Local arm of American cereals and snack maker Kellogg Company expanded its product portfolio in India adding the Froot Loops brand of cereals in the country, as it hopes to benefit from a post-covid surge in in-home consumption of packaged foods. Froot Loops is among the fastest growing cereal brands globally and has been introduced in the Indian market based on strong consumer insights including children, the company said.
The pandemic saw Indians eat more snacks at home and expand their repertoire of in-home cooking. This has helped several large food companies increase their reach and portfolio in the Indian market.
“In the post-covid scenario, the last one and a half years, the need for convenience foods has gone up. And as we are differentiating, I see a clear role for Froot Loops in India. It’s been a journey of around six to seven months, within which we have thought through from inception to a market delivery," said Sumit Mathur, director of marketing, Kellogg South Asia.
Kellogg India will make Froot Loops locally. The product is available in supermarkets, hypermarkets and general stores, across all major cities in India. Kellogg has also partnered with e-commerce retailers such as Amazon and Big Basket among others. Kellogg Company entered the Indian market in 1994 promising to change the way Indians consume breakfast, offering them cereals with milk in place of hot idlis, poha and parathas.
However, it has seen limited success over the years. Homegrown as well as foreign companies such as Marico, MTR, Tata Consumer Products, Nestle India have since added more locally relevant ready-to-cook breakfast options to their offerings launching upma mixes, masala oats, idli and dosa mixes as well as chilla mixes.
The market for cereals and oats stands at $300 million. Last year, Kellogg’s piloted a ready-to-cook Upma. It already sells masala oats in the market. In September last year, it also launched K-energy bars. Both products were rolled out in the market as pilots.
The company is in the process of evaluating whether both products can be scaled nationally, said Mathur.
“With both of these we are getting into newer occasions, so we have piloted them…we are seeing some very positive results. We are still in the process of evaluating it with our teams commercially on how they are doing, what’s the consumer response, what’s the kind size of business we are looking at and basis that if we see the right size of prize we are going to scale up," he added.
The company has more products in the pipeline but will continue to build and grow its core cereals offerings.
“Fundamentally, Kellogg’s in India will always start with being a cereal company. My number one priority is how do you continue to grow the cereal category, and do we see the trajectory and tailwind for the cereal category being better than what it has been in the past," he added.
Having said that, Kellogg will look at getting newer occasions and newer categories. That’s because the ready-to-eat category and the ready-to-cook category is also exploding, he added. For the year ended 31 March 2020 the maker of Kellogg’s Corn Flakes and Kellogg’s Muesli reported a 4.75% jump in total revenue at ?1,001 crore; in the same period, it reported a profit after tax of Rs22.33 crore, according to data shared by Tofler. Kellogg’s Chocos is its largest selling brand in the country.
Analysts tracking the sector said the market for such products is still niche. "They are small but high growth categories," said Abneesh Roy, executive director, institutional equities, Edelweiss Securities..
“However, due to pandemic, convenience is a high priority apart from consumers wanting to try new products. Health focus is important to for consumers," Roy said. So, products which actually offer better health benefits will do well.