The waiting game is over for Agro Tech Foods. Three years ago, the company in which ConAgra holds a 51 per cent stake, had launched Sundrop peanut butter here, relying on imports from its US affiliate.
Today, Agro Tech is all set to commission its peanut butter facility in Gujarat towards the second half of this fiscal.
The long wait has been full of learning. When it launched, Agro Tech knew what it was up against. Indians love their butter, cheese and jam, but peanut butter, well, that was something else.
Healthier alternative
What was attractive about Sundrop was that it is priced at a mere Rs 99 for a 500-gram jar. It did the trick in attracting customers but the more important message it had to spread was that peanut butter was a healthier alternative to both cheese and butter.
Mr Asheesh Kumar Sharma, Head of Marketing, points out, “There are not too many vegetarian sources of protein and we wanted to drive home the point that peanut butter was a great option with dietary fibres as the additional benefit.”
During this time, the prices of Sundrop peanut butter were hiked, in phases, to Rs 119 and Rs 149. Earlier this month, there was yet another increase to Rs 180 for a 462-gm jar but Mr Sharma believes this is still a competitive price vis-à-vis other imported peanut butter brands.
Accepted brand
“We obviously priced it very low in the initial phase to attract customers and the fact that people still buy our brand shows its level of acceptance today,” he says. The company wrapped up 2011-12 with sales of 50,000 jars a month but the overall peanut butter market in India at 300 tonnes annually is still way behind butter and cheese at 40,000 and 14,000 plus tonnes apiece. Other brands seen in the Indian market are Funfoods, Skippy and Prutina.
Agro Tech's market feedback showed that Sundrop peanut butter sales in Bangalore, Mumbai and Delhi, where people are more exposed to western brands, were brisker than other parts of the country. Another finding was that older consumers preferred the ‘creamy' option while youngsters opt for the ‘chunky' version.
Two to tango
Agro Tech also noticed that jam always accompanied peanut butter at the breakfast table. “This prompted us to launch the ‘honey roasted' alternative. We believe this is where the future lies in India,” Mr Sharma says.
The new plant will not only help meet such specific customer requirements in taste but also help Agro Tech offer smaller jar sizes. Going forward, the company will have 100 and 200 gm options at more affordable price points. While ‘honey roast' is also expected to be the biggest money spinner for the company, it would also explore some spicy options in peanut butter. “This will take some time in coming as we will take one thing at a time,” Mr Sharma says. The company will also continue importing its 462-gm jars for a while even after the Gujarat plant begins operations.
gmurali@thehindu.co.in