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March 5, 2025
Nisha Qureshi, Afaqs
5 March 2025
Bournvita, a chocolate-flavoured malt drink produced by Cadbury under Mondelez, is a household name in India. Marketed as a health drink that supports children’s growth and development, it holds a 15-16% share in the Indian health food drink sector, second only to Horlicks, which dominates with nearly 50%.
Its advertising has traditionally centred on themes of health, confidence, and mental strength, with campaigns such as Tayyari Jeet Ki resonating strongly with consumers.
The Food Pharmer controversy
Despite its strong market presence, Bournvita has faced criticism over its high sugar content and other ingredients, sparking public debate and legal scrutiny. The controversy escalated last year when health influencer Revant Himatsingka, known as Food Pharmer, called out Bournvita for its excessive sugar levels.
Himatsingka’s video criticised Bournvita for its high sugar content and potentially harmful additives, such as caramel colouring agents. His claims triggered widespread consumer backlash and prompted Mondelez India to issue a legal notice, dismissing his allegations as “unscientific” and “distorted”.
However, the legal action only intensified public scrutiny. In response to mounting pressure, Bournvita reduced its added sugar content by 14.4%, from 37.4 grams to 32.2 grams per 100 grams of powder.
Can influencers salvage Bournvita’s reputation?
More than a year after the controversy, Bournvita has launched a large-scale influencer campaign to highlight its lower sugar content and nutritional benefits. The campaign features influencers visiting Bournvita factories to vouch for its authenticity and health benefits.
While the concept of factory tours is not new—brands such as Parle and Havmor use it as an extensive strategy to build consumer trust even in the absence of any controversy.
The concept has since been adapted by several brands. ID Fresh, known for its packaged idli and dosa batter, faced allegations of contamination with animal bones.
In response, it launched TransparenSee, a trust-building initiative that allowed consumers to take virtual tours of its production facility via live streaming, offering an unfiltered view of its operations.
However, marketing experts argue that Bournvita’s approach may not be enough to restore its credibility, as it relies heavily on influencer testimonials rather than direct consumer engagement. Crisis communication, they caution, must be handled with transparency and genuine action.
Bournvita’s strategy bears similarities to Shein’s controversial influencer-led factory tour campaign, which backfired. In June 2023, the fast-fashion retailer invited US influencers on a paid trip to its ‘Innovation Factory’ in Guangzhou, China, to counter allegations of labour exploitation.
Instead of improving Shein’s reputation, the trip sparked further backlash, with critics dismissing it as a PR stunt designed to manipulate public perception.
Mondelez defends the campaign
Speaking about the campaign, a Bournvita spokesperson says, “At Mondelez, our unwavering commitment to quality, transparency, and consumer trust defines everything we do. This campaign is a testament to our ongoing efforts to engage meaningfully with consumers.”
He further emphasises that Mondelez aims to go beyond influencer marketing by engaging directly with key stakeholders such as mothers and nutritionists, offering deeper insights into the product’s quality and nutritional benefits.
The need for authenticity over promotion
Krishnarao Buddha, a former senior category head of marketing at Parle Products, remains sceptical of Bournvita’s approach, arguing that credibility issues cannot be resolved through influencer endorsements alone.
“Instead of relying on paid influencers, brands should adopt a transparent and action-driven approach. In today’s digital age, where public scrutiny is at an all-time high, authenticity is the key to earning and retaining consumer trust,” he explains.
Devangshu Dutta, CEO, Third Eyesight, echoes similar concerns, stressing that once trust is broken, it takes time to rebuild.
“A single influencer campaign cannot erase past controversies. Brands need to engage in consistent and transparent communication about real improvements. Bournvita highlights its nutritional benefits, but consumers need more than promotional content—they need tangible proof of change, such as independent testing and direct consumer engagement,” he asserts.
Sandeep Goyal, chairperson and MD of Rediffusion, critiques Bournvita’s approach as an “MBA (Marketer’s Belly Ache) strategy” that prioritises corporate messaging over authenticity. “In today’s digital landscape, consumers are highly aware of paid promotions, making traditional marketing tactics less effective. Instead of attempting to control the narrative through influencers, brands should focus on rebuilding credibility through transparency and honest communication,” he advises.
Lessons from Cadbury’s past crisis management
This is not the first time Mondelez has had to navigate a brand crisis. In October 2003, just before Diwali, Cadbury Dairy Milk faced a major scandal when customers in Mumbai discovered worms in chocolates. The Maharashtra FDA seized stocks from its Pune plant, leading to widespread concern and a 30% drop in sales.
To regain trust, Cadbury launched Project Vishwas, an initiative to educate 190,000 retailers and reassure consumers. It invested Rs 15 crore in improved packaging without raising prices and enlisted Amitabh Bachchan as a brand ambassador. The campaign successfully restored consumer confidence.
Will Bournvita’s efforts be enough?
While Bournvita has taken steps to address consumer concerns, relying on influencer marketing alone may not be sufficient to rebuild its credibility. As past examples show, true reputation recovery requires more than just strategic campaigns—it demands tangible action, consistent transparency, and genuine consumer engagement.
(Published on Afaqs)
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March 4, 2025
Kashmeera Sambamurthy, Storyboard18
4 March 2025
A growing number of health advocates and industry watchdogs in India are raising concerns over misleading food advertisements, challenging brands on their claims and pushing for stricter regulations in an industry where marketing often outpaces oversight.
Recently, lifestyle guru Luke Coutinho called out quick-commerce platform Zepto over what he described as a misleading advertisement for garlic bread on Instagram. Sharing a screenshot of the ad on his social media, Coutinho criticized its promotion of refined carbohydrates as a bedtime snack, calling it “unethical” and a product of corporate greed. Tagging regulatory bodies including the Food Safety and Standards Authority of India (FSSAI) and the All India Institute of Medical Sciences (AIIMS), he urged authorities to take action.
Similarly, Dr. Arun Gupta, convenor of Nutrition Advocacy in Public Interest (NAPi), a national think tank of medical experts, pediatricians, and nutritionists, highlighted a full-page advertisement in Delhi Times for Amul TRU, a fruit drink brand. The ad, published on February 14, emphasized the “goodness of real fruits in every pack,” but Gupta pointed out that the listed ingredients contained concentrated fruit rather than fresh produce.
These instances reflect a broader pattern of misleading advertising in India’s food and beverage sector. While such controversies have long existed, it was only on February 7 this year that the Indian government announced the formation of a 19-member committee, led by Union Minister of Food Processing Industries Chirag Paswan, to address deceptive marketing practices and introduce more stringent regulations.
India’s struggle with misleading food advertisements dates back years. The Advertising Standards Council of India (ASCI) and FSSAI signed an MoU in 2016 to curb deceptive advertising in the food and beverage sector. Two years later, the Ministry of Information and Broadcasting (MIB) issued an order restricting junk food advertisements on children’s television channels, though they remained permissible on mainstream networks.
Despite these measures, misleading claims persist. In 2023 alone, FSSAI flagged 32 instances of food business operators violating the Food Safety and Standards (Advertisements & Claims) Regulations of 2018. That same year, actor Amitabh Bachchan faced criticism for endorsing Britannia Milk Bikis in a Kaun Banega Crorepati Junior commercial, where the biscuits were equated with the nutritional value of atta roti and a glass of milk.
Health influencer Revant Himatsingka, widely known as ‘Food Pharmer,’ also took on the industry, calling out Cadbury Bournvita for its high sugar content. Mondelez International reduced the product’s sugar levels by 15 percent and dropped its ‘health drink’ label from marketing materials.
The regulatory landscape includes four key frameworks to combat misleading food advertisements: the Food Safety and Standards Act (FSS Act), the Food Safety and Standards (Advertising and Claims) Regulations, 2018, the Consumer Protection Act (CPA), 2019, and the ASCI Code of Self-Regulation.
However, Gupta argues that these regulations require amendments to better define misleading claims. In 2024, NAPi lodged a complaint with FSSAI against advertisements for Parle-G Royale biscuits, which allegedly misrepresented their sugar content. The response? “There is no FSS regulation which says that nutrients will be declared in the advertisement,” authorities stated.
Gupta further highlighted that when FSSAI initially flagged 150 misleading advertisements in 2023, that number was later reduced to 32, with no clear updates on enforcement actions. “When the Kaun Banega Crorepati ad equated Britannia Milk Bikis with atta roti and milk, NAPi protested. The ad was pulled, but no fines were imposed,” he noted.
Celebrity endorsements add another layer to the issue. The 2024 TAM AdEx report found that food and beverage advertisements accounted for 28 percent of all celebrity-endorsed ads in India. The Consumer Protection Act, 2019, prohibits celebrities from endorsing banned products but allows promotions unless explicitly prohibited by law.
In a telling 2006 interview with journalist Karan Thapar, Bollywood superstar Shah Rukh Khan defended his endorsement of soft drinks, arguing, “If soft drinks are bad, ban their production. If production is not stopped due to revenue concerns, don’t stop my revenue.”
ASCI CEO Manisha Kapoor observed that influencers frequently promote foods without disclosing financial ties to brands, making endorsements appear organic rather than paid sponsorships. Sweta Rajan, a partner at Economic Laws Practice, expressed concerns that celebrity-backed marketing distorts public perception of healthy eating. “The continuous exposure to such ads makes it difficult for consumers to make informed choices,” she said.
The recently formed 19-member government committee has been met with skepticism from experts who believe it may lack independence. “The committee does not include a public health expert. Half its members belong to industry bodies. It should form a subcommittee to define what constitutes healthy food,” Gupta said.
Himatsingka called for stringent penalties against brands found guilty of misleading advertisements, suggesting that companies be publicly named on a weekly basis. Rajan, meanwhile, warned against excessive regulation, arguing that it could stifle creativity. “A balance must be struck between regulation and creative advertising,” she said. Instead, she proposed incentives for brands that adopt honest marketing practices.
Some experts advocate for clearer front-of-pack labeling. “Currently, most food labels prioritize regulatory compliance over consumer awareness. Since literacy levels in India are lower than in many Western nations, labels should be simple and easy to understand,” said Devangshu Dutta, chief executive of consultancy firm Third Eyesight.
Taxation has been another approach. Many processed foods in India attract an 18 to 28 percent GST rate, yet brands such as Coca-Cola, Lays, and Haldiram’s continue to thrive. “While taxes have some impact, they are not enough on their own,” Rajan noted.
Gupta suggested replacing FSSAI’s ‘Health Ratings’ – which he says benefit the industry more than consumers – with clear warning labels on ultra-processed foods. He said, “Consumers should be alerted to the risks, not misled by arbitrary ratings.”
(Published on Storyboard18)
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September 16, 2024
Sesa Sen, NDTV Profit
16 September 2024
As India’s economy grows and digital technologies reshape consumer behavior, the future of kirana stores—the quintessential neighbourhood grocery shops—hangs precariously in the balance.
These soap-to-staple sellers, once impervious to change, now confront an existential threat from quick commerce players like Blinkit, Instamart, Zepto, and from modern retailers such as DMart and Star Bazaar, raising a pivotal question: Can kiranas survive the pressure of change, or will they die a slow death?
The All India Consumer Products Distributors Federation, that represents four lakh packaged goods distributors and stockists, has recently raised alarms, urging Union Minister for Commerce and Industry Piyush Goyal to investigate the unchecked proliferation of quick commerce platforms and its potential ramifications for small traders.
Their concerns are not unfounded. Data suggests that the share of modern retail, including online commerce, which is currently below 10%, is set to cross 30% over the next 3-5 years. Much of this growth will come at the cost of traditional retail.
“Unless the government takes on an activist role to support the smallest of business owners, the shift toward large corporate formats is inevitable,” according to Devangshu Dutta, head of retail consultancy Third Eyesight.
Casualties Of The Boom
Madan Sachdev, a second-generation grocer operating Vandana Stores in eastern Delhi, has thrived in the recent years, adapting to the digital age by taking orders via WhatsApp and employing extra hands for home delivery.
Despite having weathered the storm of competition from giants like Amazon and BigBazaar, he now finds himself disheartened, as his monthly sales have halved to about Rs 30,000, all thanks to quick commerce.
Sachdev is worried about meeting expenses such as rent, his children’s education, and other household bills. He finds himself at a crossroads, uncertain about how to modernise his store or adopt new-age strategies in order to attract customers in an increasingly competitive market.
India’s $600 billion grocery market, a cornerstone for quick commerce, is largely dominated by more than 13 million local mom-and-pop stores.
Retailers like Sachdev are also seeing a steep decline in their profit margins from FMCG companies, which now hover around 10-12%, down from the 18-20% margins seen before the Covid-19 pandemic. The consumer goods companies are instead offering higher margins to quick commerce platforms so that they can afford the price tags.
Quick deliveries account for $5 billion, or 45%, of the country’s $11 billion online grocery market, according to Goldman Sachs. It is projected to capture 70% of the online grocery market, forecasted to grow to $60 billion by 2030, as consumers increasingly prioritise convenience and speed.
Many of the mom-and-pop shops are family-run and have been in business for generations. Yet they lack the resources to modernise and compete effectively with larger chains. Modern retail businesses, including quick commerce, begin with significantly more capital, thanks to funding from corporate investors, venture capital, private equity, and public markets.
“They can scale quickly and capture market share due to a superior product-service mix, larger infrastructure, and more robust business processes,” said Dutta.
Moreover, their ability to engage in price competition poses a challenge for small retailers and distributors, making it difficult for them to compete.
“This is something that has happened worldwide, in the largest markets, and I don’t think India will be an exception,” Dutta said, adding that it would be incomplete to single out a specific format of corporate business such as quick commerce as the sole villain in this situation.
“India is a tough, friction-laden environment at any given point in time, including government processes which don’t make it any easier,” he said.
Peer Pressure
Data from research firm Kantar shows that general trade, which comprises kirana and paan-beedi shops, have grown 4.2% on a 12-month basis in June, while quick commerce grew 29% during the same period.
Shoppers are becoming more omnichannel, rather than gravitating towards one particular channel, said Manoj Menon, director- commercial, Kantar Worldpanel, South Asia. “While the growth [for quick commerce and e-commerce] might appear to have declined compared to a year ago, a point to note is that the base for these channels has significantly grown. Therefore, achieving this level of growth is still commendable.”
Consumer goods companies such as Hindustan Unilever Ltd., Dabur India Ltd., Tata Consumer Products Ltd., etc., have acknowledged the salience of quick commerce to their packaged food, personal and homecare products. The platform currently comprises roughly 40% of their digital sales.
“We are working all the major players in the quick commerce space and devising product mix and portfolio. This is a very high growth channel for us,” according to Mohit Malhotra, chief executive officer, Dabur India.
Elara Capital analysts have pointed out that the share of quick commerce is expected to rise to60% in the near future with e-commerce and modern trade turning costlier for FMCG brands than quick commerce. “The larger brands tend to make better margins on quick-commerce platforms versus e-commerce due to lower discounts on the former,” it said in a report.
However, it is too premature to draw a parallel between kirana and quick commerce in terms of competition, given the significant size difference.
The average spend per consumer on FMCG in kirana stores stands at Rs. 21,285 annually while the same is Rs. 4,886 for quick commerce, according to Menon.
Rural Vs Urban Divide
Quick commerce is still an urban phenomenon. In contrast, in rural settings, where internet penetration is still catching up and access to large retail chains is limited, kirana stores continue to thrive.
According to Naveen Malpani, partner, Grant Thornton Bharat, while the growth of quick commerce is undeniable, this channel is not poised to replace traditional retail, which still has a wider reach in the country. “It will complement older models, filling a niche for immediate, smaller purchases. Also, a 10-20-minute delivery may not have a strong market pull in rural markets where distance and time are not much of a concern.”
Yet many others believe, even in these areas, the challenge is palpable.
The small businesses are beginning to feel the sting of same slow decline that once befell the ubiquitous telephone booths in the era of mobile phone, according to Sameer Gandotra, chief executive officer of Frendy, a start-up that is building ‘mini DMart’ in small towns where giants like Reliance and Tatas have yet to establish their presence.
As rural customers slowly start to embrace digital shopping and seek more variety, kirana stores must adapt or risk becoming obsolete, he said.
Besides, the popularity of quick commerce is set to challenge the dominance of incumbent e-commerce platforms, especially in categories such as beauty and personal care, packaged foods and apparel.
“Quick commerce is primarily operational in metros and tier 1 markets, which is impacting the sales of traditional companies in these areas. However, if quick-commerce players were to extend their operations to tier 2 and tier 3, it would even challenge companies such as DMart and Nykaa, and would pare sales and profitability,” noted analysts at Elara Securities.
Frendy’s Gandotra believes the journey for kirana stores is not a lost cause, but it requires strategic interventions. Many kirana store owners struggle to integrate point-of-sale systems, inventory management software, or even digital payment solutions. These stores need to embrace technology.
Another aspect is the need for policy support. Regulations to ensure fair competition can prevent monopolisation by large retailers. Additionally, subsidies, tax benefits, and grants for infrastructure improvements can help small businesses adapt to changing market dynamics. With renewed support, kirana stores can continue to be the backbone of Indian retail.
Nonetheless, there will be some who’ll be left behind during this shift. Analysts at Elara Capital warn that the swift rise of quick-commerce platforms, combined with aggressive discounting, could wipe off 25-30% of traditional grocery stores.
(Published on NDTV Profit)
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August 31, 2024
MG Arun, India Today
Aug 31, 2024
Nearly five years after the Centre brought in norms to rein in multinational e-commerce companies operating in India, Union commerce minister Piyush Goyal sparked fresh controversy by raising concerns over the rapid expansion of e-commerce. He also drew attention to the pricing strategies used by some e-commerce firms, questioning what he termed “predatory pricing”.
“Are we going to cause huge, social disruption with this massive growth of e-commerce? I don’t see it as a matter of pride that half our market may become part of the e-commerce network 10 years from now; it is a matter of concern,” Goyal said at an event in New Delhi last week.
His comments come at a time when the ecommerce business in India is growing exponentially. Estimated at $83 billion (around Rs 7 lakh crore) as of FY22, the market is expected to grow to $150 billion (Rs 12.6 lakh crore) by FY26. The growth will be due to multiple levers: a growing middle class, rising internet penetration, the proliferation of smartphones, convenience of online shopping and increasing digitisation of payments. The overall Indian retail market was pegged at $820 billion (Rs 69 lakh crore) in 2023, according to a report published by the Boston Consulting Group and the Retailers Association of India. E-commerce still comprises only about 7 per cent of that, as per Invest India.
The Indian e-commerce market is dominated by global giants, including Amazon and Walmart (which took over Flipkart in 2018). They, along with domestic players, offer huge discounted prices compared to retail prices, which drives online sales significantly. In FY23, Amazon Seller Services and Flipkart posted Rs 4,854 crore and Rs 4,891 crore losses, respectively. Goyal’s argument is that these losses are due to their predatory pricing.
“Is predatory pricing policy good for the country?” Goyal asked, while stressing the need for a balanced evaluation of e-commerce’s effects, particularly on traditional retailers such as restaurants, pharmacies and local stores. “I’m not wishing away ecommerce—it’s there to stay,” he said. Later, he said e-commerce uses technology that aids convenience. But there are 100 million small retailers whose livelihood depends on their businesses.
The Centre has specific laws that permit foreign direct investment (FDI) in e-commerce exclusively for business-to-business (B2B) transactions. However, according to Goyal, these laws have not been followed entirely in letter and spirit. Currently, India does not allow FDI in the inventory-based model of e-commerce, where e-commerce entities own and directly sell goods and services to consumers (B2C). FDI is permitted only in firms operating through a marketplace model, where an e-commerce entity provides a platform on a digital or electronic network to facilitate transactions between buyers and sellers (B2B).
The country’s laws also stipulate that in marketplace models, e-commerce entities cannot ‘directly or indirectly influence the sale price of goods or services’ and must maintain a ‘level playing field’. Entities in the marketplace model re allowed to transact with sellers registered on their platform on a B2B basis. However, each seller or its group company is not permitted to sell more than 25 per cent of the total sales of the marketplace model entity.
Goyal said certain structures have been created to suit large e-commerce players with “deep pockets”. Algorithms have been used to drive consumer choice and preference. For instance, several pharmacies have disappeared, he said, and a few large chains are dominating the retail space. He invoked the importance of platforms like the Open Network for Digital Commerce where small businesses can sell their products.
E-commerce firms counter the argument on predatory pricing. “It is the sellers’ discretion as to what price they should sell at,” says an industry source. The e-commerce player who provides the platform seldom has a role in it, he explains. “Sellers could be doing clearance sales or liquidation of old products at cheaper prices. Some sellers also source products at manufacturing cost and park it with e-commerce firms instead of involving warehousing agents. This helps cut their overhead costs and allows them to offer lower prices on the platform,” he adds.
Some experts are of the view that the government should not step in with controls and allow the market forces to play their role in determining prices. Price controls may lead to shortages, inferior product quality and the rise of illegal markets. Moreover, the Competition Commission of India (CCI), which is mandated to act against monopolies, may be given more teeth. It is ironical that, on the one hand, the Centre wants more FDI to flow in, but places more and more controls on foreign players on the other hand. At the core are the interests of small traders and retailers, a key section of the electorate.
Others argue that the government has a role to ensure that there is fair competition. “It is not just small retailers the government would be speaking for, but for large domestic players too,” says Devangshu Dutta, founder of consultancy firm Third Eyesight, emphasising that the government’s role should be to establish laws and practices that promote fairness.
According to him, it is no secret that e-commerce has grown through discounts. “For large e-commerce firms, market acquisition happens by acquiring a share of the consumer’s mind and through pricing. When a large sum is spent on advertisements, it is for acquiring the mind share of the consumer,” he says. “Pricing matters in a big way too. Whether you call it predatory pricing or market acquisition pricing depends on which side of the fence you are.”
(This article was originally published in the India Today edition dated September 9, 2024)
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May 24, 2023
Shambhavi Anand, Economic Times
New Delhi, May 24, 2023
Retailers and shopkeepers will soon not be allowed to seek phone numbers of their customers while generating bills, according to a diktat by the department of consumer affairs, a senior government official said.
Taking the numbers of customers without their “express consent” is a breach and encroachment of privacy, said the official, without wanting to be identified.
The official added that such a move will be classified as an unfair trading practice defined as any business practice or act that is deceptive, fraudulent, or causes injury to a consumer.
Most large retailers mandatorily take down buyers’ phone numbers while generating the bill for their purchases and use them for loyalty programmes or sending push messages.
The move has come after the department received several complaints from consumers about retailers insisting on getting their phone numbers. This will be communicated to all retailers through industry bodies representing retailers soon, the official added.
While the implementation of these new rules may require some adjustments and initial costs for retailers, it is seen as a necessary step towards protecting consumer privacy and ensuring fair business practices in the retail sector, said experts.
While retailers will have to rework their systems in case this becomes a regulation, this won’t stop them from asking for phone numbers of consumers as their loyalty programmes run on these numbers, said Devangshu Dutta, founder of Third Eyesight, a retail consultancy firm.
He added that retailers also use numbers for sending e-invoices and so this could have a cost impact and environmental impact.
(Published in Economic Times)
