Say Laddoo, pickle and cheese

Priyanka Golikeri , Daily News & Analysis (DNA)

Bangalore, March 7, 2012

There was a time when ready-to-eat and ready-to-make edible products relating to India’s traditional cuisine were available only at neighbourhood provision stores. Now, they are careening their way into ultra-modern supermarkets / hypermarkets across India, as if to give company to Western foods like Dutch Gouda and Edam, and the Italian Parmigiano.

Take the Big Bazaar at Malleswaram in Bangalore for example. Right opposite the entrance, a wheel-cart, emblazoned with the Hinglish term “Banana Mandi”, sells traditional bananas like yalakki (yellow-skinned finger-sized bananas), nendran (big- sized plantains used in making crisps), red banana and poovan (small-sized). This mandi (Hindi for market) is run by the husband-wife couple Baburaj and Jyothi.

Four paces ahead, another kiosk — it is operated by Bhagyalakshmi Butter and Gulkand Store, a popular Bangalore outlet of 1953 vintage — sells bottles of syrupy-sweet gulkand (dried rose petal jam). Next up: a 30-square-feet kiosk run by Murugan Ghee and Butter, another well-known local store of 60 years’ standing,now peddling avakai (spicy mango pickle of Andhra Pradesh), puliogare mix (tamarind-and-lemon-flavoured rice), gongura pacchadi (herbal pickle), bisi bele bhaath (rice savoury) and vangibhaath powders, all stocked in transparent glass jars.

Step out and saunter a few hundred metres across to the Spar Hypermarket. A similar sight greets you. Glass jars laden with murabba and chunda (both mango pickles), pudina (mint) and putani (fried chana dal) chutney powders enliven the food section. Trays full of nipattu (disc shaped crispy snacks), dink (edible gum) laddoos, and sakarpare (flour and sugar snacks) jostle for space.

There is a simple reason why mega-retailers stock traditional Indian food. It expands the customer base and builds loyalty, say retailers. And by absorbing well-known local stores into their fold, retail chains hope to ensure goodwill. Good PR, if you will.

While some neighbourhood vendors open kiosks within retail outlets, others supply their food items to retailers who then display them beside FMCG mainstays like noodles, chocolates and biscuits.

Thus, the outlet becomes a destination for wide-ranging grocery from pickles to international foods, says Venkateshwar Kumar, Big Bazaar’s vice-president in charge of south India operations. Gaurav Gupta, director, Deloitte India, says that local food items act as an additional product category for existing customers while bringing in new customers.

Furthermore, with the growing number of migrants in metros, outlets look to provide a “taste of home”, says Devangshu Dutta, CEO of Third Eyesight, a consulting firm. “This extends market share as new shoppers are targeted,” says Mohit Kampani, chief of merchandising and operations, Spencer’s Retail.

At the Spencer’s outlets, which vary from 2,000-50,000 square feet in size, the food-and-beverages (F&B) section occupies 60% of the floor space. Local fare like mathri (spicy and savory crackers), pinni (sweet dish from wheat flour), tapioca chips and sorpotel (non-vegetarian delicacy) started treading in over a year ago. “This is already making 3% contribution to the overall F&Bbusiness,” says Kampani.

Likewise, at Spar, F&B is a key category covering nearly one-third area in hypermarkets measuring 50,000-60,000 square feet, says Ponnu Subramanian, senior vice-president, merchandising (foods). “Traditional items are stocked on different shelves across the section.”

For local vendors, on the other hand, a presence within modern retail ensures wider reach. Since opening a 120-square-feet kiosk at Spar two years ago, U S Mahendar, managing partner of Hatti Kaapi, a chain serving South Indian filter coffee and snacks like bisi bele bhaathand khara bhaath, has seen a 40% growth in business each year. “Hypermarkets guarantee footfalls,” says Mahendar, adding that their Rs7-8 pricing for a cup is “minuscule” in a mall set-up and helps in pooling people.

Today, the Hatti Kaapi kiosk sells an average 1,500 cups on week days; the count zooms up to 3,000 on weekends.
Jyothinathan, who mans the Murugan Ghee kiosk, says monthly sales always exceed Rs10 lakh, with the average bill per customer exceeding Rs200. “The footfalls are about 500 on week days and double that on weekends.”

It’s not hunky dory all the way. Local vendors say often the rentals at retail chains are exorbitant and prevent their entry into newer malls. Going to every big retailer is not viable, says Mahendar. Why? Some retail chains, he says, demand a 30-40% share in profits “which is impossible for players like us who sell each cup for Rs7-8.”

For retailers, sourcing local food items has its own set of challenges. Traditional food processing industry is highly fragmented, say experts, with 75% of the units belonging to the unorganised sector. Moreover, some units neither have trained manpower nor clean manufacturing facilities to generate quality produce.

“This makes procurement of products tough. We have a team of trained manpower who visit and give guidance on food quality and new product lines,” says Spencer’s Kampani. Kumar says Big Bazaar has tie-ups with specialists in community food from where they source the products. “Most products are sourced locally which helps in keeping costs to a minimum. We also stock products from women entrepreneurs,” says a spokesperson from Bharti Retail which operates Easyday (neighbourhood stores) and Easyday Market (compact hypermarkets).