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Red Hot! The ketchup war gets saucier

Kishori Gopalkrishnan in Bombay

The action in the Rs 1 billion tomato ketchup market in India is getting redder, hotter, sweeter, and what-have-you! While multinational Nestle's boast for its Maggi brand 'Hot & Sweet' ketchup is that "It's different", Kissan's parvenu brand 'Tom-Chi', the latest entrant in this fast-moving gravy train, yells aloud: "Not too hot, not too sweet. It's just right".

With its distribution clout as well as Hindustan Lever's deep pockets behind it, Kissan's seven-month old tomato-chilly ketchup is all geared to take Maggi's Hot & Sweet head-on. HLL have positioned Tom-Chi as a variant to Kissan's ubiquitous plain tomato ketchup brand.

If some fizz could be packed into the bottles, the war could be as bloody as the Cola Wars. Especially given the strengths of the respective armies: the Rs 71.2 billion Hindustan Lever and the Rs 12.07 billion Nestle India Ltd.

Waiting to add an interesting twist to the fight for table space is the $ 10 billion H J Heinz subsidiary, Heinz India, with its international ketchup brand.

The launch of Tom-Chi -- repositioned as a flavoured variant of the Kissan tomato ketchup brand on which the Baby Boomers grew up on -- the battle has now shifted to the flavoured category, hitherto a Maggi's Hot & Sweet monopoly.

Based on the platform of ingredients and taste, an HLL spokesperson segments the market into the plain ketchup, tomato chilli sauce, and the no-onion and no-garlic tomato sauce segments, the last mainly preferred by strict vegetarians, especially south Indians and Jains. "The tomato-chilli sauce segment has been driving growth in the overall category of tomato ketchup in the past two years,'' the Levers man says. To leave no gap, HLL launched Tom-Chi nationally in May 1997.

"The mirch-masala category had started moving a couple of years ago and has since captured over 10 per cent of the tomato ketchup market,'' says Samsika Marketing Consultants managing director Jagdeep Kapoor. And though both players run neck and neck in the plain segment, Maggi's Hot & Sweet ketchup has the advantage of being the first in the flavoured category.

Yet, HLL cannot be taken lightly. Retailers concur that Nestle had upped its Maggi Hot & Sweet (600 gram) stocks in retail outlets countrywide in March-April 1997 to pre-empt Tom-Chi's entry. Within approximately five months of its launch, Tom-Chi's share in the outlets rose 14 per cent against Maggi Hot & Sweet's 16 per cent, retailers point out.

According to an extensive retail audit conducted by Samsika for the organised ketchup market in July 1997, Maggi ketchups had a 53 per cent market share in Bombay, of which the plain ketchup (200 gm, 600 gm, 1,200 gm pack sizes) accounted for 36.5 per cent, the rest being with Maggi Hot & Sweet (200 gm and 600 gm).

The audit, conducted only in Bombay, covered 244 outlets spread over south Bombay, middle Bombay, the western and central suburbs and New Bombay.

If a consumer enters an outlet and a brand hits him without any effort says Kapoor, it is considered a brand with good availability. Maggi Hot & Sweet (200 gm) was way ahead in this game with 75 per cent 'good' visibility, followed by Kissan's 1,000 gm with 50 per cent visibility. Visibility is measured on the basis of an array of subjective parameters such as eye-level display, usage of points of purchase and merchandising.

HLL claims that Kissan, with all its variants, has a 45 per cent market share nationally, both in terms of volume and value. Nestle, for its part, claims a 53 per cent national share in what it says is the 13,000-tonne market. HLL, however, puts the national volume at 17,000 tonnes.

The tomato ketchup segment is currently witnessing a robust 20 to 25 per cent growth. Pegged to see a 40 per cent growth over the next five years, the approximate size of the purees, jams and sauces market in 2005 is projected at Rs 10 billion.

"India is primarily a dip-consuming nation, be it curd with parathas or chutney with dosas,'' points out Kapoor. The shift from home-made dips to tomato ketchup in urban households appears to be a natural process. Urban and semi-urban households are also showing a trend towards a breakfast habit of eggs, hence augmenting the demand for ketchup (to be consumed along with the eggs).

According to research carried out by HLL, there is an increased usage of ketchup by younger adults and teenagers -- and not just children -- both at home and outside. It was to target young adults, who prefer a higher level of spice and chilli as compared to children who like the taste of plain tomato ketchup, that made the marketers launched the variants.