espoused to change the breakfast habits of a people more used to traditional fare. It is also imperative to campaign aggressively if the brand has to wrest attention from its noisy multinational rivals.

Bagrry's rides the breakfast wave
The smallest of the three sub-categories that make up breakfast cereals in India, muesli, at Rs 100 crore in market size, is also the most expensive owing to the high-fibre content that goes into it. Unlike cornflakes and oats, the other two sub-categories within breakfast cereals, muesli includes everything from dry fruits, nuts, grains and flakes. Cornflakes, pegged at Rs 600 crore in size, and oats, at Rs 300 crore, do not have such an assortment, experts say.

Companies such as Bagrry's are keen to establish their credentials in this market. According to director Aditya Bagri, Bagrrys is also creating multiple options that include honey, fruits and even oats within muesli. "We have twelve variants of muesli, something that we have invested significant time, money and energy to create," he says. The brand, according to industry estimates, remains the leader, cornering half of the domestic muesli market.

Muesli is gaining popularity as consumers are increasingly switching to healthier lifestyles and food options. It has also found favour with the vocal and influential community of diet experts and planners who recommend the cereal as a wholesome morning meal, one that will keep consumers fit through the day. For the increasingly diet and fitness conscious urban consumer, these recommendations are playing a huge role in changing their breakfast habits.

Kellogg's, a key rival of Bagrry's, already has four muesli variants in the market, and is expected to bring in more offerings as the cereal gains traction. German major Dr Oetker, which had earlier launched Vitalis Crunchy, Germany's top-ranked muesli, in India, is also expected to beef up its presence in the space, industry sources said. While PepsiCo and Marico remain key players in oats, experts tracking the market say, there is a possibility of these companies taking the plunge into muesli as well in the future. The reason for all this action is the rapid growth rate of muesli sales. These growth rates are also pushing up the overall growth of breakfast cereals in the country, which at 10 per cent per annum is decent, say experts.

"At a time when discretionary categories in general have seen a slowdown, breakfast cereals as a whole have grown at a reasonable pace," Arvind Singhal, chairman, Technopak, says. "Individual categories such as oats and muesli though have grown ahead of the market," he says. Players such as Bagrry's are wasting no time in taking advantage of this boom. The company has a presence in oats besides muesli and is also looking at the possibility of stepping into corn flakes. "We are not ruling out corn flakes," Aditya Bagri said in response to a specific question on the issue. He declined to specify timelines though.

The company has also increased its cereal manufacturing capacity at its plants in New Delhi and Himachal Pradesh respectively. It is working at the same time on improving its presence in general trade. "While Bagrry's is modern trade-skewed, we are present in 50,000 of the top traditional trade outlets in the country. The plan is to add 50,000 more traditional trade outlets in the next few months," Bagri says.

The company is also developing more options in muesli and oats, focusing on imported raisins, fruits and nuts. While oats under Bagrry's is priced at Rs 175 per kg, a one-kg jar of muesli is available for Rs 460. "If you look closely we are priced on par with the MNCs," Bagri says. "Oats is a competitive market so we have to be at the same level as them. In muesli, a 500-gram box of muesli from rival companies is available for Rs 270. The price doubles if you take a one-kg pack. In that sense, we are quite aggressively priced," he adds.

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First Published: Tue, January 19 2016. 21:10 IST