Fitness freak Virat Kohli’s recent gorging on a pack on chips for a TV ad drew everyone’s attention. It was an interesting pitch by Too Yumm! — the latest entrant in the baked savoury category from the house of RP-Sanjiv Goenka Group’s Guiltfree Industries.
Fitness freak Virat Kohli’s recent gorging on a pack on chips for a TV ad drew everyone’s attention. It was an interesting pitch by Too Yumm! — the latest entrant in the baked savoury category from the house of RP-Sanjiv Goenka Group’s Guiltfree Industries. While launching the product in 2017, the chairman of the group Sanjiv Goenka had mentioned that the company is committed to offering healthy snacking options without compromising on taste. The group has the ambition of making Too Yumm! a Rs 1 billion brand over the next four years.
This isn’t the first time an Indian company has put its muscle behind a healthier product. In the recent past, many FMCG players shifted focus towards launching baked (and thus, healthier) variants of snacks. Nestlé moved in on this early, with the launch of oats and atta variants for Maggi. In 2017, Rasna — known for its instant fruit-based concentrate — entered the baked (sweet) snack category with Rasna Vitos. Many players are treading the ‘baked’ path, because of growing health awareness among consumers coupled with driving aspirational levels of consumers to try newer, premium products.
As per Euromonitor International, the savoury snacks category — recording a 19% y-o-y value growth through 2013-18 — has been outperforming packaged foods in India. The packaged foods category registered a growth of 18% y-o-y through the same period. Within this category, through 2013-18, the health and wellness snacks category has been growing 17% y-o-y by value. Prashant Roy, senior research analyst at Euromonitor International, says, “The value growth rate is forecast to increase by 11.3% in 2018, touching Rs 2,800 crore by the end of 2018.”
Learning from past mistakes
In 2009, Parle Agro’s Hippo, positioned as a guilt-free baked wheat snack was a market failure despite having created enough buzz. Like Hippo, India witnessed a range of healthy snacks over the years such as Aliva, Musst Stix and Monaco Smartchips. However, these products with considerable health benefits failed to deliver and had to be scrapped. Experts opine that the market was very different during 2009-12 and consumers preferred taste over nutritional value.
Now consider how PepsiCo’s Lay’s baked potato chips, under their BFY (Better for You) products banner, was targeted at young women. “PepsiCo Foods is committed to delivering new taste experiences to our consumers,” the then marketing director Vidur Vyas had said in 2012. The product, which has not been heavily marketed, has managed to survive. Recently, the company also launched the multigrain variant of Kurkure. But what has prevented healthy savoury snacks from reaching their true potential? “Maybe players invested in setting up a factory but didn’t spend much on R&D and educating the TG,” says Pinakiranjan Mishra, partner and national leader, consumer products and retail, EY India.
“Consumers do try these products but they are not sticking to them as roasted and baked products don’t have the taste of traditional fried items. The fundamental mistake is to completely take out the oil from the process. This makes product very dry to eat and the results are clear,” says Vikas Hiran, CFO — Excelus Group (The Grannary) who highlights that there is a steady rise in demand for new categories like corn chips, quinoa chips, vegetable chips, makhana, etc.
Savouring the taste
A couple of years ago, according a Mintel survey, about 38% of consumers said that the most important factor for them to purchase a salty snack would be a new flavour. Mishra concurs adding that for people, taste comes before any other factor when it comes to food. Therefore, players in the food category need to be very careful about balancing both health and taste, and keep innovating. The India Baked Savoury Snacks Sales 2018 report by Absolute Report says that India plays an important role in the category for global brands. Here, top snack players include American Pop Corn, Calbee Foods, Conagra Foods, Kellogg, PepsiCo, etc. Having said that, domestic players like Prataap Snacks, Balaji, etc are increasing their distribution and penetration into rural India and have launched smaller packs at lower price points. These might not be ‘healthy’ but suit the Indian palate and pockets, thereby, giving major competition to conglomerates.
However, experts believe that any convenience product, built on quick snacking or quick hunger-satiating benefits, can never be healthy. Bang in the Middle’s CSO and managing partner Naresh Gupta says, “Do we believe that snacks like chips can be guilt-free? Globally, Pringles has built itself on the promise of ‘lesser calories’.” He goes on to say that a lot of advertising appeals are to be taken with a pinch of salt, and just because an ad claims health benefits, doesn’t mean it is true.