LT Foods, owner of Daawat Basmati, to spend Rs 45 crore in operation and marketing

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Updated: Jan 29, 2020 7:01 PM

Daawat Basmati Rice’s parent company recently launched a new snack Kari Kari

LT Foods Ltd has rolled out the snack in a joint venture with Japanese rice crackers company Kameda Seika.LT Foods Ltd has rolled out the snack in a joint venture with Japanese rice crackers company Kameda Seika.

Daawat Basmati Rice’s parent company LT Foods which has entered into the premium healthy segment with the launch of rice-based snack Kari Kari plans to invest Rs 45 crore over the next few years to expand business besides marketing. “This year we will spend anywhere between Rs 3 crore – Rs 4 crore in marketing which will primarily be about creating better samples to catch consumer’s attention. The aim is to drive sampling of the product at retail stores, airlines, multiplexes, corporates, and colleges, among others,” Ritesh Arora, head- India, Far East and new business, LT Foods, said. Currently, the company claims to be using online including social media platforms in addition to e-commerce sites, to spread awareness of the brand.

LT Foods Ltd has rolled out the snack in a joint venture with Japanese rice crackers company Kameda Seika. Overall, the company plans to invest Rs 70 crore, in the JV and of this Rs 25 crore has been utilised for setting up manufacturing facilities in Sonipat, Haryana. “Based on changing consumer needs and preferences, and the increase in demand for healthy snacks, we ventured into the premium snacks category in India. Thanks to millennials’ need to try new products, this premium snacks category is recording a growth rate of 20%-25% per annum,” Vijay Kumar Arora, chairman and MD, LT Foods Ltd, said.

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According to Ritesh Arora, the company will use TV to advertise and create a buzz about the product at a later stage. Calling it the second phase of marketing he stated that the firm intends to invest Rs 15 – Rs 20 crore in TV advertising. “From the third year of operations, we plan to go on TV via ads because by then we would have established awareness and our marketing will be more about reach. As our target group (TG) is a health-conscious millennial who is receptive to new products, we will primarily release ads on English channels,” he noted.

As per industry estimates, the Indian snacks industry is valued at Rs 30,000 crores, of this premium and healthy snacks market is estimated to be worth at Rs 1,000 crore, growing at a rate of 22%-25% annually. The company aims to grab 3%-5% share of the premium healthy snack market in the next three years.

Daawat-Kameda India aims to clock revenue worth Rs 10 crore from the sale of Kari Kari snack by the end of FY21. The company is looking to generate revenue worth Rs 130 crore in five years, on the back of a profit margin of 35%. Moreover, Kari Kari snacks will be exported to the Middle East, Bangladesh, Nepal and Sri Lanka. These markets are expected to contribute 15% of the overall sales of the company. Available in four different flavours, Chilli Garlic, Wasabi, Salt and Pepper and Spice Mania, Kari Kari is priced at Rs 50 for 60 grams and Rs 99 for 135 grams pack. The company plans to have a presence at 20,000 retail outlets and 35,000 outlets by 2024.

As for the parent firm, LT Foods, it expects to clock Rs 4,100 crore in revenue by the end of FY20.

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