National Stock Exchange-listed KRBL Ltd has launched poha (flattened rice) under its India Gate brand, as part of its efforts to expand in the staples category over the next 3-5 years , said Kunal Sharma, the company’s Vice President – Marketing and Organised Trade.
“We are primarily focusing our launch at this point in Delhi, the National Capital Region, Uttar Pradesh and Punjab. These are the markets that we have largely identified for phase one of our launch,” he told businessline in an online interaction.
The company is selling India Gate poha in select European markets. “We started, maybe, a few months before we started in India. But in Europe, Poha consumption is largely among the expat population,” said Sharma.
Kunal Sharma, KRBL Vice President – Marketing and Organised Trade.
Potential categories
Though it was a limited market, it is seeing good traction there. The company is exploring the northern part of the country, as poha is nuanced in terms of even sourcing. There is one type of poha selling in the eastern parts and consumed largely there as a satiator filling the stomach.
KRBL, which has been operating in the Basmati rice category under the India Gate brand, has been looking at potential categories for expansion over the past two years.
“One of the logical adjacencies for us was staples as a category. So, we started evaluating the overall Staples space and where we could fit in terms of getting into the market,” he said.
From a margin profile, India Gate was looking for something attractive. “There are 3-4 categories that we are currently working on. The first category that we identified to take to market was Poha. It is a large category of about 2 million tonnes annually, and only about 10 per cent of that is actually selling in the packaged form in India,” said Sharma.
Huge opportunity
KRBL saw it as a huge opportunity, as it is largely an unorganised market with only one or two national players in the category. There are three types of poha: Indori poha in the Madhya Pradesh belt, Gujarat poha and Katarni poha in the Bihar and Bengal belt.
The poha launch will not be a one-off event. It will be launched in the North, as there is a huge potential for expansion, as it can replace oily foods and parathas (flat bread).
“Poha has the perception of being healthier amongst consumers. It is getting adopted in the north fast. We are seeing this as a growing market,” said the company’s official.
The product, which is now being shipped to distributors, will be sourced from southern Gujarat. The company is looking at multiple sources from the market. Eventually, it plans to open up the Madhya Pradesh market, sourcing the product from Indore and Ujjain.
Contract manufacturing
On whether the company has entered into contract farming to source raw materials for poha, he said it would consider it at a later stage since the volume to start with is low.
“If we get to 1,000 tonnes monthly volume, then definitely it is something that we will want to do. Currently, the company plans to market 100 tonnes a month, said Sharma.
The company hopes it will get demand for at least 200 tonnes once it launches its product in Madhya Pradesh and Chhattisgarh, which are bigger markets. By the year-end, the company should be able to be in a better position.
Currently, KRBL contract manufactures poha due to the low volume. But given its back-end capabilities, it could consider setting up its own unit, he said, adding that it would help to control quality.
After poha, KRBL could look into staples with a longer shelf life and where the market is largely unorganised, with good gross margins.
Evaluating vermicelli, makhana
“We are now looking at multiple categories. For example, we’re looking and evaluating certain categories like vermicelli and makhana – those kinds of categories where a brand can come in and really build it,” said Sharma.
KRBL’s sale of basmati rice under the India Gate brand witnessed about 10 per cent growth last fiscal. Though export trends have been volatile mainly due to the Iran war, the company is resuming its efforts to gain a better market share soon.
“Last (fiscal) year, the recovery had already started. But I think in this full year, you are probably going to see a recovery of the export business for KRBL,” said Sharma, adding that basmati makes up 95 per cent of KRBL’s revenue.
In a press release, the company said India Gate Poha will initially be available through general trade and standalone modern trade outlets during the launch phase, with plans to expand into other organised retail channels subsequently.
“The product will be introduced in a 500g pack, with extensions into Indori Poha and other variants planned in the near future,” it said.