Financial Daily from THE HINDU group of publications
Saturday, Jun 08, 2002
New Products & Services
Marico launches groundnut oil under Sweekar brand
MUMBAI, June 7
TO leverage the equity associated with Sweekar, the brand name for its refined sunflower oil, the Rs 700-crore Marico Industries has launched another variety of refined oil under the same brand name, this time a refined groundnut oil.
With this, Marico sells three types of refined oils sunflower, soyabean and groundnut under the Sweekar brand.
Considering the groundnut crop is grown domestically and is not subject to volatile price fluctuations and varying customs duties unlike imported oils such as soya and sunflower, the company has decided to bring out a refined oil of groundnut pegging it at Rs 62 for a1 kg pack.
Speaking to Business Line, Mr Pranab Datta, CEO, Healthcare, Marico Industries Ltd, said, "The launch of the new product will bear no additional cost to the company. We will continue to use our existing distribution network for the new product."
Interestingly, demand for refined groundnut oil which is perceived as a premium product has not been growing as rapidly as that of sunflower oil. However, industry observers believe that Marico's strategy could be to try to occupy the market space vacated by leading brands such as Postman, whose visibility has been waning.
In recent months, the price of the commodity itself has been on the rise. Added Mr Datta, "We do realise that groundnut oil prices have been on the rise, which is going to affect our volumes to a certain extent, but the local production of the crop has been good this season."
Apart from Postiano, a brand from those formerly associated with Ahmed Mills (owners of Postman), the groundnut variant of Sweekar would be pitted against the likes of other groundnut oil brands such as Godrej and Gemini in the branded refined oil market .
The groundnut oil market is a premium one with a franchise restricted to the western part of the country. Marico is hoping to exploit these markets comprising mainly Gujarat and Maharashtra. As Mr Datta says, "There is demand for groundnut oil and this gives us a scope to explore the market."
But the groundnut oil market is a static one, dominated by unorganised players offering the product in a filtered form.
The more than Rs 100-crore brand of Sweekar, with its sunflower oil, enjoys a five per cent volume share in the ROCP (refined oil in composite packet) market, while its soya variant occupies a one per cent volume share in the same market.
Sweekar is, in fact, perceived to be the fighter brand in Marico's portfolio compared to its more premium brand of Saffola (with its safflower and kardi-corn variants).
The Sweekar ad account remains with the Mumbai-based agency Chlorophyll. Last year, the brand was recast with a patented technology (LoSorb) to make the food cooked in the oil absorb less oil. Adds Mr Datta, "We would like to explore different media for the new groundnut oil. In Mumbai, we are at present advertising the product on bus signages."
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