Functionalizing Food in India

In recent times, health, diet & lifestyle have become significantly important for Indian customers. Consequentially, there is a rush amongst companies to prove that their product scores high on the health benefit plank. While Parle leaps in the health-snack category with the 'You will need it' campaign for Monaco smart chips, GSK Consumer Care extends its Holicks brand into healthy noodles called 'Foodles' & underscores that RTE(ready-to-eat)segment needs an overhaul when it comes to health benefits(however, this one can be a major branding goofup--Horlicks as a brand is synonymous to health, while 'healthy noodles' still remain an oxymoron to the Indian populace). Also in the current scenario the concept of 'Fortified Foods' & 'Enriched Foods' is picking up in a big way. So while Maggi touts its iron & calcium content, Aliva relies on its 'multi-grain' features for brand building. Companies like HUL are taking ardent measures to completely remove trans-fat from all their products & TATA has followed the suit by launching a revolutionary product in the form of 'TATA SALT Lite which contains 15% less sodium than ordinary salt.

According to a recent report by Nielsen company,59% Indians actually took the nutrition labeling into consideration before buying the final product. Nutritional information on 'Fats' was given maximum importance followed by 'Calories' & 'Preservatives’. This craze about healthy living is seconded by the rapid growth of ‘health & wellness’ industry in the country & the evolution of FMHG(fast moving health goods)as a dominant category in the market. The underlying factors for this rapid growth of FMHG can be:
1) Increased consumer awareness—People wish to compensate for their sedentary lifestyles by eating healthy. Also,owing to the escalating cost of medical treatment, people are resorting to ‘Prevention’ than ‘Cure’.
2) Organized Pharmaceutical Retail—With extensive CRM (customer relationship management) measures, organized pharmaceutical retail has made the concept of FMHG quite popular in the country. Retail stores like Guardian have even introduced various private label products to practice ‘bottom of pyramid’ marketing techniques & expand the FMHG market by lowering prices.
3) Changing Regulatory Framework: The plan of Drug Controller of India to sell schedule K drugs at grocery stores will augment the popularity of health- products besides of course expanding the target audience for the segment.

The definite challenge in such a market would be to differentiate the product from the clutter. In a market which is currently riding on generic health claims (health claims based on well-established, generally accepted knowledge from evidence in the scientific literature and/or to recommendations from national or international health bodies), the success of any company will depend on how well it is able to promulgate innovative health claims (health claim other than a generic health claim based on scientific evidence applied to existing or new foods. These claims must be substantiated according to a process set out in the Joint Health Claims Initiative Code) for its products. The limiting factors in this case being excessive R&D expenditure & dissimilar national health policy of countries. Also, in recent times there has been strict monitoring of health & nutritional claims made by companies. Besides, there has to be suitable spending on educating customers about reverence of nutritional benefits. A SEC B housewife would not bother to buy 'Sofit'-The Soya Milk unless she knows the precise post-menopausal benefits of Soya isoflavones. Similarly health foods will find few takers in ordinary retail stores until adequate POP incentives are propounded followed by suitable customer education.

ALIVA--Expanding The Market

Frito-Lay India,the food division of Pepsico India, is making buzz in the market by its latest offering Aliva -Chatpate Crackers.Aliva 'per se' is quite an interesting product & has adopted quite a few innovative strategies to cater to customers & establishing itself in the very competitive Rs 4000 crore Indian Biscuit Market,viz:

1)Aliva combines the features of biscuit & Namkeen,therefore customers who wanted a healthier substitute to Potato chips would switch to Aliva as it offers health benefits of Wheat & Daal and comes in tasty flavors.

2)Aliva mainly targets the metropolitan SEC A & B population & therefore has acquired huge shelf presence in the organized retail outlets(The recent ad campaign featuring Chitrangada Singh potrays a chic modish couple with trendy lifestyle designed to appeal to its target population-the ad however does not break the clutter & even the tagline 'Thodi Shararat,Thodi Sharafat' is quite ambiguous).

3)It is especially designed for the Indian population-Currently almost 50% of the offerings by Fritolay in the Indian market including Kurkure,Lays & Cheetos are customized for local acceptance.(Out of the current offerings by FritoLay, Kurkure & Aliva are designed only for Indian market while few of the flavors in Lays are customized to suit the Indian taste).

4)The product will utilize the same distribution channel as Lays & Kurkure-this will create synergy in the products & will lead to an increased bottom-line for Fritolay.

Aliva plans to create a new category of 'Crackers' in the Indian snack market & thus differentiates itself from competition & also justifies a higher price of Rs 12/pack(introductory price).

The product is developed on the underlying assumption that most people consume snacks for its taste & not just health benefits-therefore while the market already had quite a few sweet biscuits positioned on the health platform,Aliva is the first kid on the block positioned as a 'Chatpata' healthy cracker.

The main challenge for Aliva would be to find acceptance as a mainstream product.There would also be some cannibalisation for Kurkure as both the products are customised & targetted towards Indian populace.The brand however has a huge support base from FritoLay & it will be interesting to see how Aliva carves its way in the market.

Mera Wala WHITE -Fairness Products in India

Skin lightening or fairness cream is the most dominant category in the Indian Skin Care Market & has become the only cometic product to enter the Indian household customer basket.India is the largest market for fairness products in the world followed by other Asian countries.The connotation of fairness for Indians is associated with British rule.Through the ages Indians have developed a conditioned mindset where fairness is equated with power & superiority.This is the reason that almost all the FMCG & Cosmetic companies in the country have fairness cream in their product portfolio.

The current size of the market is estimated to be around Rs 15,000 crore with players like HUL having 76% of the market share with their power brand Fair & Lovely followed by other players like Godrej's Fair & Glow,Elder's Fair One,Emami's Fair & Handsome,Nivea,Garnier etc.Also players like Dabur & Himalaya have forayed this category.The target audience for the firms is the age bracket 18-30 years;however the age bracket of users has become as low as 12-15 years which constitute almost 13% of the entire segment.Anothar interesting feature of this category is lack of upscale from single-brand usage to multi-brand usage.Therefore inspite of constant education by firms regarding difference in male & female fairness creams,most men continue to use female fairness creams.In TamilNadu Men contribute almost 60% to the sale of female fairness creams.This can also be due to the fact that in most households women is the prime decision making unit & multi-brand fairness cream usage is considered profligacy by them.

There is a constant debate over the efficiency of fairness creams.Typically fairness creams show their action by lowering the melanin content in the skin.However,any extrinsic agent that interferes with normal melanin synthesis(melanogenesis)can be harmful for efficient dermal system functioning.Therefore a good product should only restore correct melanin synthesis & not make it less or more.Ingredients like Hydroquinone & Mercury used in fairness creams are banned by FDA.The prolonged usage of these ingredients lead to a condition called 'Ochnorosis' where there is a permanent darkening of the skin.Ingredients like Kojic Acid which are effective in reducing melanogenesis in the skin are widely used in many fairness creams;however in order to be effective their concentration should be high(>2%).This concentration is hardly found in any skin lightening products available in the market.

Fairness creams as a segment is definitely going to grow in the future.These products have a Pan Indian presence with maximum penetration in Andhra Pradesh & least in Gujarat.Products like Fair & Lovely have also undergone huge product innovation to cater to customers across various SECs.For instance inorder to cater to SEC C & D F&L introduced 9gm sachet to make the product economical.

However,one of the biggest threats for this category can be the wide accpetance of dusky women in Indian Film Industry.Also movies like Dhoom-2 popularized the 'tan look'.Therefore in the future the need of the customer is going to change from 'Fair skin' to 'Healthy skin'.However that future is yet too far & fairness products are here to stay.Afterall for Indians beauty is still skin deep.

Transition from Prescription to OTC

In the recent past quite a few brands have created buzz by transiting from prescription to OTC(over-the-counter)segment.Typically a prescription drug becomes OTC when the drug is used for treating a non-chronic illness which is easy to self-diagnose & will not lead to abuse due to its widespread presence.Also the safety profiling of the drug is of prime importance for granting OTC status.Besides it is believed that popularity of the drug should be extremely high so that it could sell without Doctor's endorsement.

Brands like Revital,Calcium Sandoz,I-Pill,Strepsils etc have adopted an extensive rebranding program inorder to establish themselves in the OTC market.Quite a few brands have completely modified their 4Ps and given themselves a holistic overhaul.For instance,Calcium Sandoz Woman was called Sandocal Chew which was indicated for osteporosis in woman.When Novartis decided to foray this product into the OTC market it decided to launch it as an all together new brand .

Also I-Pill (which is a 'morning after pill' used for emergency contraception(EC)) launched by Cipla had to undergo suitable restructuring before launching in the OTC segment Viz:there were suitable changes made in the dosage of the drug.Typically most of the ECs selling through prescription route have 'twice a day' dosage;however I-Pill is a single dosage drug & thus has a greater compliance-definite prerequisite for OTC drugs.

One of the biggest challenges in selling drugs through the OTC route is the acceptability of the product by the customer.When a drug is prescribed by the doctor the patient has a compulsion to buy it but incase of OTC drug the 'compulsion' changes to 'choice' & customers' personal preferences like taste,color,price,packaging etc come into being.Thus the company has to switch from BTL advertising & make the product popular through ATL advertising techniques.In this case the biggest threat is the FMCG category as several OTC brands which have small advertising budget face head-on competition with FMCG behemoths which have huge advertising budgets & also wide shelf presence.Example Protinex versus Boost.Also,the key DMU(Decision Making Unit)incase of OTC drugs is the chemist unlike prescription drugs.Thus firms have to target chemists to improve point of purchase sale for the product.

Overall OTC is a challenging segment & while there are definite advantages there are various challenges too; inorder to fare firms have to analyze their muscle power before testing the market.

MOOV--Brand Analysis

Moov was launched by the Ahmedabad based Paras Pharmaceuticals Ltd.(PPL) in 1986 to establish a national presence for the company.PPL is renowned for launching innovative products & establishing power brands.It is currently the third largest Indian FMCG company in the country after Nirma & Dabur.Paras is renowned for making a killing in the OTC segment & believes in making it big where there is a strong number 1 but no number 2.In 1984 PPL had launched the moderately successful Stopache,thus Moov turned out to be the first successful venture for the company.

In 1986,the time when Moov was launched,the market was dominated by rubs & balms like Iodex,Amrutanjan,Zandu & Relaxyl.These brands were positioned as Multipurpose pain relievers & thus did not have any definite target audience.PPL was quick to realize the hole in the market.It was estimated that 50-80% of the world's total population suffers from backache.Also,women were found to be most vulnerable to backache.Thus PPL decided to target women in the SEC B & C segment specifically for lower back pain through Moov.Enough brand awareness was created to make people understand that backache could become chronic if left untreated.Thus Moov became the 'backache specialist'.

Two years after its launch Moov could command only 0.3% of the market share.This was partcularly because of the niche positioning of the product.However,in 2004 Moov was able to command 13% of the Rs 4700 million Indian rubifacient market.Almost all the 4Ps of marketing viz:Product,Price,Place,Promotion played a pivotal role in bringing about this turnaround.

Product:PPL introduced numerous innovative product attributes for Moov.The product was sold as a stain-free ointment quite contray to the black gooey apperance of Iodex.Also,the product was sold in the contemporary pack--tube with carton--which made it easy to use.In 2002 Moov Spray was launched which targetted Men & had a catchy tagline 'Jab koi Na ho Saath' which exploited the occasion-based usage positioning for the product.Recently,Moov underwent line extension & launched Moov Neck & Shoulder which targets the Younger Working Class.

Price:Moov initially targetted the middle-income housewives & thus was a mass-market product.However,in 2000 Moov was launched in 5gm economy tube to make the product more affordable.Also,it increased the household penetration of the product significantly.

Place:Moov has excellent Market Penetration & is avaliable in the remotest of places.It touted a chemists presence of around 95%.Later the channels were expanded to include the grocery shops & Malls.Separate salesmen were recruited to take orders from grocery stores.

Promotion:Moov is widely recognized for its excellent communication strategy.The messages are very crisp & clear with definite impact on the target audience.Also,it communicated its USPs through separate ads---non-staining attribute of Moov was communicated though separate TVCs.

Future sucess of the brand depends upon how well the brand is able to transit its stance from Relief to Prevention.Thus the usage should be more on the preventive platform than on the curative platform.Also,suitable product innovation should be done to give the required spur so that the product is able to ride on the maturity phase of the product life cycle for long.

CHEWING GUM-Product Evolution

Chewing gum is one of the most popular traditional confection item which has endured the test of time through suitable product evolution & innovation.Typically,chewing gum is made of Chickle,a natural latex product(that is why the brand name-Chicklets).If we look at the per-capita consumption of chewing gum in India it is only 8 per year as compared to 2000 per year in U.S.A & 1000 in Russia.The current size of the Indian chewing gum market is estimated to be about 1000 Crores(INR)thus it offers huge opportunity to companies like Perfetti & Wrigley in terms of market & new product development.

Through the ages,it is believed that chewing gum helps in increasing concentration & losing calories-thus seconding Wrigley's tagline 'Gum is Good'.However,in the current scenario it is contended that gums can be one of the most effective vehicle for drug administration.On an average,it is found that a person chews gum for about 20 minutes.Thus,the average 'inside-the-mouth' time for chewing gum remains very high as compared to lozenges or chewable tablets/candies.Therefore,drugs required for local or direct action in the respiratory tract can be very well administered through chewing gums.Also,it is contended that the cheek walls are very well perfused & can therefore bring about excellent & quick absorption of drugs.Besides,drugs administered through chewing gum also do not undergo hepatic first pass effect-thus increasing the bioavailability of drug.

Currently,not many chewing gum brands in India are positioned on the health plank.However,the recent years saw the launch of products like Protex Happydent which is claimed to prevent tooth decay due to the presence of a special ingredient called 'Xylitol'.Also,Happydent White which contains sodium bi-carbonate helps to keep teeth clean & white.Other brands like Orbit also offer similar benefits & assist in maintaining oral hygiene.Though currently most of the brands are concentrating only on oral hygiene,there are also numerous opportunities in developing chewing gums with sustained release formulations,anti-tussives etc.

GARNIER MEN--Brand Analysis

Garnier Men-Powerlight is the range of skincare products launched by Garnier to exclusively cater to Indian Men & their increased grooming needs. India is pioneering the launch of this brand worldwide.

The Powerlight range currently comprises of Fairness Face Wash, Fairness Moisturizer SPF 15 & 6 hr Oil Control fairness Moisturiser.All these products are completely natural & have Lemon Extract as a common ingredient in them.

The Fairness Moisturizer contains SPF15 agent. SPF stands for Sun Protection Factor & is defined as the time taken before Sunburn occurs when the skin is exposed to Sunlight. Typically sunlight comprises of both UVA & UVB rays.However, SPF only measures the protection against UVB & not UVA.There are other methods like Persistent Pigment Darkening (PPD) to measure protection against UVA.SPF has different ratings depending on the level of protection being offered by the Sun Screen. For Instance SPF 15 offers a protection of about 91% while SPF 30 offers a protection of 97%. Owing to consumer confusion over the real degree and duration of protection offered by SPF, labeling restrictions are in force in several countries. In 2007, FDA proposed to institute the labeling of SPF 50+ for sunscreens offering more protection. This and other measures were proposed to limit unrealistic claims about the level of protection offered.

Today, men of all ages are taking a keener interest in their appearance – a Gillette India study indicates that Indian men now spend an average of 20 minutes in the mirror each morning, higher than the 18-minute average for Indian women. If we look at the Men’s grooming sector in India, quite a few FMCG giants have already forayed the category. Recently Elder Pharma announced its plans to launch multitude men grooming products under the ‘FUEL’ umbrella brand which was kick started by the launch of the deodorant. Also, companies like Emami, HUL, Nivea etc have already entered the Men’s grooming category & robed in popular faces to endorse their brands.

Thus, Garnier Men shall undoubtedly face competition from within the industry.However; the success of the brand depends upon the manner in which it tackles competition from other sectors where males spend their discretionary money. According to a report, more than half of the men surveyed said they would rather spend their excess cash on eating out or recreation, trendy clothes and new accessories, ahead of personal grooming activities and related products. Thus the actual challenge for Garnier would be to increase the per-capita spending by men on grooming & to make the product necessary to its target audience.

Horlicks Nutribar--Brand Analysis

GlaxoSmithKline Consumer Healthcare(GSKCH) has launched Horlicks Nutribar to foray into the Healthy Snack category which has garnered the interest of many food & beverage companies in India.The product is especially designed for Indian markets & is positioned as a healthy between-the-meal snack which can be consumed by people living very active lifestyles.

The concept of Nutritional bars is picking up in India.Once used as an energy bar for dietary supplements for athletes, it is now an alternative nourishment for everyone.The positioning for most nutritional bars is 'Quick & healthy substitute to regular meals'.However,Horlicks Nutritional bar is positioned as 'between-the-meals respite for hunger pangs'.Thus,they are substituting biscuits,confectionary & other junk food items consumed by people in the 'unconscious mode'.

GSKCH has already line extended its Horlicks brand into biscuits & now into Nutritional bars, thus underscoring the tremendous brand equity that Horlicks has collected all these years.The Nutribar is currently avalable in 3 different variants & is priced between Rs 15-Rs 18.The multi cereal snack bar contains 11 vital nutrients, is rich in iron and has only 114 calories.Also,quite unlike other Nutritional bars which contain Sugar or Jaggery as sweetening agents,Horlicks Nutribar contains Honey.Thus,making it a complete health food.

Nutribar might have to face some competition from Britannia's Nutichoice 5 grain biscuit,which is also positioned as 'hunger buster for in-between meals time hunger' & is composed of 5 different grains along with Natural honey.However,one main problem associated with this biscuit is its size.Since,the size of the biscuit is quite large, it easily breaks even before opening the packet.Inspite of the fact that it is economically priced(a pack of 4 biscuits atRs 18) it faces several bottlenecks in terms of its packaging & consumption.Thus,Britannia would have to introduce mini-packs & better packaging for Nutichoice 5 grain inorder to help it take off.

Horlicks Nutribar is a pioneer in the almost non-existent nutrional bar market in India(which is only a 10 crore market currently) & thus has a long way to go.However,it can also face some competition from conventional food items like the ubiquitous 'Chikki'(the traditional Energy bar) which is a popular & economical item consumed all over India.

Sofit-The Soya Milk

Godrej Hershey’s, the food & beverage company of Godrej Industries Ltd (GIL), marked its entry into the Health Food segment with the launch of Sofit in 2004.Sofit is the first branded Soya Milk available in the market & therefore GIL enjoys first mover advantage in this category. As per the current trend, most of the FMCG firms are positioning brands on the health plank in order to propel growth.Sofit is also built on a similar curative platform & is meant to be a healthy substitute to milk.

Soya Milk (the prime ingredient of Sofit) is made from Soybeans which is one of the richest sources of protein.Also; it contains far less saturated fats as compared to Cow's Milk. One glass of Soya Milk is almost as nutritious as one glass of Cow's Milk plus the added benefits of Vitamin E, Lecithin, isoflavones etc. which are also found in Soya Milk. Thus the target audience for Sofit would typically be Health conscious individuals, Lactose-intolerant individuals(as Soya Milk does not contain Casein) & Vegans(people who do not use or consume animal products of any kind).Using soybeans to make milk instead of raising cows is economically advantageous too as it takes far less resources to cultivate soybeans than to raise animals.

Sofit is positioned by GIL as a premium product & is priced at Rs. 75(1 liter).Since,Sofit has a niche target audience, it is primarily promoted through BTL advertising channels which goes through doctors, hospitals, nutritionists, health clubs & gyms.Currently,it is available in seven different variants. Apart from Soya Milk, it also contains fruit juices which are a rich source of vitamins.

Sofit can be advantageous for Godrej in launching other health food brands as it can capitalize on the existing advertising & distribution channels.However,it cannot be used as an umbrella brand due to its niche-market positioning.Also,the brand can face stiff competition from conventional dairy products like Skimmed Milk, Fortified Milk etc.Thus,it would be better not to position Sofit as an analogue food but a naturally occurring vegetarian milk.

Functional Food & Marico

'Functional Food' is the next big thing in the Indian FMCG Market.Quite a few Indian Companies have already launched products to cater to this emerging segment.

Technically speaking,Functional food is any fresh or processed food claimed to have health-promoting or disease-preventing property beyond the basic function of supplying nutrients.Thus,the purview of functional food lies somewhere between what we call as 'Daily bread'(food eaten by an individual in the normal course of a day) & Drug(Xenobiotic providing therapeutic benefits).

There are a bunch of companies which have already launched products to cater to this segment(which currently confines to SEC A1 & A2).There are companies like Yakult-Danone & Nestle which have launched probiotic products.Also,we have companies like Avesta Good Earth & Marico which are buiding brands on a curative platform.

Marico has done an interesting exercise with their functional food(FD) range.Their range of FD is launched under the Umbrella brand 'Saffola' which is distinctively positioned as a Health & lifestyle product.The brand equity garnered by Saffola over years is used as a leverage to launch other line extension products.Today Saffola comprises of unique set of products like Oil,Salt,Rice,Snacks & ofcourse functional food.Marico has also been very judicious in their choice of target segment which mostly comprises of Housewives in the age group of 25-35 SEC B1 onwards.Across all these years, Marico has not fiddled with its target segment which has remained fairly constant.The thriving factor for Saffola is its credo of promoting Healthy lifestyle by protecting the 'heart'.

If we look at their functional food range,it is currently offered in two variants: Cholestrol Management & Diabetes Management.While the Diabetes Management Atta Premix is priced higher than Cholestrol Management Atta Premix,both the products are premium products & mainly targets people with sedentary lifestyles or with a genetic predispostion for Diabetes.Both the products are vegetarian & can be consumed by the entire family.However,the high price will restrict the usage of the product to risk-prone individuals in the family.Anothar Disadvantage for the product would be its ingredients which are fairly common.For instance,Methi which is the prime ingredient for Diabetes Management Atta Premix is a common vegetable eaten all over the country.Thus,the product can be easily supplanted by natural substitutes.The onus therefore rests on Marico to make the consumers believe in the product & its unique benefits.

Nutralite-Brand Analysis

Nutralite Bread Spread was launched by Carnation Analogue-Foods Ltd in 1996.Later in 2006,Zydus Cadila acquired a majority stake in Carnation Analogue-Foods Ltd & decided to relaunch Nutralite.Today the brand commands more than 60% market share in the Margarine category which is currently a 60-crore market in India.

Nutralite,intrinsically,is a very interesting brand. It positions itself as 'Better than Butter'(old) or 'Healthier than Butter'(new).Thus underscoring the point that it is not butter but a healthier substitute to butter & creating a point of difference(pod) for itself.At the very same time it is sold in the market as 'Nutralite Butter' thus highlighting its point of parity(pop) to butter.Inspite of the fact that its pop & pod are quite antithetical to each other,the brand is doing well.This can be primarily due to the following reasons:

• Consumer submits to the information asymmetry created by the brand & believes that the 'healthier than butter' aspect is created by the addition of some extraneous ingredients having health benefits.Thus the product is able to capitalize on its 'butter-like' attributes without educating the customers about an entirely new product category of Margarines.
• Nutralite as a product offering is catering to the needs of a particular customer segment i.e. people who are prone to cardio vascular diseases primarily in the urban middle class.Thus its 'zero cholestrol' feature is quite appealing to people aged above 40.Though Nutralite is also creating buzz amongst the diet-conscious youth who use Nutralite for cooking purpose(as a substitute to oil).
  
• Nutralite also scores on the price front.It is priced slightly below Amul Butter & thus is economical too.

If Margarine is studied as a separate category in India, it is currently dominated by Nutralite with competition from other brands like Amul Lite & Marie Gold.Margarine is a healthy substitute to butter.Butter which is derived from fats of animal origin contains high amount of cholestrol & saturated fatty acids and low amount of unsaturated fatty acid.In contrast to this,Margarine is derived from fats of vegetable origin & contains more unsaturated fatty acids(which are good for health)& almost no cholestrol.This makes Margarine a definite product for people prone to heart diseases & other lifestyle disorders.

Nutralite as a brand shares a lot of synergy with its holding company Zydus Cadila which has differentiated itself by offering unique health & analogue products.Its other important brands include Sugar free & D'lite.
Health products' market in India is bound to grow at a tremendous pace in the future owing to the steady increase in the sedentary lifestyle of Indian populace.Thus making it imperative for people to resort to healthier substitutes of conventional foods.However,the paradox lies in the fact that people still take Analogue foods as Artificial food & prefer the conventional products.The onus therefore rests upon companies to create awareness about the category to help it take-off.