Saffola feels its oats to take on rivals

Saffola Oats has become the highest distributed oats brand in the country, according to market estimates, and could be clocking ₹125 crore in FY-16. The brand from the Marico stable has already crossed ₹80 crore, and has received a renewed fillip with focus on new growth drivers such as flavoured oats.

Saffola, the country's leading brand of healthy cooking oil from Marico, launched its range of oats in 2010. Keen to leverage the health quotient of the Saffola brand, the company introduced variants of oats catering specifically to Indian tastes. There has been no looking back.

Saffola Oats competes with offerings from PepsiCo’s Quaker, Horlicks, Britannia and Kellogg’s.

“Though multinationals arrived on Indian breakfast tables with their oats brands way before us, we have managed to corner 67 per cent market share in oats," said Saugata Gupta, Managing Director and CEO of Marico. “The brand has grown over the past five years with our focus shift," he added.

While Saffola Oats has increased its market share to 21 per cent, Marico has broadened its market share in the value added flavoured oats segment. In the third quarter of FY-15, Saffola Oats clocked value growth of 48 per cent year-on-year.

Analysts have said that Saffola Oats is expected to garner revenue of ₹90 crore in FY-15. The CEO is, however, more confident. “We should be crossing ₹100 crore this year,” he said.

Oats consumption across India was a mere 13 per cent in 2013, according to Nielsen research, and was focussed on certain areas in the South, particularly Chennai (with 37 per cent) and Kochi (with 34 per cent), which had higher penetration. However, the acceptance of savoury oats has helped ensure higher penetration in other regions.

Marico was the first in the country to launch savoury oats. Its masala variants are all the rage. “We have peppy tomato and veggie twist masala flavour in our oats. Though we had cranberry and strawberry flavours, the masala ones are doing far better than the sweet versions," said the CEO.

Stating that consumers tend to see health and taste at the opposite ends of the spectrum, “consuming healthy means a compromise in taste and vice versa," Marico realised that growth could be “unlocked only if there is no tradeoff between the two."

The entire effort of the brand has been to move from breakfast to the in-between meals category. “We could have got into a niche category, and did it with atta (flour), that is good for cholesterol. However, we failed at it, and realised that we were actually locking the brand into one area," he said, referring to why the company decided not to stick to the breakfast category with its oats.

“Our entire effort has been to move from breakfast to in-between meals. Indians want crunchiness, and we decided to put that to advantage," he added.

Speaking about how the brand exploited an Indian habit, the CEO said, "Indians like it savoury. For their in-between meals, we don't like it sweet. For most people, sweet is only desert. We thus decided to capitalise on savoury oats."

That one main insight has helped "completely unshackle the brand," said the CEO, adding that Marico has sharpened its focus on new growth drivers in the food categories such as oats and muesli.

Renewed focus is expected to drive volume growth in the business and sustain market share gains, analysts have said, pointing out that Marico is planning to prototype new launches in FY-16 in the value-added foods segments.

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