Kishore Biyani is on a new quest: to transform the ₹22,000-crore Future Group into a consumer products major.
Already well established on the Indian retail space, Biyani has chalked out a three-pronged strategy for the FMCG thrust, from which he expects sales of ₹20,000 crore by 2021. The game-plan includes getting into new food categories with a slew of private label products, setting up manufacturing units in partnership with global players’, and acquiring smaller but established brands.
Speaking to BusinessLine , Biyani said, “We are being ‘reborn’ as an FMCG major. In 2008, we had projected a revenue of ₹10,000 crore from our consumer brands and now we want to double it to ₹20,000 crore by 2021. Almost 70 per cent of our brands have to be our own as we cannot make money selling other people’s products.”
Private labels help derive better margins and profitability, therefore, Biyani is getting into new categories such as oats, flour, biscuits and frozen food. “We will be creating new categories like varieties of oats and atta with value-added products which are not what the MNCs make,” added Biyani.
Over the years, Future Group has brought on board professionals from HUL and PepsiCo, which will help the company give a boost to its FMCG business. Early this year, former HUL veteran Devendra Chawla was promoted as Group President to integrate the Food and FMCG business.Food parks
The main thrust of Future Group’s FMCG business will come from its food parks, which will develop a host of products. A separate company with a ₹1,000-crore investment has been launched to set up food parks in Karnataka, West Bengal and Madhya Pradesh.
Future Group has also decided to forge alliances with international FMCG and food companies to set up manufacturing bases.
It is negotiating with companies in Australia, the US and Europe to manufacture, distribute and retail their products in India.
One of the group companies, Future Consumer Enterprise, already has a licensing arrangement with California-based Sunkist Growers’ Sunkist brand.
The product was launched in the general trade and would get manufactured at its food parks. The company has also picked up stake in smaller start-ups like Sarjena Foods, makers of the Baker Street brand.
“We will soon be manufacturing the Baker Street brand of bakery items at the food parks,” said Vishaal R Vira, Director, Sarjena Foods.