The Hindu Business Line : Knorr's challenge

IT'S never been easy for Hindustan Lever Ltd to crack the foods category in India. Primarily known for its marketing skills in detergents and soaps, fattening its margins in the foods business has always been an issue. This in spite of acquiring some of the famous food brands such as Knorr from International Bestfoods a few years ago.

Today while Knorr continues to be one of the biggest brands in parent Unilever's kitty, Knorr Annapurna as a food brand is yet to establish its dominance in the Indian foods category. The company is innovating with new cooking aids and products which have never been present in the market before under the brand.

Taking a chance with the acceptance of such products has led to some going off the shelves. For instance, about a year ago, when the ready-to-eat Knorr Annapurna's 4 O'Clock Tiffins brand failed, HLL said the product had in any case been launched on a limited base. Soon after, Stormy Sauce, which was launched last January, was seen for just a couple of months before being withdrawn. The verdict given by industry observers was that it was not catering to regional tastebuds.

Today, HLL is no longer willing to take chances in the unpredictable foods market. It has decided to launch innovative products, which have universal appeal and cut across all regional tastes and preferences. "Brands such as Soupy Snax and Aromax are here to stay and there will be advertising on these brands," claims Sandeep Kohli, Business Manager, Knorr Annapurna, HLL.

While Soupy Snax is being positioned as a snack between meals with different favours, Aromax is an all-spice ingredient which can be used to enhance the taste of any kind of dish. In spite of embarking on extensive research, HLL did realise that it was the real market place findings which would actually prove whether the product was accepted.

In fact, HLL has always been cautious while launching any new food product or brand. "We always look at the most cost-effective way and are quite sure about what we are doing behind any launch," says Kohli. This would entail not splurging on advertising until and unless the product actually gets accepted in the market. For instance, HLL had decided to put its Tiffins and Stormy Sauces in a "limited way" in the market and did not unleash ad campaigns immediately.

In the case of Tiffins, HLL thought it could enter the area of snacking and encourage in-home consumption for the product, giving consumers a healthier option compared to Maggi Noodles. However, it found the product did not suit consumer palates and was taken off the shelves.

Taking another chance, HLL thought that sauce was a largely untapped market with no national players in the chutney segment. Analysts had warned at that time that chutney was not a tested market and that HLL had to get its pricing and taste right before it launched the product.

However, it went ahead and launched `Stormy Sauce' in Minty Coriander and Chilli Tomato flavours. Serving as substitutes for homemade chutneys, the sauces were meant to be served with ethnic dishes such as idlis. Promoted as an accompaniment that adds excitement to any snacking moment, it was expected to go well with all Indian and Western snacks. But obviously regional tastes varied, and HLL had to withdraw them.

Now Knorr Annapurna has gone into break-time snack soup powder under the sub-brand, Soupy Snax. With flavours such as Tomato Tease, Spicy Vegetable, Chicken Punch and Peppery Chicken, HLL is planning to grow the niche soup market with these small-sized offerings, which are pegged at Rs 5.

On the rationale behind the launch of its soup powders, Kohli says, "After doing research, we realised that working professionals do not have an offering that is tailor-made for their break. Knorr Annapurna Soupy Snax is a snack offering that addresses this need. It is designed to offer a great-tasting and highly convenient snacking experience."

After trying out sauces, tiffins and soup powders, HLL has decided to tap a niche segment with its Knorr Annapurna brand. Recently, it launched an all-dish spice powder under the sub-brand Aromax. Carrying the baseline, `Uplifts the natural taste of every dish', sachets are pegged at Rs 20 for 45 gm and jars are available in 90 gm (Rs 40) and 180 gm (Rs 75).

Made at HLL's manufacturing facilities in Navi Mumbai, Aromax marks the entry of a national player in the spices market hitherto dominated by regional players with regional brands. JWT Bangalore, which already has its Soupy Snax brand of soup powders, will be handling its new Aromax sub-brand as well. "There is nothing like a taste enhancer in the market at present and we intend having a new campaign for the brand," states an account executive with JWT.

In the past, HLL has been test-marketing certain spices under its Annapurna franchise in Navi Mumbai. However, the launch of an all-dish spice as a taste enhancer increases the acceptability of the product since it can be used across all types of food. According to industry observers, "The product may claim to satisfy taste needs through a cross-section of dishes, but what remains to be seen is whether the consumer would see a perceived benefit in using it compared to the existing spices meant for making specific dishes."

"At present, there are no taste enhancers and it is a niche market which HLL can exploit," observes Jagdeep Kapoor, Managing Director, Samsika Marketing Consultancy. But HLL is keeping its fingers crossed. In has decided to tread carefully in the `sensitive' foods market with its Knorr Annapurna offerings. Realising the `niche' nature of its offerings under the brand, it has also decided to curtail the distribution of certain products. Recently, it decided to restrict the number of outlets for its premium value added salt - Knorr Annapurna Platinum salt. Besides, its ready-to-eat chapattis under the same brand are also being retailed at certain outlets.

"Food is still a nascent market and the challenge is to cater to different taste profiles. People demand more from what they put in their mouths compared to what they wash their clothes with," says Kohli.

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