Dr. Oetker - A Leading Manufacturer of Branded Packaged Food Products Aims to Own a Sizeable Market Share in India
Dr. Oetker India Pvt. Ltd., established in 2007, is a leading manufacturer of branded packaged food products with a focus on western food products. Dr. Oetker acquired Delhi based FunFoods Pvt. Ltd in December 2008 which has been present in the country since 1983. FunFoods is the market leader in Mayonnaise, Italian sauces, Sandwich Spreads, Salad Dressings and Peanut Butter apart from being present in Chinese Sauces, Mexican Sauce & Dip, Milk Shake Mixes, Cakes and Dessert Toppings. With a state-of-the-art manufacturing facilities and a Pan India sales network, it currently has 65 SKUs / 57 products on the retail shelves. In 2015, Dr. Oetker embraced an umbrella branding strategy with Dr. Oetker as the parent brand and FunFoods as the sub-brand, thereby complimenting its range of products with new packaging which offer an international style and appetite appeal. Since then, the company has worked meticulously to introduce various international and fusion flavours with emphasis on taste, flavor, aroma and packaging.
Mr. Oliver Mirza is the Managing Director & CEO of Dr. Oetker India Pvt. Ltd. An industry veteran with over 25 years of food business experience, Oliver in his current role is responsible for managing and growing the business of Dr. Oetker in the country with full P&L responsibility.
In an interaction with Sujata Sangwan of BW Businessworld, Oliver Mirza is the Managing Director & CEO of Dr. Oetker India Pvt. Ltd. shared his entrepreneurial journey and future plans of the company.
Excerpts:
How has been your journey with Dr. Oetker so far?
The journey as a brand and as an individual in India has been very enriching. Dr. Oetker came to India in 2008 and I was one of the founding members. We started with products from our international basket but realised very early that in Indian our products won’t work. We quickly revised our market entry strategy and decided to acquire a local company with business somewhat similar to what Dr. Oetker does internationally, that is western comfort food. We had several companies on our radar and decided to acquire FunFoods which was present in India since 1983. Since then, we haven’t looked back. Over the years, we have researched and introduced products to suit the company strategy, Indian market and our target audience. The testimonial to our success is that there has been sustained growth in revenue since 2008. We are now the leaders in Western Sauces & Spreads category in the country.
What are the company’s present traction details and future plans?
We closed last year at INR 165 crore. Our retail sales have grown by 10 times since 2008. Currently we are the leaders in the mayonnaise market owning a whopping 70% market share. The Future of Mayonnaise looks very bright and it is expected to be INR 1000 crore market by 2020 and our vision is to own a sizeable market share. As a market leader it is our responsibility to grow the category and we have already started work on it by launching first ever advertisement campaign on Mayonnaise.
Our strategy is to educate consumers that FunFoods Mayonnaise is the magic ingredient which helps mothers create juicy sandwiches, wraps, burgers or even a creamy white sauce for macaroni and other recipes at home.
We are also leading in Italian Sauces, Sandwich Spreads and Peanut Butter. Our plan is to grow these markets considerably over the years.
How big is the market and what opportunities are you looking out in future?
The Indian food market has evolved over the last few years with growing consumer base and opportunities. Food retailing sector has also grown into a significant and profitable sector and there is a sizeable population which spends almost 50% of their income on food. The sauces, dressings, and condiments industry grew by 18% in 2015 and is further expected to witness a 7% growth for the period 2015 – 2019. To capture the growing market, our focus is on our core range of Western Sauces & Spreads. Our aim is to educate consumers on the versatility while exploring the untapped territories and other segments simultaneously. We also plan to re-enter the muesli market with the introduction of Vitalis - the second sub-brand under Dr. Oetker. It will be followed by introduction of Frozen Pizzas in the next few years.
What have been your biggest learnings?
My biggest learning in India has been- “Whatever we do internationally nothing works here and we need to innovate for the local culture”. It is important to understand India with its own needs and expectations in its entirety. We have done a lot of researches like UNA (Usage and Attitude) and shopper’s study, whether it was on Spreads, Italian Sauces, Mustards, or Mayonnaise and then created our range to suit the consumer needs. Mint mayo, Garlic mayo and Tandoori mayo for example are a few Indianised variants we launched which are specially created for the Indian palate.
What are the current challenges?
Education plays a pivotal role as consumers are still unaware of what all can they do with a product like Mayonnaise. Though, Mayonnaise has successfully made its way from super-mart to kitchen shelves, it’s imperative to push and drive awareness about the usage and benefits of products in today’s scenario owing to the brand clutter.
Another problem is a few consumer’s preconception that mayonnaise comes with cholesterol and a lot of fat. Which is not true. We sell around 95% veg mayonnaise which is 0 cholesterol and only 25-50% fat which is even lesser that butter which has around 82% fat. We fight this preconception through various initiatives but we believe it will take some time for consumers to understand this.
Another challenge for many other brands is sustaining top-of-mind recall and brand loyalty among consumers. However, we as a brand don’t have to worry about this as consumers love us and we are the first preference.
What advice you want to share with the young entrepreneurs?
Understand your market and your target audience before going ballistic. Once you’ve done that don’t be afraid to take risks and experiment.
What has been the hits and misses of the Modi Government of last 3 years?
India, in the last three years has seen many positive policies from the Government of India like digital India, Skill India, Make in India, Swachh Bharat and many more. We are very delighted to be part of various such initiatives. For example, launch of our new state of the art production facility in Kaharani is a testimony to ‘Make in India’.
Implementation of the GST is also a step in the right direction. However, we hope the government re-considers GST rates on some of the processed food items.
