Companies

For breakfast cereal-maker Bagrry’s, it is snacking time

Purvita Chatterjee Mumbai | Updated on March 12, 2018

Forays into impulse healthy snacking category; assigns ₹100-crore capex for greenfield cereal unit in West or South

Delhi-based Bagrry’s is stepping up its presence in the breakfast-cereal category by assigning a capex of ₹100 crore towards a greenfield manufacturing base. The 25-year-old company has mills in northern India and is now considering a new state-of-the-art facility for making breakfast cereal in either West or South India.

“It is going to be our largest manufacturing plant till date, and we expect to set it up with a capex of about ₹100 crore, either in south or west India since we do not have a plant in these regions. The project is currently at a conceptual stage,” said Aditya Bagri, Director, Bagrry India.

The firm currently has mills in Himachal Pradesh, Delhi, Uttar Pradesh and Rajasthan.

The additional plant is expected to help the company compete more aggressively with MNC competitors such as Kellogg’s and PepsiCo in the ₹1,400-crore breakfast-cereal market.

With an 18 per cent market share, the ₹120-crore Bagrry’s considers itself the second-largest player in the breakfast-cereal category after Kellogg’s. In the museli segment, it claims to have 40 per cent share.

“We have been a niche player with our oats and muesli, but are now increasingly looking at functional foods. We recently made a foray into the impulse healthy snacking category,” he added.

Snacking

Tapping into the ₹30,000-crore snacks segment, which is still largely unorganised, Bagrry’s expects to tap into a range of health-based products such as makhanas (foxnuts), and oats- and cereal-based snacks.

“We want to to approach the snacking business like a start-up since we have an appetite to grow and innovate like them. Snacks are expected to give a turnover of ₹30 crore in the first year with e-commerce playing a large part in selling the products.

“We have been giving a fight to Kellogg’s over the years. With snacks, we will have to contest with MNCs such as PepsiCo (Lays), too.”

The company also plans to add organic and super foods such as quinoa as new categoriesto its portfolio.

Reaching its products out to about 70,000 outlets, Baggry’s also takes the help of Indo Nissin Foods (the makers of Top Ramen noodles) for distribution.

PEs funds

PE funds have also been eyeing the company, but Bagrry’s is not in a hurry to get on board external investors, Bagri claimed.

“We have been getting feelers from PE funds over the years, but have not taken any funding so far.”

Published on March 12, 2018

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