BY SIMRAN SABHERWAL
Canadian MNC McCain Foods is cashing in on the explosion in the frozen food segment in India over the last decade, thanks to disposable incomes and changing lifestyles. Gunjan Pandey, General Manager-Marketing, McCain Foods India, tells us why the humble potato – to be precise, French fries - has the company betting big on growth in India
McCain has been in India since the late nineties. What’s been your focus area - out-of-home or in-home consumption – and what has been the response so far?
McCain’s strategy has been to target both out-of-home and in-home consumers with products targeted to both segments. Frozen foods is a niche category for consumers in India and McCain has been aggressively working towards creating consumer awareness to grow the frozen food category in India across segments.
What is your media mix? How important is the digital platform for McCain?
We are using a gamut of media to create awareness - TV, Print, Radio and Digital. Each medium plays a different role to bring alive our brand objective. Digital is the new medium in our media mix and we will explore more of the digital medium in order to connect with today’s digitally savvy woman.
Small packs of McCain products are priced as low as Rs 35 for 200 gm. What is your pricing strategy? Are you planning to launch more products with an Indian twist and are there plans to bring in McCain’s extended global products, i.e., pizzas, desserts, frozen vegetables into India?
The company launched small trial packs to enable consumers to try out a variety of McCain products at affordable prices and we strive to present the best product experience to our consumers. There are many potato-based snacks of Indian and international taste in the pipeline. However, pizza, desserts or frozen vegetables are not in our upcoming product list.
You have signed Karisma Kapoor as your brand ambassador. How has this association helped McCain?
Our brand ambassador, Karisma Kapoor, embodies the contemporary women of today – balancing the pressures of work, children and home with grace. Karisma believes in the company’s brand theme of ‘Jhatse banao , kuch tasty khao’. Being a celebrity home-maker and mother of two kids, she not only manages a busy lifestyle but also whips up a variety of mouth-watering snacks in record time.
The common perception in India is that frozen food is for people who have no time to cook. It is perceived to be unhealthy, not as tasty as home-cooked food and not a replacement for it. What is your comment?
McCain is dedicated to creating good food and a better life for its consumers, customers, employees, and the communities it works in. McCain recognizes the importance of eating a well-balanced diet that meets the daily needs of calories and nutrients. That’s why we strive to provide a range of products that are 'better for you' and 'fun to eat'. McCain products are fresh as we use advanced IQF (Individual Quick Freezing) technology as the method of food preservation which helps to lock freshness and nutrition and increases the shelf life of perishable foods. McCain products are nutritious and we strive to use superior quality potatoes (high solid content, low on sugar and moisture) that are produced by making the use of best agronomy practices. McCain potato products are trans fat free as we use only 100% vegetable oils in our formulations.
What are the activities taken to connect with consumers?
McCain Foods India is undertaking a series of initiatives to tap the consumer market in India. The company is actively engaged in organizing large scale samplings and conducting customized contact programmes to reach out to home-makers beyond the point-of-sale. McCain is adopting a 360-degree integrated marketing approach to establish brand ‘McCain’ as the preferred brand in the frozen snack category. A McCain kiosk was launched in a Delhi mall as a pilot project with the objective to promote the product-tasting experience and motivating the consumer’s purchase decision at the retail end.
The frozen food sector has multiple players in India catering to various segments like frozen vegetables, non-vegetarian, ready-to-eat processed food. McCain products are mostly made out of the humble potato. How does McCain stand out and bring out its USP to consumers?
There is an emerging retail market for potato specialty in India. Potato is a staple in the diet of Indian families with a huge consumption of potato preparations for both snacks and meals. We believe that India represents a wide spectrum opportunity in terms of type of potato products, from fries to potato specialties, both international and ethnic. The relevance of McCain frozen foods is growing, with consumers appreciating the benefit of being able to create a freshly made hot snack, in a matter of minutes, from the freezer to the plate, in addition to the convenience of stocking them in the freezer for anytime use.
Infrastructure poses a big hurdle in India for a company like McCain wherein cold storage/electricity is mandatory both during distribution and end point retail. Does this constraint hinder growth and access to small time retailers and also to Tier II and Tier III towns?
When we entered India in 1998, the only frozen foods were frozen peas, vegetables, non-vegetarian products and ice-cream. The concept of using pre-prepared frozen snacks was virtually unknown in the Indian market at that time. Our consumer research brought to the surface the need to educate customers and consumers about the benefits that freezing as a method of preservation offers. The fact that freezing is a natural method of food preservation without the use of any preservatives was not known. With time and effort towards generating trial and experience of frozen foods, this category has considerably improved over the years.
The frozen foods penetration is fully dependent on the infrastructure and cold supply chain facilities. An efficient cold chain is required to transport frozen products in the stipulated time-frame while maintaining the required temperature. The cold chain segment in India is largely dominated by fly-by-night suppliers and small businesses with poor networks. As the services are not integrated, it leads to wastage and damage to food due to frequent handling and transfer. Restricted freezer space further aggravates the challenge. Freezers require a fair amount of monetary investment; thus lack of sufficient freezer space at the retail end is also presenting a considerable challenge to frozen food companies and it is a complex market scenario to operate in, considering that each outlet must have a freezer and 24 hours supply of electricity. And most kirana stores don’t have such facilities.
At McCain, we take a lot of care in placing our products in outlets where we know that the freezing capabilities are reliable. We do regular market visits and surprise checks. If we find that the storage capabilities are not up to the mark, we take back our products. As we operate in the frozen snacks space, we have worked closely with third party cold chain operators to implement the latest technology in infrastructure and cold chain refrigerated transport.
How do you estimate the size of the frozen food industry in India and what is your market-share? Looking ahead, how do you see both the industry and McCain growing?
The organized frozen food market in India is estimated at over Rs 1,000 crore and consists of non-vegetarian and vegetarian frozen foods. The company has seen a very good growth in the frozen food market. Today, McCain Foods is leading in the vegetarian frozen food segment in India. Currently, McCain products are available in around 10,000 outlets across 60 Tier I and Tier II cities. The company is now targeting to expand its retail network to about 50,000 outlets in the next five years. Anticipating a growth in demand for frozen potato snacks in India, the company has recently announced capacity expansion at its potato processing plant in Mehsana. With changing consumer lifestyles in India, the home consumption of frozen food is growing and McCain sees scope for significant growth. The frozen food market is growing with a double digit CAGR for the period of 2013 to 2017. The retail segment offers a major opportunity due to growing demand from Indian consumers.
What are the challenges faced in the market with competition so strong?
The market for frozen foods is increasing in India and as a result more companies are entering the market. We believe that the entry of new players will only develop and grow the market further, which will eventually benefit the industry and the consumers.
