With the early onset of monsoon and promise of good rains, cottonseed firms are vying with one another in grabbing the attention of farmers, distributors and the village-level retailers.
They are flooding television channels in Andhra Pradesh and Telangana with advertisements as farmers make long queues for seeds in major towns.
“We have been witnessing this trend for the last three years. It was not there earlier. The cost of airing these ads is much more than making them,” M Prabhakara Rao, Chairman of Nuziveedu Seeds, told BusinessLine .
The firms have roped in character actors such as Prakash Raj and Krishna Bhagawan to promote their seed brands. Some top firms are promoting more than one brand.
Sales numbers dip “It is not just top firms. Even small firms with small volumes of sales have also joined the race. Though the industry is facing a financial burden due to significant increase in cost of production, the firms are spending like anything,” K Niranjan Kumar, a leader of Seedsmen Association and Chief Executive Officer of Garc Seeds Private Limited said.
Telangana grows cotton in 17 lakh hectares and Andhra Pradesh in 5 lakh hectares.
Though it initially thought there would be stagnation in sales volumes, the industry is in the process of revising the number upwards.
The industry, sold about 4.75 crore packets (450 gm each) last year, has an inventory of 6.5-7 crore packets. The industry hopes to clear part of the piled up stocks.
“The big firms have deep pockets and the ad budget would be a small portion of their turnovers. But it is not the same case with smaller firms. They are being forced to spend to get the same visibility that their bigger competitors are getting. Also, they must keep the distributors in good humour,” a seed firm executive said.
Cost structure No firm would like to reveal the actual size of their budgets. That a 10-second slot in a TV channel costs about ₹4,000-6,000 gives an indication on the likely spends. There are at least 10 major channels in the two Telugu States with considerable reach. This is in addition to the conventional advertisement channels such as hoardings and wall impressions.
“Remember that they have to buy more than one slot to make an impact and get a recall value. It just reminds us the ad blitz generally carried out by educational institutions in the summer,” the executive said.
Planting gathers speed Meanwhile, cotton planting has gained pace on better than expected rainfall in June this year.
As of Thursday last, cotton was planted on a total of 34.9 lakh hectares, up 20 per cent from corresponding last year's 29.1 lakh hectares.
The higher area was mainly due to increased acreages in states such as Maharastra, Telangana and Karnataka.