Chennai: The sharp price rise in edible oil prices may trim growth rates for branded oils in the near term. Price trends from here on may depend on the global supply scenario, rather than on fiscal measures initiated in India. These were the views expressed by Angshu Mallick, Assistant Vice-President Sales & Marketing of Adani Wilmar, one of the largest marketers of branded edible oil in India.
When asked what impact the recent spiral in edible oil prices may have on the branded oil market, Mallick said, “There may be no shift from branded to unbranded oils. But I do see the rate of growth in the consumer pack segment declining from 20-22 per cent levels to about 15 per cent levels. I wouldn’t attribute this to the edible oil price increase alone, but to inflation in general.”
He points out that the price increase in the food basket — the sharp spurt in pulses, wheat and vegetables — has hit the consumer hard, forcing her to re-evaluate her entire grocery bill.
Will the recent import duty cut on edible oils help temper prices? Though the duty cut has reduced prices by Rs 5-6 a litre at the retail level, much will depend on the global supply scenario, says Mallick. “The market was expecting a duty cut in the Budget; when that didn’t happen prices went up. Prices have corrected recently on the duty cuts; fortunately, international prices have also come down in this period. If global prices shoot up again, there is nothing that the Government can do. Fiscal measures can only take you so far. I think the price outlook will change only if international prices soften,” he says.
Building presence
Having established its brand Fortune, as the largest soybean oil brand sold in consumer packs, Adani Wilmar, a 50:50 joint venture between Wilmar International and the Adani group, is now attempting to build its presence in the packaged sunflower oil and coconut oil segments.
The company, which holds a 40 per cent market share in the branded soyabean oil market, also says that Fortune has recently become the second largest selling sunflower oil brand in Tamil Nadu, after regional brand- Gold Winner. A foray into packaged coconut oils (Naturelle) leveraging on the existing distribution reach, is also on.
Consistency of quality, wide availability and an ad campaign with a Chennai flavour created by O&M Dakshin, have helped the Fortune brand build share, he says.
“The brand’s positioning — guilt-free eating — clicked with consumers. Most edible oil brands tend to have Mumbai-based agencies, but we felt that we needed a South-based agency to crack the Tamil Nadu market,” he elaborates. Tamil Nadu accounts for about 50 per cent of the total sunflower oil sales in consumer packs.
The branded edible oil market tends to be fragmented based on regional tastes.
While soyabean is the oil of choice for consumers in Madhya Pradesh, Maharashtra, Bihar and Punjab, sunflower oil is consumed mainly in the southern States.
While branded soyabean oil is growing at 20-22 per cent annually, the branded sunflower oil market is expanding at 6-8 per cent.
Mallick admits that edible oil, even when sold in consumer packs, offers limited differentiation possibilities and that its consumers tend to be quite price-sensitive, even in urban markets. Fortune sunflower oil is priced slightly lower than the market-leading brand in Tamil Nadu, to persuade the trade to push the brand more aggressively.
When asked what impact the recent spiral in edible oil prices may have on the branded oil market, Mallick said, “There may be no shift from branded to unbranded oils. But I do see the rate of growth in the consumer pack segment declining from 20-22 per cent levels to about 15 per cent levels. I wouldn’t attribute this to the edible oil price increase alone, but to inflation in general.”
He points out that the price increase in the food basket — the sharp spurt in pulses, wheat and vegetables — has hit the consumer hard, forcing her to re-evaluate her entire grocery bill.
Will the recent import duty cut on edible oils help temper prices? Though the duty cut has reduced prices by Rs 5-6 a litre at the retail level, much will depend on the global supply scenario, says Mallick. “The market was expecting a duty cut in the Budget; when that didn’t happen prices went up. Prices have corrected recently on the duty cuts; fortunately, international prices have also come down in this period. If global prices shoot up again, there is nothing that the Government can do. Fiscal measures can only take you so far. I think the price outlook will change only if international prices soften,” he says.
Building presence
Having established its brand Fortune, as the largest soybean oil brand sold in consumer packs, Adani Wilmar, a 50:50 joint venture between Wilmar International and the Adani group, is now attempting to build its presence in the packaged sunflower oil and coconut oil segments.
The company, which holds a 40 per cent market share in the branded soyabean oil market, also says that Fortune has recently become the second largest selling sunflower oil brand in Tamil Nadu, after regional brand- Gold Winner. A foray into packaged coconut oils (Naturelle) leveraging on the existing distribution reach, is also on.
Consistency of quality, wide availability and an ad campaign with a Chennai flavour created by O&M Dakshin, have helped the Fortune brand build share, he says.
“The brand’s positioning — guilt-free eating — clicked with consumers. Most edible oil brands tend to have Mumbai-based agencies, but we felt that we needed a South-based agency to crack the Tamil Nadu market,” he elaborates. Tamil Nadu accounts for about 50 per cent of the total sunflower oil sales in consumer packs.
The branded edible oil market tends to be fragmented based on regional tastes.
While soyabean is the oil of choice for consumers in Madhya Pradesh, Maharashtra, Bihar and Punjab, sunflower oil is consumed mainly in the southern States.
While branded soyabean oil is growing at 20-22 per cent annually, the branded sunflower oil market is expanding at 6-8 per cent.
Mallick admits that edible oil, even when sold in consumer packs, offers limited differentiation possibilities and that its consumers tend to be quite price-sensitive, even in urban markets. Fortune sunflower oil is priced slightly lower than the market-leading brand in Tamil Nadu, to persuade the trade to push the brand more aggressively.
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