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Nutrine under Godrej set for new highs

The new owners have drawn up a plan that will see the brand spread its wings

WIDENING THE BASKET: A Mahendran, Director, Godrej Beverages and Foods, looking at the chocolates produced at the Chittoor unit of Nutrine Confectionery Company. Nutrine was acquired by the Godrej group recently.

THE WELL-KNOWN Indian brand Nutrine has become a part of the Godrej group following the acquisition of Nutrine Confectionery Company Private Ltd. by Godrej Beverages. With competition getting fiercer by the day in the confectionery industry, the brand is set for reaching new highs.

The new owners have already drawn up a grand plan that will see Nutrine spread its wings within India and expand outside as well. Godrej has always pined for an array of brands in its kitty. The latest acquisition allows an instant entry into the organised confectionery market.

The Indian confectionery market can be segmented broadly into seven categories — hand boiled candies (HBC), toffees, eclairs, chewing gums, bubble gums, mints and lozenges. Nutrine is keen to have its footprints in all the categories within three years, says A. Mahendran, Director, Godrej Beverages and Foods Limited (GBFL), which has acquired 100 per cent equity holding in Nutrine.

Distribution network

The organised confectionery business in India is worth nearly Rs. 1,400 crore. Of this, the HBC segment alone is worth around Rs. 800 crore, lozenges and mentos Rs. 300 crore, chewing gums Rs. 250 crore and lollipops and polos the balance. Today, Nutrine has a 26 per cent share in the HBC market.

In an interview with The Hindu during a plant visit by this correspondent to Chittoor in Andhra Pradesh, Mr. Mahendran said Godrej had kept in mind three main factors — distribution, market leadership and profitability — while acquiring Nutrine.

The confectionery company, in the last 50 years, had built up a large distribution network. This was now readily available for Godrej to start its game plan.

Having bought a profitable company, Godrej had decided to infuse fresh funds to the tune of Rs. 15 crore into Nutrine to upgrade technology, expand distribution network in the North and the West, improve the export market and finally get into innovation mode, Mr. Mahendran said.

Italian technology

Perfetti of Italy, no doubt, was among the early ones to bring in new technology. It brought in deposit-filling technology in candies, when others were content with the normal mould-filling technology. GBFL had now decided to launch "Maha Maha Lacto,'' using the deposit-filling technology. This would help Nutrine gain market share in a big way. Under the new dispensation, Nutrine would also make a foray into chewing gums and mentos. The company had been spending nearly 10 per cent of its revenue on research and development. Recently, it had launched "Choco Rolls''.

There are three major players in the HBC segment — Parle, Nutrine and Lotte (formerly Parrys' Confectionery). The segment had already seen a high level of consolidation, when GBFL and Lotte took over Nutrine and Parrys' Confectionery respectively. The trend would continue with more players coming in, he added.

Entry of MNCs

The market has been evolving with the entry of many multinationals. More investments were taking place in the industry. Mr. Mahendran was hopeful that this category would grow at 8 to 12 per cent annually. The organised market was 60 per cent and the unorganised 40 per cent. In five years the organised segment would raise its share to 80 per cent.

GBFL would enter soft milk chocolates by April next but this would be under the Godrej banner. Mr. Mahendran also indicated his company's entry into roasted and ground coffee. It might not be averse to entering into a tie-up with a domestic or international player for this purpose, he added.

The Godrej basket is now half filled with items such as confectionery, juices and soya milk. It will soon add other items that will help the group get entrenched in the packaged food industry.

SHANTHI KANNAN

in Chennai

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