BUSINESS
Marico expanded its breakfast menu last month with the launch of Saffola Muesli in three new flavours — Kesar Crunch, Berry Crunch and Choco Crunch. During the launch, Vaibhav Bhanchawat, chief operating officer, India & Foods Business, Marico, said, “Our foray into the muesli category is in line with our brand proposition of offering consumers ‘better for you’ products with a ‘taste first’ approach.” Muesli is the youngest cereal sub-category in India , but makes up a third of the overall breakfast cereal category already and is growing in double digits year on year. Market leader Kellogg enjoys more than 70% share of muesli in value terms.Experts say though it is growing at a steady clip, the breakfast cereal market is not the easiest to crack. The category posted a positive compound annual growth rate (CAGR) of 18.18% during the 2018 to 2023 period with a sales value of `5,962 crore in 2023, an increase of 12.99% over 2022. The market posted its strongest performance in 2019, when it grew by about 24% over the previous year and its weakest performance in 2023, when it increased by 13% over 2022. While market growth has faltered a bit, global majors Kellogg’s and PepsiCo have raised their stakes in the Indian market over the years. At the same time, home-grown brands like Baggry’s have leveraged their understanding of the local palate to offer affordable alternatives. New entrants like Tata Consumer Products (Tata Soulfull), have helped increase category penetration, though it is still a low 15%. These are competitors with long experience and deep pockets and are not expected to give Saffola muesli a walkover. Competition apart, Marico will have to keep pace with changing consumption trends — but that might be a blessing in disguise. As consumers are becoming more health conscious, they are ditching the classic sugary cereals in favour of healthier alternatives, say experts. That has given categories like oats and muesli a leg up. They are touted as superfoods by nutritionists and fitness freaks and have swamped supermarket breakfast aisles. So what is Saffola’s big plan? Can it replicate its success in oats in the muesli market? One step at a time Quoting Kantar Household Panel Data, Marico said last October that Saffola Oats had come to own an impressive 43% share of the market in value terms, surpassing all competitors. The data underscored that 1 out of every 11 households in the country actively includes oats into their daily consumption.But the oats story is different. According to market estimates, oats as a category has seen close to 25% growth in the past few years, outstripping the entire cereal category. Marico is confident it can do another Saffola Masala Oats with the muesli foray because it has done its homework right. The development of the “pops” format was prompted by significant consumer insights. Its studies showed that urban Indians were aware of the health benefits of muesli but hesitated to buy due to their unfamiliar taste. That presented an opportunity — to bridge the gap with well-loved flavours like kesar and chocolate. Its product is packed with nutritional benefits too. They feature a blend of multigrain and millet along with ingredients such as fruits, nuts and seeds. “The product adheres to Marico’s formula of ‘no added maida’, ‘no palm oil’, ‘no artificial colours or flavours’,” says the firm.Is all that enough to make the cut? Saffola might need to come up with local flavour options, say experts. “India has a large number of local cuisines. Flavours are an important lever to adapt to regional preferences,” says Anand Ramanathan, partner and consumer products & retail leader, Deloitte India. Marico needs to also watch out for local snack food brands for on the other side of the domestic breakfast table are Indian food companies such as MTR (owned by Norwegian major Orkla) and iD Foods that offer a range of ready-to-cook traditional options. Ultimately, the product will be the king — if it’s convenient, affordable and satisfies the palate it can only get bigger. Follow us on Twitter , Instagram , LinkedIn, Facebook None
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