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German packaged food company Dr. Oetker India, which acquired Fun Foods in 2008, aims to grow its turnover to ₹500 crore by 2020 by expanding the reach of its products, such as mayonnaise, Italian sauces, sandwich spreads and salad dressing.
The company has adopted an umbrella brand strategy wherein Dr. Oetker is the parent brand, while FunFoods is the sub-brand.
Oliver Mirza, Managing Director & CEO, Dr. Oetker India, said: “When we acquired Fun Foods, the size of the business was about ₹28 crore. We expect to close this year with revenues of about ₹125 crore. Our aim is to grow the revenues to about ₹500 crore by 2020.”
The company is in the process of setting up a new plant in Rajasthan with an investment of about ₹200 crore.
While Mirza admitted that the plant had been delayed, he said it is building the plant in a manner that it can scale up capacity without additional construction.
Elaborating on the company’s strategy, Mirza said when Fun Foods was acquired, the contribution of retail sales was lower, adding that the company was focusing on driving the growth of its retail business, while winding down the private labels business and reducing dependence on institutional sales.
He said the company sees huge potential to grow the mayonnaise category, which has the biggest business share, besides pizza and pasta sauces.
Last month, it launched smaller packs for its eggless vegetarian mayonnaise at ₹35 for 100 gm, besides introducing variants to its sauces such as pesto sauce.
The company consolidated its portfolio by exiting the ketchup and muesli segment in the past few years.
“In some global markets, mayonnaise is a bigger category than ketchup, and we believe the same can happen in India. There is huge headroom for us to grow the mayonnaise segment and we are working on lowering the entry barriers. We are also looking to step up engagement with retailers,” Mirza said.
Frozen pizzas Asked if the company is looking at introducing its frozen pizzas that are popular in international markets, Mirza said they could look at the segment in the future.
“It is far too early for the concept of frozen pizzas in the country as the baking culture in India is still in its infancy compared with European markets. India is ready for international food concepts, but the consumer wants the international food products to be tailored to the local palate and culture,” he added.
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