RP Sanjiv Goenka Group’s FMCG business hits the market with its first brand Too Yumm, whose two products-Foxnuts and Wheat Thins have been introduced on Monday. While the first launch happened in Kolkata, RP Sanjiv Goenka Group chairman, Sanjiv Goenka said there would be two more launches in Pune and Guragaon this month, with city wise expansion happening in 40 cities covering one lakh retail outlets over a period of 12 months.
He said the packaged food business has been introduced under Guiltfree Industries Ltd and the group has targeted $ 1 bilion from FMCG in five years. The company will gradually enter into other segments of FMCG but before entering into other segments it will cover the food portfolio comprising snacks and packaged foods.
While Goenka has launched two products initially, “the plan is to launch 10 products with 40-50 variants over the next 12 months, Goenka said adding the two products Foxnuts and Wheat Thins would be initially available at two price points — Rs 20 and Rs 30 a pack– but the company would gradually roll out snack packs at Rs 5 and also premium range snack products mainly made of organic food at a higher price point.
Goenka said FMCG business is capital light and the company plans to invest Rs10,000 crore over a period of one year, which would include takeovers, setting up factories, brand building, creation of distribution network, acquiring products, acquiring infrastructure and others. Although Goenka didn’t want to comment on the amount of money so far invested to launch its FMCG business, he said the current products were being outsourced from four facilities across Gujarat, Pune and Delhi.
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While FMCG business earns a gross average margin between 40% and 50%, the margins of Guiltfree Industries in the first year would depend on the acquisitions it makes over a period of year. “We are hungry for takeovers but we are not going to be foolish in our acquisition,” Goenka said.
He said the idea of entering the FMCG segment followed the McKenzie study which suggested the RP Sanjiv Goenka Group to enter into the segments of BPO and FMCG. Goenka made the first announcement of entering the FMCG segment during the Bengal Global Business Summit in January this year.