The Hindu Business Line : Crème de la crème

Discerning Indians and food connoisseurs are spending on cheese, wine and spirits and delicatessen including cold cuts, frozen meat and fish; packaged food such as cookies, chocolates, jams and preserves; cakes and muffins; beverages – tea, coffee, juices; exotic vegetables (asparagus, broccoli, celery, leek); and organic food.

A Daily Bread outlet in Bangalore.

Fancy this: A basket of French village sandwich breads, loaves of Mediterranean breads and croissants spiced up with radish and peppered mustard dips, jalapeno jams accompanied by Bordeaux wines and topped with Italian gelatos. This is no European meal at a fancy restaurant, or a fantasy of a foodie. But an indication that upmarket global foods have started appearing more often on Indian dining tables or breakfast counters.

Retail and business consulting firm Technopak Advisors estimate the current market size of gourmet food market in India at Rs 4,500 crore (SEC A), with the NCR, Mumbai and Bangalore combined accounting for more than half the total market. Whether it’s Turkish hazelnuts, Italian gelato or French cheese and wine vinegars, or fine breads, the time could well have come for high-end brands in the country.

Take the case of the humble bread, which Indians only knew as white, and in the last few years as a healthy brown. It has now taken amazing hues and almost 50 avtars and some of them as expensive as Rs 280 per loaf at Daily Bread, a premium chain of bakeries run by Daily Bread Gourmet Foods. Says its Founder and CEO, Arjun Sekri, “Gourmet food experiences are becoming common and we have people who buy a basket of special breads, some condiments, sauces and jams for a party.”

Daily Bread stocks about 50 varieties in breads alone, with another 100 in pastries and desserts. When Sekri launched his first store in Bangalore in November 2003, there were hardly any premium breads being sold in the country. “Even if there were a few brands available, they were not consistent in their supply and so we saw an opportunity here,” he explains. A pre-launch market survey revealed that premium bakery, confectionery and specialty foods were a neglected area in the country. And so there was a huge pie waiting to be bitten into.

Nilgiri’s, one of South India’s oldest retail chain with an interest in bakery and dairy products, is testing the waters with Blue Oven, a top-end patisserie. Prabhu Ramachandra, Director, The Nilgiri Dairy Farm, says enhancing the bakery chain would be done in a phased manner as luxury food is a “growing market in the country.”

Even at Daily Bread, it’s still institutional sales (to coffee pubs, restaurants and corporates) that comprise a larger share (65 per cent) of its sales. But Sekri is confident that soon his retail sales would touch 60 per cent of his turnover. Daily Bread now has 18 outlets selling various types of fresh, partially baked and frozen European-style loaves, baguettes, rolls, paninis, ciabattas, multi-grains, croissants, foccaccias, organic breads, gluten - free breads, Danishes and doughnuts. The desserts section offers gelatos, fresh and frozen cheesecakes, mousse cakes, gateaux, fruitcakes, fruit tarts, pastries, brownies, meringues, lamingtons, éclairs, cookies and specialty praline chocolates.

Daily Bread is now retailing in four formats: shop-in-shops in hypermarkets and supermarkets, standalone stores, dine-in concept and live bakeries. With Britannia picking up a 50 per cent stake in the company, Sekri hopes to accelerate his growth plans: 25 new outlets and food emporiums this fiscal across Delhi, Chennai and Hyderabad. And Sekri has not stopped at the oven alone. Soon after the launch of the first few stores, he realised that his customers needed condiments, spices and sauces to go with the breads. “I cannot have them running to the nearest retail store to complete the meal. And so decided to stock on these accompaniments as well.”

There’s a whole range of jams, dips, cheeses and cold cuts that food connoisseurs need on their tables and so Daily Bread decided to go the whole hog and offer all of these to customers.

Discerning Indians and food connoisseurs are spending on cheese, wine and spirits, delicatessen including cold cuts, frozen meat and fish, packaged food including biscuits, cookies, chocolates, jams and preserves; cakes, muffins; beverages such as tea, coffee, juices; exotic vegetables asparagus, broccoli, celery, leek and organic food.

A few months ago ‘Boursin Cheese’, a premium cheese brand from the Unilever stable, was launched in India through the Mumbai-based FMCG company R.R.Oomerbhoy, along with Maille mustards and a wine vinegar. Boursin Cheese is fresh cheese airlifted straight from France and is available in combinations perhaps unknown to the Indian palate - garlic and fine herbs, black pepper and shallot and chive. While local processed cheese costs about Rs 45, Boursin Cheese costs Rs 350 (150g pack). The Maille mustards cost Rs195 (215g) and vinegars are priced at Rs 190. Compare this to synthetic vinegar, which is commonly used in India, priced at about Rs 30. Oomerbhoy also stocks other premium international food brands such as Bertolli Olive Oil and Barilla Pasta.

And next month, departmental stores in India will sell premium hazelnuts from Turkey -- brought to India by Delhi-based Dalmia Continental (a player in the olive oil industry) under the brand name ’Leonardo’. These hazelnuts, claimed to be a rich source ofenergy and vitamin E, are being sourced from Turkey-based Gursoy Tarimal Urunler Gida. They will be spiced and packaged in Mumbai in a snack format in three Indian flavours - masala, chatpata and pudina.

Says V.N. Dalmia, Chairman, Dalmia Continental: “We are buying hazelnuts at Rs 5,000 per kg - about 10 per cent costlier than almonds. Obviously, hazelnut is a premium product worldwide. Till now India knew of it only as an ingredient in chocolates and other food items; but now we hope Indian consumers will take to snacking on premium hazelnuts.” Dalmia Continental hopes to bring in more premium products such as canola oil from Canada, table olives from Spain and a high-end olive oil variant from Italy.

Urmila Zutshi, Head, Consumer Development, R. R. Oomerbhoy is upbeat about consumer response, which has so far been overwhelming, especially in the case of Boursin Cheese, showing a sales growth of 20 per cent per month.

Nicholas Paul, Managing Director of the Chennai-based Tan Business Ventures Pvt Ltd, says, “The delicatessen concept had really caught on in the metros. Also, modern retail chains want to outsource these products and the requisite expertise in procuring, storing, handling and processing, and the future’s bright for this segment.” Prime Deli now has eight stores in operation in Chennai, Bangalore and Hyderabad. These are in partnership with standalone supermarkets such as Chennai’s Amma Nana or with chains such as Spencer and FoodWorld. The company is in talks with other supermarket chains to open shops-in-shops in various cities. Prime Fresh, housed in Prime Deli counters, is its other brand for hygienically processed fresh meats and the company expects good demand for those products too. Thirty centres each in Chennai, Hyderabad and Bangalore along with a few more in the smaller cities such as Mangalore, Mysore and Puducherry by 2009 is the company’s goal.

J. K. Madan, Executive Manager at Maison des Gourmets, a gourmet store-cum-delicatessen in Chennai, reckons there are at least 10,000 people in the city who look for this kind of stuff every day, so the market size would be around 1-2 per cent of that for the grocery and fresh food market. Total sales across the city for such products (not just in his store) would be around Rs 2 lakh.

Madan says Maison is better off by itself; tying up with retailers means that they will have to contend with someone else handling things. He also believes the market is not so big for deli counters at supermarkets. In fact, there shouldn’t be more than 4-5 outlets of such high-end delis in one city as the speciality appeal is lost. Maison has a counter at Landmark in Spencer Plaza which is just a “market opportunity” to create awareness and familiarise people. Business-wise, it’s not a big draw, says Madan candidly. Maison is looking for space to open its second store in Chennai.

Brand consciousness and Indulgence

The reason for the new Indian’s increasingly expensive taste for good food is attributed to global travel and brand consciousness. Nine million Indians travelled abroad last year and 54 per cent of the Indian population is below age 20 and increasingly becoming brand conscious. A Technopak research shows that consumers in this segment spend Rs 4,500 per month on gourmet food products. But will there be repeat purchases, because these are experiences are obviously indulgences and the Indian’s fetish for dal-roti is well-known. Says Sekri, “Once they get used to eating our breads, there is no going back.”

Mr Sachiv Mehta, Senior Consultant, Technopak Advisors, says that frequency of purchase varies according to product categories - for example, bakery, meat products and exotic vegetables are bought on a weekly basis whereas cheese, chocolates and wines are typically purchased once a month. Taking no chances with fresh tastes that could turn sour, retailers are planning to focus on educating consumers on aspects such as product attributes, usage and country of sourcing. Apart from free sampling and tasting sessions, customers have to be subtly educated on how to use some of the food products, says Sekri. Daily Bread, for instance, has just hired a food specialist who will train salespeople in the bakery to help customers choose the right sauces, condiments and dips for the right breads. So that Buche Chevre, Gruyere de Comte, Beaujolais and Cotes du Rhone don’t become unpronounceable names and wine and cheese evenings become more frequent.

Reporter associates:

Sravanthi Challapalli, Swetha Kannan

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