Catalyst

What the retail shelf of tomorrow will stack

Chitra Narayanan | Updated on May 02, 2019 Published on May 02, 2019

With start-ups hacking your kitchen, the future of packaged goods looks fairly different

Kale chips, quinoa puffs, different flavours of peanut butter in tiny single-use sachets, spinach-flavoured makhana, organic tomato chutneys, exotic beverages — a quick tour of the food labs section at the recently concluded IReC 2019 showed a pattern. Consumption trends are changing dramatically in India.

The retail, e-commerce, tech and payment summit organised by Franchise India and ShopX had a little corner devoted to FMCG entrepreneurs and it was fascinating to see the new spaces that these start-ups were getting into. Most seemed to be catering to health and on-the-go lifestyles.

For Ritu Marya, editor, Retailer, the Franchise India magazine behind the event, whose team had reached out to nearly 400 start-ups in the consumer brand space for this section before finalising the 16 who showcased, the aim was to get a glimpse of what the retail shelf of tomorrow would look like. “Health is superseding taste now,” she says, pointing to Green Snacks co’s kale chips and six grain offerings. There were start-ups like Provee, retailing peanut spreads in tiny sachets, I Say Organic, which had moved beyond fruit and vegetables and pulses, to chutneys and jams to curb wastage.

Also, points out Marya, so many of the start-ups are catering to new lifestyles.

Indeed, the insights that emerged from the summit on new lifestyles — more vegan consumers, more people on all sorts of dieting regimes, ranging from intermittent fasting to high-protein low-carb ones, and several who don’t eat in the evenings — pointed to emergence of new kinds of food needs. Most of these start-ups are hacking your kitchen, says Marya, to meet these new needs. An eye-opener was the sheer number of consumer-focussed product start-ups at the event — nearly a thousand.

But V S Kannan Sitaram, venture partner, Fireside Ventures, who had a session at the event on why growth potential is in new brands over large brands, felt that we are just seeing the beginning of a consumer brand explosion. “By all yardsticks, the number of brands we see in India is way behind developed countries,” he says, forecasting a huge growth. Fireside, interestingly, was one of the earliest investors in the consumer space.

Sitaram explained why he thinks we will see more and more FMCG brands soon. “The average Indian is becoming far more affluent and increasingly being seen at the top of the pyramid. A few years ago, that consumer was not visible. Today, that consumer is 7 to 9 per cent of the population and could soon be 15 per cent,” he says.

What these consumers are buying is very different, according to Sitaram. For example, they look at clean labels. Their achievement motivation for their kids is very high and this influences their shopping. The quality of homes, cars, eating out, lifestyle, all have gone up exponentially. And this gives room for disruption and for start-ups to start filling the white spaces.

The challenge is that when so many new products have popped up, how do they create memorable brands. Take the organic space itself — it is getting quite saturated. So how do these brands stand out on the retail shelf or grab the consumer eye?

Brand as a bridge

Sitaram says that several among Fireside’s portfolio of entrepreneurs are clued into branding intuitively. There are start-ups like Samosa Singh, boAt (which is into electronic accessories) that are clued in. For others, Fireside intervenes in different ways.

“boAt had some clear insights. There were a bunch of functionalities that consumers were looking for in accessories like headphones that they were not getting from big brands. But boAt did not stop with that. They focused on creating a cool design element along with that,” he says.

The brand building and marketing was done through a whole series of influencers. The influencers are not mega stars but people who do cool things.

But Fireside also has in its portfolio others with great consumer insights and great products but lacking in a brand strategy. For that, Fireside put together an outsourced team. For instance, it got Lumiere Business Solutions, a consumer research company, to do some trend research, both inside the country and outside, and then do a workshop with the company to develop a brand strategy.

“That one day of everybody collaborating has proved to be very pathbreaking,” says Sitaram, who underscores the importance of brand building. “Between the product and the consumer — the brand is the bridge — and hence it is important for the communication to be just right.”

Published on May 02, 2019
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