MARKETING SPECIAL...KELLOGG...Now Snap Crackle Pop with Pudina & Garam Masala

Now Snap Crackle Pop with Pudina & Garam Masala 

Kellogg retries localisation drive 14 years after its first attempt didn’t set the Ganges on fire

Cereal-maker Kellogg India is taking a second shot at localising its India portfolio, more than a decade after a launch of coconut and elaichi variants of its cornflakes had met with lukewarm response.
The maker of cornflakes, Chocos, Special K and Heart-to-Heart oats is rolling out variants like pudina, tomato and garam masala for its oats range to begin with; it is likely to follow the launch with localised variants of its other products as well, two officials with direct knowledge of the development said. “Kellogg is betting big on this launch… it wants to directly take on PepsiCo’s Quaker, which has begun selling oats in localised variants,” one of the officials said.
An email sent to Kellogg India’s spokeswoman last week elicited no response.
The Indian arm of the $13-billion world’s biggest cereal maker joins the growing number of multinationals being forced to localise and adapt to local tastes. India is the only country where Yum Restaurants’ owned KFC and Pizza Hut sell a ‘thali’ concept; McDonald’s aloo tikki burger remains the burger-and-fries chain’s largest selling product in India; and US sandwich chain Subway India sells hot subs -- in almost all other markets it sells its trademark product cold.
But not all localised products work. McDonald’s steamed veggie muffins, for instance, didn’t. And PepsiCo’s totally localised innovation – non-aerated nimbu pani Nimbooz – is not too visible on shop shelves, at least in the non-summer months.
About 14 years back, Kellogg had rolled out a breakfast cereal sub-brand called Kellogg Mazza in variants like elaichi, coconut and rose, but the product fizzled out; marketers say this was because of the lack of a marketing push.
A marketing consultant who did not want to be named attributes Kellogg’s lack of success with its early efforts at localisation with its inability to match the innovation in the category; the flavours chosen were hardly apt for the cereal category. “It was localisation for the sake of it,” says the consultant.
Adds Debashish Mukherjee, partner and vice-president at global consulting firm A.T. Kearney: “The breakfast cereal category works more for consumers with global palettes… so whether localised variants will be a growth driver for this category will depend on how consumption patterns evolve.” Since Kellogg’s first attempt at localisation, the convenience foods market has exploded. The breakfast segment alone is estimated at . 600 crore, growing at 18-20%, with Kellogg’s the leader with a roughly 55% share. Others angling for a slice of this segment include PepsiCo, Marico, Bagrrys, Dr Oetker, Britannia and McCain.
So whilst biscuit maker Britannia has launched porridge and poha under its brand Healthy Start, Canadian frozen foods maker McCain has frozen idlis. Oats, an emerging food category, has been riding on health benefits, which marketers like PepsiCo’s Quaker, Marico, Kellogg, GlaxoSmith-Kline and Bagrrys are cashing on. Oats by itself is a . 200-crore market, growing at a compounded average rate of 25% according to industry estimates.
Like for most global consumer goods companies facing weak sales in developed markets, for Kellogg Co, too, India and China figure amongst the top priority markets in which consumption of convenience foods is growing.
Kellogg’s India revenues are estimated at . 350-360 crore, despite the company operating in India for 18 years. “Kellogg is looking for a bigger share of the Indian breakfast market now… it is accelerating its pace of growth to leverage a market that’s gradually getting crowded,” one of the officials close to the localisation plan quoted earlier said.
“For most MNCs, localising is not very easy,” says Devendra Chawla, president of food and grocery chain Food Bazaar promoted by the Future Group. “Food is a culture and in India… changing food habits is as tough as changing culture and it can take a very long time,” he adds.
RATNA BHUSHAN NEW DELHI ET121019