WITH organised retailing coming up in a big way across the country, the revenue model of the fast moving consumer goods (FMCG) firms is witnessing a change. The Rs 3,700-crore cooperative dairy giant Gujarat Co-operative Milk Marketing Federation (GCMMF), which sells Amul and Sagar brands of dairy products through 5,00,000 unorganised retailers, is now generating 3% of its total revenues from organised retailers.
The biscuit manufacturer Parle Products, which sells its products at retail stores as well as the local paan outlets, is also benefiting as sales to organised retail chains grows. “Our revenues from these stores in the last two years have increased rapidly. But it is difficult to quantify it,” says Maria Iyer of Parle Products.
A local snacks manufacturer, Balaji Foods, has seen its revenues from organised players shoot up to 10% from a mere 3% in the last two years. “Earlier, neighbourhood kirana stores were the primary purchase point. But in recent times, there is a visible shift towards hyper markets for purchase of foodgrains and other grocery products,” says Piyush Sinha, professor of marketing at the Indian Institute of Management, Ahmedabad.
The revenues of the Vadodarabased Rs 200-crore Ashwin Vanaspati India, which sells the corn oil brand Korndrop, has seen its revenues from the organised retail stores go up to 5% from 2% of total sales in the last two years. GCMMF has joined hands with Pantaloon, Adanis and Shubhiksha for the supply of bulk quantity of its products. RS Sodhi, CGM of GCMMF, feels that Amul is getting better mileage from the organised retail set up as there is no one to influence the consumer behaviour like kirana stores where shop-keeper pushes rival brands that might be fetching better margins for him. “Amul is a trusted brand and customers get an opportunity to use their discretion to buy it in super stores and hyper markets,” added Mr Sodhi.
The biscuit manufacturer Parle Products, which sells its products at retail stores as well as the local paan outlets, is also benefiting as sales to organised retail chains grows. “Our revenues from these stores in the last two years have increased rapidly. But it is difficult to quantify it,” says Maria Iyer of Parle Products.
A local snacks manufacturer, Balaji Foods, has seen its revenues from organised players shoot up to 10% from a mere 3% in the last two years. “Earlier, neighbourhood kirana stores were the primary purchase point. But in recent times, there is a visible shift towards hyper markets for purchase of foodgrains and other grocery products,” says Piyush Sinha, professor of marketing at the Indian Institute of Management, Ahmedabad.
The revenues of the Vadodarabased Rs 200-crore Ashwin Vanaspati India, which sells the corn oil brand Korndrop, has seen its revenues from the organised retail stores go up to 5% from 2% of total sales in the last two years. GCMMF has joined hands with Pantaloon, Adanis and Shubhiksha for the supply of bulk quantity of its products. RS Sodhi, CGM of GCMMF, feels that Amul is getting better mileage from the organised retail set up as there is no one to influence the consumer behaviour like kirana stores where shop-keeper pushes rival brands that might be fetching better margins for him. “Amul is a trusted brand and customers get an opportunity to use their discretion to buy it in super stores and hyper markets,” added Mr Sodhi.