Eyeing opportunities in the nascent organic millets market which is bursting with burgeoning potential, Kottaram Agro Foods, kept its first foot forward in the year 2011 and there’s no looking back post this. In a span of 6-7 years, they have brought out 20 strikingly innovative organic healthy breakfast products on the back of a strong distribution network and tight sourcing strategy. Here’s a low down of what goes behind creating an up & coming food brand in the retail world, which is already overloaded with wide & varied competing brands…
Ragi, which was always considered a so-called boring food, has finally found its much needed place in the kitchens of India. In a refreshing avatar, it has entered the retail and departmental stores of the country as breakfast cereals and instant dosa and idli mixes. The credit for this goes to Kottaram Agro Foods, which has brought its brand ‘Soulfull’ for the Indian consumers. Incidentally it has been featured among top 15 innovative organic products category globally by a research firm. So, what interested the founders in launching such a super food into the Indian markets with so much conviction?
To start with, the stats resonate with the company’s evolving interest into this stream as India is the largest producer of millets in the world, and accounts for more than 40% of the global consumption. Millet cultivation is the mainstay of rain fed farming which provides livelihood to nearly 50% of the total rural workforce and sustains 60% of cattle population in India. The perception of ragi (finger millets) as food of the poor is changing mainly among those with lifestyle diseases.
Tapping such a lucrative market, Bengaluru-based Kottaram Agro started its experiential journey in the year 2011. Backed by extensive research, they turned ragi into an exciting and tasty food under the brand name ‘Soulfull’. The company aims to bring India’s traditional millets in a convenient and nutritious forms while keeping the tastes and preferences of the modern consumer at the forefront. Soulfull has a range of products that suits different sets of consumers and has worked closely with nutritional scientists to ensure that honesty and good health are the two strongest pillars.
According to Prashant Parameswaran, MD & CEO, Kottaram Agro Foods, “Grains like quinoa are celebrated across the world today and Kottaram wants to bring back ragi and other traditional staples as part of the millet revolution. Millets are good for the farmer, good for the environment and good for consumers – truly a smart product that needed to be adapted to the global consumer.”
Soulfull has conceptualized innovative products that address the need for nutrition and convenience in a wide range of tastes and textures such as ‘Ragi Bites Choco Fills’, ‘Desi Muesli Chatpata’, ‘Oats Millet Masala’, etc. On capturing the growing potential of such nutritional grains, Parameswaran, says, “The tangential outcome of Soulfull products is increase in demand of ancient grains that will address problems of marginal Indian farmers and reduce environmental stresses on land since these grains can grow in arid areas, are pest resistant and need minimal fertilizers.” The company is a Department of Industrial Policy and Promotion (DIPP)-recognized start-up that works with state governments and leading research institutions to promote Smart Foods, which are good for the consumers, the planet and the farmers.
THE ULTIMATE USP
Staying true to the vision was extremely challenging for Soulfull amid the highly growing competitive space. As Parameswaran highlights, “Our challenges have been in constantly innovating while understanding consumer requirements, educating the consumer about the products (most of Soulfull’s products have also created the category they are in), ensuring a seamless distribution and scaling up operations and production with our accelerated growth in the consumer market.”
On defining USP, Parameswaran quips, “Global giants have introduced ‘me too’ products in some of the categories we have introduced. Making consumption of ragi exciting is our USP (delicious millets). Currently the market potential for this category has not yet been fully realized. Our aim is to increase the market size exponentially and benefit from the support by modern retail as well as traditional retailers, aggressive introduction in tier II cities and a deeper penetration into the homes in the metros.”
To drive growth, data analysis and constant feedback from its retail partners, channel partners as well as sales personnel have ensured a healthy inventory level. Placing tremendous trust on retail partners, by helping them plan inventory levels and setting up reorder systems that ensure the consumers get their products at the right time and at the right place, has been our biggest strength in enhancing expanse.
Each product that has been introduced in the market is truly different from products that existed before but is inspired by understanding the consumer better. The Soulfull Desi Muesli capitalizes on the Indian spices and flavors to make the traditional muesli more exciting to its audience. Months of consumer research, going back to the drawing board and market taste test have helped the company create a product line that appeals to a larger audience while not compromising on the nutritional benefits.
KEEPING THE FRESHNESS INTACT
The brand needs to adhere to stringent norms and various measures to keep the crispness and freshness alive till the time it reaches the breakfast table. On ensuring the same, Parameswaran informs, “On the back of this is a comprehensive inventory plan and adopting the latest packaging technology have all ensured that every consumer gets the exact same experience at any date within the shelf life of the product. Our packaging has won international recognition for creating and adopting the Soulfull monster (a friendly monster in various colors that is exciting for our young consumers).”
The packaging of each product line re³ects the personality of the product itself and appeals to its target consumers. “Our superior packaging quality ensures freshness; our innovative reusable tins and shakers make our packaging collectibles in their respective segments and the essential information is presented in an interesting format since we believe our consumers need to have full access to all essential information. So, while our competitors might reduce the font size of the sugar they carry, we highlight the nutritional bene. ts of the jaggery we might have added in a particular product.”
The company’s sourcing norms ensure that the bene. ts get percolated till the grassroot as he shares, “We work directly with farmer cooperatives to ensure that we get the best raw materials. We are assisting these communities by also educating them on processes they need to adopt to increase the value they provide. A systematic hand holding between such cooperatives and organizations like ours will ensure an economic growth to the farmers as well. Government initiatives to encourage such dialogues have been provided to Soulfull both at the regional and at the national level. Noted agricultural scientist and the father of India’s green revolution Dr M S Swaminathan has always been a guiding light for us providing us with invaluable advice on bettering our agro systems.” The Government both at the regional and national level encourages innovation. Support in terms of infrastructure as well as sourcing and visibility is also being provided. “We hope there will be continued support in the years to come,” he adds.
The company does not believe in working with middle agencies who do not add value to the supply chain. He adds, “We connect directly with aggregators in village taluks who source from the farmers. Through government initiatives, we have worked with millet farmers by backward integrating key processes that need to be followed, which will allow farmers to do the last mile value add to their produce, thereby eliminating the need for middle men agencies. Quality standards are then measured before . nal procurement. Government agencies help in collection of high-quality millet produce, which constitutes a major portion of our raw material. Other farm produce (like jaggery, pulses, etc.) are procured from registered vendors of Soulfull using just in time (JIT) systems to ensure zero wastage of resources. Packaging material as well as other essentials are procured in a similar fashion, thereby reducing both our cost of capital on idle inventory as well as cost of storage.”
Talking about the distribution channel, he states, “We have a tiered distribution system with all our major production units in Karnataka and a hub & spoke system, which distributes inventory to major cities across the country. We have localized distribution for standalone stores and centralized purchase order systems for some multi location retailers. We continue to service our institutional and online sales directly from our headquarters.”
Giving insights into the entire value chain, he elaborates that raw materials are centrally purchased but shipped directly to the factory that produces speci. c SKUs. Finished goods are then packed post a stringent quality check. The machine pack is supervised through manual intervention and the finished products from various factories across South India are shipped to the Soulfull central warehouse. “Product mixes are then shipped directly to our registered offices or our distributors or large modern retail bulk purchasers across the country. Shipment from the warehouse to the end consumer has been set up for our online purchases. Each product batch has a unique batch code, which allows us to track both primary and secondary sales from retail outlets as well. With a large shelf life of nine months, we use the FIFO (first in first out) process to ensure efficiency in the supply chain. Lastly we also have a system of stock keeping, which alerts us when stock levels at both primary and secondary are below the buffer stock levels, which ensures an automated reorder system, which is followed through with manual intervention,” shares Parameswaran.
OMNI-CHANNEL RETAIL EXPANSE
Soulfull today has over 20 products launched in just 6 years with the product mix encompassing Ragi Flakes (100% crisp flakes made solely of finger millet), Ragi Bites (ragi pockets .lled with delicious chocolate, vanilla or strawberry – a huge hit with its youngest consumers), Millet Muesli (traditional muesli forti.ed with the goodness of millets), Desi Muesli (muesli with the goodness of millets in exciting Indian flavours), Multigrain Loopies (crunchy breakfast cereal with the power of grains like ragi, jowar, wheat, oat millet meal – Foxtail millet and oats brought in four flavours). Soulfull plans to enter the beverages category with the launch of ‘Smoothix’, a high protein, healthy drink made from 12 natural grains.
As consumers move seamlessly between various retail options for their purchase, it is imperative that brands like Soulfull have an omni channel strategy. With increased online activity and online shopping in the grocery segment and with a steady growth in both organized retail as well as online channels, omnichannel retail is here to stay. The benefits of each need to be accentuated & harnessed and the consumer should get identical brand benefits and communication across channels.
According to Parameswaran, a holistic system is now emerging, which is beneficial to brands, beneficial to consumers and beneficial to retailers. The retail sector today is using information to the maximum, understanding and analyzing both brand and consumer behaviour to maximize their growth. Recent mergers and acquisitions in the retail space have led to the consolidation of efforts and larger stronger players emerging in the market. The value of small kiranas have not been undermined but are today being remapped to play a holistic system. Product category specialists have now diversi.ed, thereby integrating consumer information across product categories.
ARMED WITH INVESTMENTS
Kottaram Agro received an investment by a leading investment house – Aavishkaar recently. This funding is essential to meet the market demands as well as to grow the market itself. Parameswaran says that investors like Aavishkaar have a clear vision and are able to understand the value of firms and the importance of further funds at the right time. They believe in the growth story of .rms like ours and help us realize our dreams.
“We currently are at over 6000 stores across the country and have an aim of reaching 50,000 stores by 2020. As far as the product basket is concerned, we plan to offer cereals with fruits, muesli, and masala upma to name a few, in the future.” The investment scenario is great for entrepreneurs in India who have a clear vision as well as a road map and a commitment to achieve those dreams. Moreover, there are immense opportunities in the packaged foods industry in India which is growing rapidly at 20-25%. The partnership with Aavishkaar will help Soulfull strengthen its product portfolio, accelerate marketing and expand its distribution reach to over 50,000 retail outlets in the next 2 years.
In the end, Parameswaran has a word to share with prospective entrepreneurs… “Though still on the learning curve, I would want to suggest budding entrepreneurs to build a strong team. Do it! Entrepreneurship helps you add value to your nation and create new jobs. Of course, there are ups & downs, it’s important to take both in stride. Do not take short cuts. Trust your instinct but look closely at all data. Always follow Consumer First strategy. These are mantras that we learnt along the way and are now a big part of who we are as a company.”