IIPM Admission

Wednesday, March 31, 2010

Anghsuman Paul writes about the challenges that food entrepreneurs in India are facing,

especially when it comes to creating and sustaining their brands

“India produces the largest number of fruits and vegetables and there is a huge market for such agri-products globally. So we really don’t know why there’s no Indian brand in this category yet!” That was Holly Higgins, Agricultural Minister–Counsellor, US Embassy, replying to our query whether Indian business can ever create a global food brand. His words are almost prophetic if you simply analyse available data in a country where even today arguably 74% people are still dependent on agriculture for their daily income. In the backdrop of this lush-green poster, not being able to boast of a single Indian food brand that has a global presence comes as a real dampener!

While India has failed to create and sustain a captive food brand, American brands like Kellogg’s and global food giants like Nestle and Heinz have not only stamped their footprint across the country, but are also growing furiously at about 10% year on year. Sure Indian players like Dabur and Parle have succeeded in creating successful food brands within the country, but even they have failed to create waves on the global stage. So here’s the pertinent question – what have the Indian food giants missed out on when it comes to creating a niche for themselves in the global food market?

First, let’s talk quality - the quintessential ingredient for any food brand. Elisabeth M. Kein, Former President, American Society for Quality feels that entrepreneurs in India find it a tad difficult to adhere to the stringent international standards on this front. She explains that “most global food brands have created their corporate credibility through their high standards” and that most are happily encashing this credible corporate image by launching numerous brand extensions. Be that as it may, one cannot deny the fact that given a conducive environment, Indian players have it in them to establish powerful brands that can be a force to reckon with in the global market. For instance, according to FICCI’s export data, there are 40 small and middle-scale companies who are exporting fruits, vegetables, spices and pulses to Europe, USA and Africa, but all of them prefer to merely export to big retailers globally, rather than take on the headache to invest in their own brand building. Simply look at the foreign operations of an Indian player like Kohinoor Foods Ltd., and you find that over the past two decades, 90% of its production volumes have been exported to global retailers like Walmart and others. The sad part of the tale is that Kohinoor has never stopped to ponder otherwise. So, what really is holding Kohinoor back? “If they create a brand, a global retailer like Walmart will never buy from them,” explains Elizabeth.

Besides, creating a brand takes time and most entrepreneurs in the business don’t possess the deep pockets to be able to afford the long break-even periods involved. So instead, these players have gone the Chinese ‘export’ way (by hedging the aforesaid investment and brand-building risks) and therefore kept themselves at a safe distance when it comes to investment risks.

For more articles, Click on IIPM Article.

Source : IIPM Editorial, 2010.

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.

For Exclusive Footage by Sunday Indian Click Here

Outlook Magazine's B School Ranking Scam Exposed
Don't trust the Indian Media!
IIPM exposes Career 360 and Mahesh Peri scam
IIPM - We will change your outlook : Career 360 and Mahesh Peri scam is exposed

Prof Arindam Chaudhuri of IIPM on MF HUSAIN‎
IIPM Related Links
Management guru Arindam Chaudhuri’s latest blockbuster book, Discover The Diamond In You
Exclusive In chat with Society Magazine - Prof. Arindam Chaudhuri

No comments: