Colas, airlines, retailers - their rivalry has become legendary. Joining that list are those pure impulse buys - the snack brands. The battle is between Pepsico Frito Lay's Kurkure and Lays that dominate the Rs 2,000 crore branded snack market and challenger, Bingo from ITC Foods. Right now, they are slugging it out for a shelf near you.
ITC Foods was counting on Lays and Kurkure not being around, when it entered the Food Bazaar chain. While backend sourcing tie-ups between the two may have sweetened the relationship, the bottomline at this retailer is Bingo, which is what you see most when you look for salted snacks. It's not just here that Bingo has struck at the small shops, to whom it's offering a margin that's 4% to 5% higher than what Frito Lays is paying. Not just that, if the display is better, they get paid even more. ITC Food's largeses is largely to catch up with Frito Lay's national reach of 8 lakh outlets.
So, that's distribution but what about the product and pricing? Well, the current No.1, Frito Lays has been lauded for a round pricing strategy, slow but steady taste innovations and the big hit - the 'Made in and for India', Kurkure. After two-years of homework, ITC's offerings are priced at par with Frito's and the USP is as many as 16 variants in one go. The idea to get the consumer to take that first bite.
So, while Bingo is using a high-decibel launch campaign, Frito Lay's new strategy is to get personal with consumers. Through its just launched chaitime contest, it is inviting recipes that use Kurkure. 25 winners along with their families will make it across to 2.5 crore packs of Kukure. Supported by outdoor promotion, the promotion hopes to drive volumes and break the barrier of seasonal demand.
For now, this is how the players stack up in the branded snack narket. Pepsi's Frito Lays leads the pack, followed by Haldiram. ITC Foods hopes to capture a quarter of that within the next four years. But Lays will also have to take distributor margins to a new level, if it wants to maintain its 50% share of the market. It's in negotiations with Food Bazaar and Kurkure could make a comeback in the next 3 to 4 months.
Molshree Vaid
ITC Foods was counting on Lays and Kurkure not being around, when it entered the Food Bazaar chain. While backend sourcing tie-ups between the two may have sweetened the relationship, the bottomline at this retailer is Bingo, which is what you see most when you look for salted snacks. It's not just here that Bingo has struck at the small shops, to whom it's offering a margin that's 4% to 5% higher than what Frito Lays is paying. Not just that, if the display is better, they get paid even more. ITC Food's largeses is largely to catch up with Frito Lay's national reach of 8 lakh outlets.
So, that's distribution but what about the product and pricing? Well, the current No.1, Frito Lays has been lauded for a round pricing strategy, slow but steady taste innovations and the big hit - the 'Made in and for India', Kurkure. After two-years of homework, ITC's offerings are priced at par with Frito's and the USP is as many as 16 variants in one go. The idea to get the consumer to take that first bite.
So, while Bingo is using a high-decibel launch campaign, Frito Lay's new strategy is to get personal with consumers. Through its just launched chaitime contest, it is inviting recipes that use Kurkure. 25 winners along with their families will make it across to 2.5 crore packs of Kukure. Supported by outdoor promotion, the promotion hopes to drive volumes and break the barrier of seasonal demand.
For now, this is how the players stack up in the branded snack narket. Pepsi's Frito Lays leads the pack, followed by Haldiram. ITC Foods hopes to capture a quarter of that within the next four years. But Lays will also have to take distributor margins to a new level, if it wants to maintain its 50% share of the market. It's in negotiations with Food Bazaar and Kurkure could make a comeback in the next 3 to 4 months.
Molshree Vaid
For Moneycontrol India
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