Capital Foods goes ethnic with new brand of ground spices

Purvita Chatterjee Mumbai | Updated on July 09, 2012 Published on July 09, 2012

Mumbai-based Capital Foods plans to enter the whole and ground spices category under a new ethnic brand — Raji. The Future Ventures promoted company has been dabbling in western and oriental specialty sauces, instant noodles and cooking aids under brands such as Ching’s and Smith & Jones since the launch of the company in 1996.

Unorganised segment

“Ground and blended spice is predominantly an unbranded market with just a couple of players. The new brand Raji will need an investment of Rs 30 crore for the next 2-3 years,” said Mr Ajaay Gupta, Managing Director, Capital Foods. With just a handful of players such as Everest and MDH, it is mostly regional brands that make up the estimated Rs 500-crore organised ground spices segment.

“With the new food safety laws in place, the market is moving to packaged spices. We also would be taking these spices to markets in the US and Singapore with its huge Indian Diaspora,” added Mr Gupta.

Export business

In fact, cracking the Indian food market has always been a challenge for the company that posted a turnover of Rs 140 crore last fiscal. In spite of being an Indian foods company, it decided to start its venture with oriental and western food. “We are still trying to understand the Indian food market and have gone slow with our Indian offerings. But our export business is thriving with our ready-to-eat range as India food has made headway in the US and the UK,” says Mr. Gupta.

The company has an export turnover of Rs 38 crore and sells Ching’s brand of Chinese instant noodles and the Swad brand of ready-to-eat paranthas and frozen fruit in the US, Canada, Singapore and Dubai. It also markets the Smith & Jones range of ketchups and ginger-garlic paste. The new brand of Raji will now get exported to these countries as well.

In the Indian market, Capital Foods is pitted against big multinationals (MNCs) such as Nestle and HUL. It has already garnered a 10 per cent share in instant noodles under the Ching’s brand where the Nestle’s brand dominates with a 55 per cent market share. It also competes against HUL in the cooking aids category under the latter’s Knorr franchise.

After garnering share in instant noodles, Ching’s also has entered the soups category but has limited volumes currently. The biggest challenge for Capital Foods continues to be distribution as it has a limited presence in only 3 lakh stores, while MNCs such as Nestle have their brands across 8 lakh stores in the country.

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Published on July 09, 2012
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