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Rediff.com  » Business » F&B companies are out to cut your flab

F&B companies are out to cut your flab

March 14, 2007 02:41 IST

Aarti Gupta visits the supermarket every fortnight to stock up on ice cream, carbonated soft drinks and chocolate. Recently, though, she's stopped watching the calories so closely because these standard treats have got lighter.

Gupta may not be part of a crowd yet, but for food and beverage (F&B) companies in India, she is an important element in their marketing strategy. Which is why, for health-conscious consumers like her, a range of healthy variants are being launched across categories in the Rs 25,000 crore ($ 5,680 million) F&B space in India.

Edible oils started the trend some years ago and colas followed. But now, everything from ice cream to curd, sugar, butter, biscuits and tea are available in zero-calories or low-fat versions. In the last few months, Swiss foods giant, Nestle has launched healthy variants across Kit Kat chocolates, Maggi soups, noodles and in Nestle milk and dahi.

Local foods major Amul has also launched sugar-free and Pro-biotic variants in ice creams and will soon roll out sugar-free chocolates.

Two days back, Tata tea launched Life, a black tea variant with herbs. The company has also rolled out green tea under the Tetley brand about four months back. Growth in several of these categories is quite rapid. A report on Insights in Growth of Food and Beverage Products by market research agency AC Nielsen released last week says edible oils are among the highest-growing categories. Growth here is driven primarily by oils positioned on the health platform.

"Brands positioned on the health platform are doing well in India. While sports drinks show a lot of promise, milk-based beverages are also on a high-growth path," said Bijal Jadav, Senior Manager in charge of ACNielsen Global Services in India. High growth is not necessarily on a large base. Health foods or, for that matter health drinks, are still an insignificant part of the brand portfolio. In categories like biscuits, health variants account for about one per cent of the Rs 5,000-crore- category.

 In the roughly Rs 6,000-crore edible oils market too, the health variants account for less than five per cent of the pie. In tea the contribution of health variants is negligible, says a Tata Tea spokesperson. These three categories account for 50 per cent of the Indian F&B market.

The small contribution is partly because the products are niche by nature -- limited to a section of urban consumers -- and partly because the launches are too recent to make an impact. "These categories probably help the companies communicate that they have products for everybody.

But they are likely to be niche categories and not reach a tipping point," said a marketing consultant. All the same, marketers are confident that the consumers will shift in larger numbers. Take the case of Gujarat-based Adani Wilmar that recently launched Fryola, a low-absorb oil for deep-frying. Angshu Mallick, general manager, sales and marketing, Adani Wilmar said that the brand is expected to contribute about 10 per cent to overall brand sales over the next year.

Others add that the health promise will bring in a new set of consumers. "The brand gives us access to customers who earlier would not be consuming our products," said V J Matthai, assistant general manager, Gujarat Co-operative Milk Marketing Federation.

Also, margins on "health" products tend to be higher since consumers are not averse to paying a premium on products that promise health benefits. In categories like edible oils, margins on the healthier variants tend to be higher by four percentage points over the regular offerings. In other food categories the difference can be as high as eight percentage points.
Priyanka Sangani & Prasad Sangameshwaran in Mumbai
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