'We Are Creating Sustainable Product Portfolio: KRBL'
Why India Gate Basmati Rice has entered the 'health food' segment now?
In 2020, there was a growing awareness of immunity-boosting products that gave a boost to the health range of products as was reflected in our own 'health product portfolio' which saw over 20 per cent growth till Q3FY20. Hence we have ventured into the ‘Health Food’ segment thereby, not just addressing an emerging lifestyle revolution but making it happen as well. We launched products such as 'India Gate Basmati Brown Rice', India Gate Non-Basmati Brown Rice, and Quinoa. It helped the Company to tap a new customer segment while enhancing offtake in the packaged rice segment.
Though there were health products available in the market with the customers broadly recognizing the health, hygiene and safety aspects of branded products, more and more consumers opted for branded rice from established players. This helped India Gate Basmati Rice stay ahead of the curve and helped beat competition from the unorganized sector.
What is the distribution strategy for these products?
Taking cognizance of the fast-growing e-commerce segment, we have strategic tie-ups with both B2B and B2C e-commerce players, such as Grofers, Big Basket, Flipkart, Amazon Pantry, Jiomart, Udaan, and Jumbotail among others. We are seeing over 45 per cent growth in e-commerce sales (on a YoY basis). From an organization pioneering in the wholesale commodity business, today we are transforming ourselves to champion active retailing.
For our existing products (Brown Rice) available for the past 4-5 years, regular trade is the primary source of contribution to the overall sales. Modern trade sales are the next contributor followed by E-commerce. However, e-commerce is the fastest growing platform for this segment now.
What about the marketing strategy?
India Gate Basmati Rice offers products that are transformed to be more meaningful to the customer right at the point of purchase. The “Brown Rice Weight Watchers Special”, “Unity Biryani Rice” and Occasion Special India Gate Classic” answer the core requirements and not mere options on the shelf. Through these disruptive product interventions, we are standing apart from most of our competitors and taking the conversation away from price while delivering value and satisfaction to customers. At the same time, we are constantly learning, evolving, and introducing new products as per the requirements and geographies they originate in.
Give us an industry overview in the Covid year?
The overall business environment remained challenging during the year due to the changes in the regulatory landscape both in the domestic and international markets and also due to pandemic outbreak. However, owing to our strong brand value and wide range of products, we showcased another year of commendable performance. The Indian Basmati Rice Market (total) is pegged at 2.5 million metric tons (MMT) of which the share of un-branded basmati rice is pegged at 1.5 MMT. Of the total branded Basmati rice market of 1 MMT, India Gate accounts for nearly 35 per cent market share, the highest market share for any company in the sector in combined urban and rural areas in FY20. India Gate today commands a 38.6 per cent market share in the packaged basmati rice category. The overall size of packaged Basmati Rice industry is around 1 MMT.
How were the last quarter and 2020 for you?
Our performance during the quarter (Oct-Dec 2020) was underlined by the strength of our brands. The focus during the year had been to further magnify the visibility and worldwide reach of our portfolio and through consistent campaigns and outreach programs we have achieved this. Our Net Debt reduced by Rs 373 crore, with Net Debt to Equity position improving to 0.12x as of December 31, 2020. We anticipate this trend to continue, which will further strengthen our balance sheet and cash flows going forward. The company is on a growth trajectory for almost a decade now and is showing constant improvement in both volume and value growth. We have grown almost 3.25X in the last 10 years alone.
The pandemic period actually proved to be beneficial for India Gate because of increased home consumption and trends of trying new restaurant-like recipes at home. As India’s favorite rice brand-consumer pack sales got good incremental volumes. Also the propensity of new customers acquired due to awareness of buying packaged and hygienic products, India Gate has achieved highest ever consumer pack sales in the Financial Year 2020.
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