According to H K Press, Godrej Soaps president (consumer products division), the plan is in the initial listing stage and the company will draw up a blueprint of the institutions it plans to cater to. The company has already started catering to canteens and plans to take on other institutions like hotels in the near future.

``Even as the company would cover all consumer products like soaps and toiletries for promoting institutional sales, it may also develop new brands as and when desired,'' he said.

Among those well entrenched in the institutional sales business, Hindustan Lever Ltd (HLL) is a major player. To this effect, Godrej will have to compete with HLL to capture part of the institutional sales business.

Besides HLL, companies like Nestle India and Corn Products also excel in thebusiness of catering to institutional buyers in foods.

HLL markets its basket of products through Lever Food Service, a division set up in 1996. Lever Food Service is an over Rs 200 crore business for the multinational in India. The division, which was set up to provide focused customer service by introducing a single window supply, has expanded its base to all towns which have a population of 10 lakh and above.

As compared to this, the Godrej initiative is a start-up operation which has a long way to go in order to garner large volumes, say analysts.

Institutional sales is a low margin and high volume business. While one of the objectives of Lever Food Service was to introduce a concept of umbrella branding, it is not clear whether Godrej Soaps would adopt a similar technique to promote its brands. As against a diverse package marketed by Levers, which ranges from soaps to personal care products to food products, Godrej would specialise in soaps and toiletry products in which it has expertise.

Mostinstitutional sales businesses comprise a dedicated sales team, with salesmen assigned specific distribution tasks mainly to service institutions. The distribution network uses the carry and forward (C&F) agents.

In the metropolitan cities, most companies also commission agents who can service small loads. The institutional sales business of packaged and processed foods in India is estimated to be valued at over Rs 1,000 crore and is growing at a healthy pace of 40 per cent per annum, according to industry observers.