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This article was first published 6 years ago  » Business » From Rs 15 lakh to Rs 1K crore: The meteoric rise of Prataap Snacks

From Rs 15 lakh to Rs 1K crore: The meteoric rise of Prataap Snacks

By Samreen Ahmad
April 30, 2018 08:26 IST
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Among the top 10 fastest growing consumer brands in the country, Yellow Diamond leverages the growing preference for local flavours in the snacks market, says Samreen Ahmad.

The Indian market for snacks is expanding and turning itself inside out to keep in step with an expanding set of consumers, who are not only eating healthy and munching local, but are also increasingly choosing branded over unbranded fare.


Leveraging the trend is Indore-headquartered Prataap Snacks that has in the past eight years transformed itself from a single-product company to one with multiple branded savouries in its portfolio.

The company has moved quickly to position its Yellow Diamond brand as a home grown challenger to rivals such as PepsiCo (Frito-Lay) and Parle and as a nimble, young competitor to traditional Indian labels such as Haldirams.

The company is ranked among the top 10 fastest growing consumer goods companies, according to Nielsen data for 2017 and among the top five brands in the salty snacks category.

Agility, a strong understanding of local palates and smart packaging have helped say analysts and brand experts.

“While it is not easy to fight the strong distribution and brand equity of a multinational firm, a local player may have an advantage of making necessary changes in products and strategy sooner, with low overheads,” says Amit Kumat, managing director and chief executive officer, Prataap Snacks.

He is also alert to the need to provide a healthy snacking portfolio, even though the segment is still niche in India.

“We have been looking to develop products and will continue to do so,” he adds but refuses to divulge any further details.

The Rs 30,000 crore market for savoury snacks in India has seen a number of new launches in recent years and a few upsets in the brand table; Euromonitor’s report for 2017 shows Haldirams dislodging PepsiCo as the leading brand in the packaged snacks segment with 12 per cent share of the organised market.

Several surveys show that like many other Asian markets, Indian consumers are hooked to desi flavours.

Many more are snacking on branded bhujia, sev and moong dal than ever before.

And that has helped companies such as  Prataap that started with a seed capital of Rs 15,00,000 in 2009-10 to touch the Rs 1,000 crore annual turnover mark in 2017-18.

Prataap Snacks saw a 30 per cent increase in retail current value sales in 2017, according to Euromonitor.

The company has successfully challenged leading manufacturers PepsiCo and Parle in potato chips and puffed snacks with a strong distribution network and competitive pricing strategies  say analysts tracking the sector.

It has 99 per cent of its products in the Rs 5-10 bracket and the newest offering, Yum Pie, a sweet snack, has also been launched at the same price point.

Indian consumers are also taking to local flavours more widely because they are now available in modern packaging via organised retail outlets.

Many say that the Indian consumer has not really changed the product he snacks on, but instead, the manner in which he consumes it.

The need of the hour was modern packaging for traditional nacks and that is what companies such as Prataap leveraged.

In the absence of packaged Indian savouries, consumers were going for multinational brands, says Harminder Sahni, retail expert and founder and managing director of consulting firm Wazir Advisors.

“There are a range of savouries that India has to offer at the local level. However, they were not available in a packaged and branded format in a hygienic environment. Local companies are doing this and offering Indian snacks at an affordable price,” he adds.

Given the wide range of savouries that the Indian palate is used to, the companies have a lot to play with.

Kumat says that Prataap Snacks’ diversified product portfolio, which includes extruded snacks, chips, namkeen and sweet snacks, is relatively less susceptible to shifts in consumer preferences, market trends and risks of operating in a particular product segment.

He says that the range of Yellow Diamond snacks has found favour with children, in particular the puff rings, retailed at Rs 5-25 are especially popular.

The company is one of the highest advertising spenders on kids’ channels.

Kumat and his team say that they are often at the stores, local markets and in other retail spaces to get a feel of what the consumer wants.

“Rather than conducting elaborate researches, we are in touch with the market which helps us in being nimble.

"We are not totally dependent on big and elaborate consumer research like the MNCs, because we believe it slows down product innovation. I make regular visits to markets get ideas and get those weighted through small researches if needed,” says Kumat.

According to a Nielsen study on consumer goods companies in India, one of the factors that helps a consumer goods company convert its pitch into a winning proposition is the ability to identify a consumer need and position the product as an effective solution.

Prataap Snacks and a host of other home grown packaged foods brands are doing that by identifying the right consumer emotion, tapping into it through branding, promotion and packaging design say experts.

Prataap has built a strong distribution network with more than 220 super stockists and over 3,500 distributors.

It is present in around 1.7 million outlets (according to Nielsen) and is now looking at other markets in South Asia.

“We intend to exploit macroeconomic factors and the trends in the snacks market, which are similar to those of the Indian snacks market, in these proposed new geographies,” says Kumat.

Photograph: Kind courtesy, Prataap Snacks.

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Samreen Ahmad
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