To say that India is a large market is a bit of an understatement. It has the largest population in the world and a strong food culture. It’s also still a developing market and there are loads of opportunities just waiting to be tapped.

Over the next few weeks, Market Shake will be focusing on the Indian market with insights from our experts. 

• First, we look at three success stories of international brands that entered the Indian market with Jay Mota.

• Then, Sanjeev Srivastav helps us understand the Indian consumer a little bit better.

• Praveen Dhawan gives us a glimpse into distribution and go-to-market strategies for India.

• Finally, we check out trends and innovations on display from the Anuga Select 2024 trade show in Mumbai.

Let’s dive straight in with GourmetPro expert and Founder of Atom Consultancy, Jay Mota, as he examines the strategies taken by three global brands to expand in India and how they succeeded in breaking free from the common challenges associated with the market.

1. Malkist

Malkist, a popular Indonesian brand known for its unique crackers, successfully entered and established itself in the Indian market during the peak of the COVID-19 pandemic. 

A significant part of Malkist's success in India can be attributed to its strategic distribution partnerships. Unlike many brands that rely heavily on extensive marketing campaigns, Malkist initially focused on ensuring that its products were widely available. This approach was particularly effective during the lockdowns when traditional food supplies were disrupted, and consumers turned to their local stores for essentials.

By partnering with distributors who could place Malkist products in a variety of retail outlet formats – from modern trade stores to local kirana (mom-and-pop) shops and even in small cigarette shops – the brand achieved a high level of market penetration in Metro cities. This wide availability meant that Malkist products became a common sight across various retail environments, making it easy for consumers to try and adopt the brand.

The right time and place

The timing of Malkist's market entry played a crucial role. During the lockdowns, consumers faced limited shopping options, and the introduction of a new, easily accessible product like Malkist crackers provided a welcome addition to their limited choices. The fact that Malkist required no special education or re-learning for the consumers – being a food they were already familiar with – also facilitated quick adoption. Biscuits are practically a staple in the Indian consumer’s shopping basket and the sector is a highly competitive one.

The products were also visibly displayed at local neighborhood stores, encouraging consumers to pick them up when they were willing to try new products.

Product positioning and pricing

Malkist positioned its products as affordable yet high-quality snacks. Even though Malkist does sit in a premium positioning in the context of the Indian biscuit market, the initial launch was in the form of single-serve packs – one cream-filled cracker sold for just INR5, the lowest price point for the biscuits category. Despite being an imported product, Malkist managed to keep prices competitive by leveraging cost-effective ingredients like refined wheat flour, vegetable oil, and sugar. 

The single cracker itself was a substantial product and filling, so it enhanced the eating experience. This promoted the value-for-money positioning among consumers.

The range of products also featured unique flavors not usually seen in crackers in India, including cheese, cappuccino, sugar, and chocolate. There are no cheese-flavored biscuits or cookies with a cheese center in India other than Malkist right now.

Malkist’s texture was different from products available in the market, which further enhanced the consumption experience.

Crackers are usually salty products in India, targeting older consumers looking to avoid sweet biscuits. Cream biscuits are aimed at children. Malkist, on the other hand, were slightly sweet and targeted young adults, but quickly became a hit with all age groups.

Malkist is meant to be a fun and indulgent product and the brand was not shy to position itself as such. The low price point combined with the novel flavors set it apart and encouraged initial trials, which made it an attractive option for a wide demographic. 

Brand ambassadors and trust building

Once Malkist had established a robust distribution network in their test markets centers, they introduced a brand ambassador to build trust and enhance brand recognition. Initially, the brand did not rely heavily on celebrity endorsements. However, as it grew in popularity, Malkist brought in a well-known and widely trusted figure as a brand ambassador to solidify its reputation as a trustworthy and quality brand.

Takeaway

Malkist's success in the Indian market demonstrates the power of strategic distribution and timing. By ensuring widespread availability during a period of high demand and limited options, and later leveraging a trusted brand ambassador, Malkist effectively secured its place in the market. This strategic combination of distribution, timing, and brand positioning allowed Malkist to become a popular choice among Indian consumers, showcasing a successful entry and establishment in a competitive market.

Like what you’re reading?

2. Lindt

Lindt as a brand requires no introduction in India. Known for its premium quality and 150-year-old legacy, Lindt has always been a popular duty-free purchase for Indian travelers for gifting. In fact, Euromonitor data indicates that chocolate and confectionery is the most purchased category by Indian consumers in duty free and travel retail: 35% of Indian shoppers in this channel buy these products, compared to around 30% of the global average. Lindt has recognized the potential of the Indian consumer and has even launched promos in the travel retail space specifically targeting Indian consumers, including a Diwali gifting activation across multiple airports in India and the Middle East.

Challenges 

Despite the brand’s popularity with the Indian consumer, it had not made many inroads into the country’s retail channels. In fact, for the longest time, Lindt chocolates were sold in the country through gray market suppliers. 

• Sales would not be regular, just one-off massive orders for special occasions. 

• There were no official distributors to address quality concerns like melting or spoilage.

• The lack of an official presence meant that any issues with the product, such as those related to storage and quality, could not be addressed effectively, impacting consumer trust. 

• It also meant that prices were not standard and neither was supply.

India has the potential to be a major market for luxury chocolate brands for a number of reasons.

1. Disposable incomes are on the rise, allowing for consumers to indulge in aspirational purchasing.

2. The boom in retail channels, from large organized retailers to quick commerce platforms, allows brands to reach consumers through multiple touchpoints.

3. Chocolate is popular as a treat and for gifting.

For Lindt to tap into the Indian market, they needed to make sure that these issues were addressed. 

Positioning and pricing

Lindt moved to establish official distribution channels in the country, ensuring its products carried the proper labels and adhered to the quality standards expected from the brand. They worked with established importers and distributors who complied with government regulations and were able to maintain a consistent supply of products throughout the year.

Lindt also spent time understanding the trends within the market and the needs of the consumer. While gifting is an important use case for chocolate consumers in India, there was already pretty strong competition within this space. 

In addition, the standard gift pack sizes available in other countries and in travel retail would be prohibitively expensive for most Indian consumers. So, for the Indian market, Lindt introduced smaller packs that allowed consumers to experience the chocolate at a much more affordable price. A 27g pack of 3 chocolates priced at INR150 (US$1.79) made them accessible to a much wider audience of middle-class consumers who might not spend a large amount on luxury chocolates but were willing to buy smaller packages as gifts or treats for themselves. The standard 200g gift pack is priced at INR900 (US$10.77). 

Promotion

While there haven’t been any overt promotions for this brand – it may not need any – the gifting angle has been highlighted quite well in ads for quick commerce platforms, as seen here.  

Takeaway

One of the key aspects of this offering from Lindt is a strong understanding of the price sensitivity of Indian consumers, but also the aspiration for premium or luxury products. In India, a gourmet or luxury product at an entry level pack can cater to a much wider audience than the standard sizes would. The entry level products at the smallest size possible does not devalue the brand either. There may very well be takers for even a single unit of any one of these products.

This is a smart strategy from a distribution point of view as well. A 900-rupee product may be stocked only in select stores, but a 150-rupee product can be carried by many more, even small neighborhood and kirana stores. This increases access to the product as well as visibility for curious consumers. 

Lindt isn’t the only chocolate brand to use this strategy. Ferrero was one of the first companies to employ the same strategy for its own premium chocolate brands. Both companies’ success in India is a testament to the importance of understanding local market dynamics, adapting to consumer behavior, and ensuring product accessibility through official and reliable channels. 

Join us at SKS Japan 2024!

We’re is thrilled to announce that GourmetPro will be covering SKS Japan 2024, the biggest food tech event of the year , from Oct 24-26.

Want in? 

If you can’t be there in person, join the virtual show.

3. Biscoff

Biscoff, known for its unique malted cinnamon flavor, is a globally recognized brand but did not have an official presence in India till very recently. Belgian company Lotus Bakeries, which owns Biscoff, announced a partnership with Mondelēz International in June 2024 where the latter would make, sell, and market Biscoff in India. This may be a bit of an uphill battle because sweet biscuits is an incredibly crowded market and there are numerous well-established and affordable alternatives to Biscoff. 

Even with Mondelez’s strong distribution network in India, it remains to be seen how this partnership will grow the Biscoff brand. However, the Biscoff Speculoos spread is another story. 

Availability and positioning 

Biscoff faced the challenge of establishing itself in a space already familiar with various spreads like jams, peanut butter, nut butters, and Nutella.

Both the biscuits and the spread were available only in gray market channels thus far. But they also became available at bakery supply stores and the spread in particular turned out to be a great hit with home bakers. They emphasized the spread’s versatility, using it in recipes like Biscoff cheesecake, as a drizzle, and in drinks. Today, many dessert menus and bakeries carry a Biscoff-based dessert, popularizing the brand and product among consumers. 

This approach has helped create a niche market for the spread and differentiated it from other spreads. 

• Jam is the most popular spread in India, but it is mostly associated with home consumption on bread/roti. 

• Unlike Nutella, Biscoff is chocolate- and nut-free, offering a different experience. 

• Peanut butter is a relatively new product for India but is not really consumed by children unlike in the rest of the world; its primary consumers are gym goers. 

Leveraging consumer familiarity 

Biscoff leveraged the existing popularity of spreads in India, such as Nutella, by presenting itself as a novel alternative but not necessarily as a spread. The brand's strategy to be seen as an innovative ingredient rather than a direct competitor to existing spreads has allowed it to carve out a unique market position. 

Organic growth

A significant aspect of Biscoff's success was its organic growth driven by word-of-mouth. The unique flavor and versatility of Biscoff products led to widespread use and recommendation among consumers, chefs, and bakers. The brand has also benefited from the trend of premiumization in the food and beverage sector, where consumers were willing to pay a premium for distinctive and high-quality products.

The rise of local imitations of Biscoff, referred to as “Biscott spreads” has validated the brand's market acceptance and demand. 

Takeaways

Biscoff's success in India can be attributed to its strategic positioning not as a spread but as a versatile and value-added ingredient for various culinary applications as well as its use of alternative distribution channels for expansion. This innovative positioning made it appealing to both individual consumers and businesses, particularly bakeries and cafés.

Key points to remember to enter the Indian market

1. India is no longer as much a price-sensitive market as it is a value-sensitive market. Consumers may not be willing to spend a large amount in one shot but are definitely willing to trial new products and upgrade when they see value in what they are paying for.

   • This is where small pack sizes are immensely effective. They allow for Indian consumers to try new products and make repeat purchases, while also making money for the company.

2. Brands need to put in a lot of time and effort into figuring out who their distributor is going to be and how to incentivize them in the long term. It’s also important to choose distributors with a lot of experience and understand where and when products need to be launched for maximum impact.

   • Distributors with 10-15 years of experience will have a strong sense of the cyclical nature of the industry in India and know when is the right time to introduce a new product. It’s often a good idea to work towards listing and launching products during February to May. As June to December is the peak season for sales, this gives enough time for the product to be known and accepted. 

Leverage Jay’s expertise to succeed in India.

That’s all folks

Thanks for reading today’s newsletter.

See you next week.

About Us: GourmetPro is a global network of elite food and beverage industry talents. We provide fractional hiring solutions, allowing international managing directors to scale and transform their local resources and teams with high flexibility and expertise in more than 30 countries. Explore our services.

Made with ❤️ by GourmetPro - your network of Food & Beverage experts, on demand.

💖 And if you think someone you know might be interested in this edition of Market Shake, feel free to simply forward this email or click the button below. 💖

👉 P.S.: GourmetPro is also on LinkedIn and X!