Case Based Analysis on Dal Industry

1. Jawar’s Dal Dilemma
Team Chanakyas
Naga Prabhu N
Sathya G
NITIE, Mumbai
Email:
nagaprabhu.n@gmail.com
sathyaguru88@gmail.com
Ph: 8108345199, 9594530636

2. UDAAN 2012 ASMANJAS
Indian Retail Market
Indian retail industryis expected to touch Rs 65,000 crore (1) in the year 2011-12. The Indian retail
sector is estimated at around Rs 9,00,000 crore, of which the organized sector accounts for a mere 2 %
indicating a huge potential market opportunity that is lying in the waiting for the consumer-savvy organized
retailer.
Purchasing powers of Indian urban consumer is growing and branded merchandise in categories like
apparels, cosmetics, shoes, watches, beverages, food & even jewellery, are slowly becoming lifestyle
products that are widely accepted by the urban Indian consumer. Indian retailers need to take advantage of
this growth and aimto grow, diversify and introduce new formats, to pay more attention to the brand
building process. There is no doubt that the Indian retail scene is booming.
The Indian retail scene has witnessed too many players in too short a time, crowding several
categories. The growth rate of super market sales has been significant in recent years because greater
numbers of higher income Indians prefer to shop at super markets due to higher standards of hygiene and
attractive ambience. Here also small, single-outlet retailers dominate the market. Although these retail
chains account for only a small share of the total market, their business is expected to grow significantly in
the future due to the growing quality consciousness of buyers for these products .
Estimated to be US$ 200 billion, of which organized retailing (i.e. modern trade) makes up 3% or
US$ 6.4 billion.
India is rated the fifth most attractive emerging retail market: a potential goldmine
Ranked second in a Global Retail Development Index of 30 developing countries drawn up by
Kearney.
India is rated the fifth most attractive emerging retail market: a potential goldmine. Food and apparel
retailing key drivers of growth.
Organized retailing in India has been largely an urban phenomenon with affluent classes and
growing number of double-income households.
Organized Retailing of Pulses - Current Scenario
India has a large vegetarian population, which is largely dependent upon pulses, wheat and milk as
its major source of protein. The size of consumption of pulses in India is around 17.5(2)million MT. In order
to meet such demand, India is dependent upon import of pulses to the extent of 2-3 million MT. India
imports its requirements from various countries, such as Myanmar (Urad & Tur), Canada ,Australia and
various other countries. Organized retailing of pulses is still in its infancy in India. The unorganized retailing
has dominated the Indian landscape so far and small quantity is sold by Kirana stores and modern trade as
their in-store brands.
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3. UDAAN 2012 ASMANJAS
Global Pulses Production in Retail Sales of Pulses in Indian Retail
MT (2010-11) Market
25000
Total : 61.3 million MT
20000
15000
10000
5000
0
2006 2007 2008 2009 2010
Retail Sales in'000 tonnes
Major Players – Region-wise:
Evaluation of Strategies of Bhakti Dals
Branding Strategy:
Branding is very important in the current retailing formats. The dals are
launched in an attractive 'Farm Story' pack, with a free recipe booklet which helps
in increased brand visibility and brand recall. Label gives satisfaction to consumers,
while farmers are not able to deliver quality products that can create trust.
Targeting Strategy:
The pulses range has been reasonably priced between MRP
Rs85 to Rs100 for a one-kg pack. The smaller SKUs of 500g and
250g help in promoting the product for the first time users. Also it
makes the purchase convenient for frequent buyers and nuclear
families.
Distribution Network Strategy:
MKS rural retail outlets and its existing salt distribution network helps to penetrate further in the
Indian market in a fast pace. It gives them cost advantage as well as the distribution advantage. The
company markets the product in Tier I and Tier II cities through food malls and large retail chains.
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4. UDAAN 2012 ASMANJAS
Sailing on Customer Confidence:
Bhakti Dals are all-natural, farm-fresh produce which are sourced from reputed, MKS-supported
Indian farms, unlike most packaged dals available in retail outlets, which are imported. Hence they offer
better / reliable quality, hygienic pulses to Indian household winning customers‟ trust.
Quality standards:
The inherent quality of pulses and the nutrient values of dals are not compromised in Bhakti
Dalswhich are a result of due care taken in every process — from seed to food. The company buys
unpolished pulses from large farmers and wholesale markets and then they are 100% laser-sorted, machine-
cleaned so that Bhakti dals are farm-fresh, unadulterated and hygienically processed. Quality Testing is done
for seed quality, packaging and post-packaging making Bhakti Dals a premium quality grain.
Learning from Bhakti dals
Leveraging the distribution network:
• Edible oil distribution network of ADAL can be used in a similar fashion as that of Salt and soda
network of MKS for market penetration.
Product Differentiation:
• Desired intangible attributes in a food product: Taste, Quality, Health and Value for money.
• Bhakti focuses mainly on quality, health and value for money whereas ADAL has scope for
focussing on taste factor too.
Increasing the depth of Product Mix:
Bhakti Dals do not cater the needs of large scale buyers, hotels, restaurants conveniently to a larger
extent because the maximum SKU available on Bhakti is 1 kg pack. This can be taken as an advantage for
ADAL by introducing larger SKUs.
Segmentation:
Opportunities based on income and demography is not explored as only one product type of each
category is available.
Procurement:
Sourcing is solely dependent on Indian farms which can be risky due to uncertainty in monsoons
which may hamper the profit margins. So there should be a right mix of imports and Indian farm produce in
sourcing to mitigate the risks involved and to bridge the demand-supply gap.
Brand Leveraging:
MKSextended its Bhakti brand of salt to introduce a range of pulses thereby leveraging its brand.
DESTINY, SUR, ORGANEEC, SWACH DHANI and PLATINA are the brands under which ADAL sells
its range of edible oil, vanaspati and bakery shortening. As per AC Nielsen ORG MARG „Destiny‟ has
emerged as the highest selling consumer pack brand in India. In line with MKS strategy ADAL may enter
the pulses market by promoting through their more popular brand.
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5. UDAAN 2012 ASMANJAS
Entry strategies
Challenges like retail differentiation,merchandising mix, supply chain management and competitionfrom
supplier‟s brands is the talk of the day.
Segmentation:
Region wise:
Pulse consumption in India differs by region; pulses suchas lentils arepopular in northern India but are not
the pulse of preferencein southern India.As per the market analysis, the pulse consumption pattern is shown
Income wise:
As a brand differentiator and to
stand ahead of the market the product can
be sourced as two different types for
different band of consumers based on
their buying power and income.
Targeting:
About 4-5 per cent of pulses sold in India are branded, of which most are regional brands (3). This
provides a great opportunity to target the untapped market. In today‟s scenario the demand of the branded
pulses will be mainly driven by
o “ Busy Lives Impede An Active Lifestyle” - Individuals who always look out at taste cum
health as a prime factor
o Individuals who are keen on having a healthy diet& Buy best known brands
o Working women who depend on faster cooking as well as healthy food for the family.
Brand awareness:
With a reach of 1 million retail outlets and 80 million consumers, promotional sample dal packs
along with ADAL edible oil, the company will be able to create the brand awareness. They can promote the
product further by any of the following techniques
o Distributing free samples for a reasonable population to spread the brand value
o Sponsor popular regional cookery shows.
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6. UDAAN 2012 ASMANJAS
Positioning:
“Investing The Brand with an Ingredient Insight” should be the mantra .Each brand can be positioned
conveying the following messages as per the demography‟s in which we market.
Strategic group:
ADAL should chalk out a broad strategy to take up the business with these insights
Brand Focus:
With major chunk of pulses being consumed among the primary categories as detailed, ADAL
should concentrate on the priority ones as given below.
Sourcing Strategy:
As ADAL has a strong international presence through edible oil import and export operations, it can
utilize the network for imports of pulses cost effectively which translates to least entry barrier. It leads to
association and strategic partnerships in the long run.
Farmer Growth Initiative:
• Identify and take initiatives to leverage upon the strengths of the large section of farmers.
• Project taken under the aegis to promote economic scalability of farmers undertaking the pulse
production, which would bridge the demand and supply gap in the country.
• Public Private Partnerships (PPP) to cultivate and procure the pulses would earn goodwill among the
farming community which will strengthen the base for agricultural revolution in the concerned areas.
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7. UDAAN 2012 ASMANJAS
References:
1) Global retail consultants KSA Technopak - Challenges & Issues in Retailing of Pulses in India(2011)
2) Economic Times dated 8Jan 25, 2012 on Branded Pulses.
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