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'Catering to the palate of Indian consumers'

Monday, June 12, 2017

Amit Kumat, MD & CEO, Prataap Snacks

Amitk Kumat who is currently the MD & CEO of Prataap Snacks Ltd. worked with a packaged food company during the start of his career. While working at the company he absorbed understanding of strategic distribution and wholesale networking. Being the Promoter, he has been associated with the company since its incorporation. He holds a master’s degree in science from the University of Southwestern Louisiana. In conversation with Dominic Rebello, Amit who has over 21 years of experience in snack foods industry, believes there are just two right ways into a customer's shopping basket—taste and value.

Tell us a few words about yourself and your business?
After completing my Graduation from University of Southwestern Louisiana, I worked with a packaged food company to understand the strategic distribution and wholesale networking. In year 2003, we (me, my elder brother Apoorva Kumat and our friend Arvind Mehta) decided to enter into the stream of salty snacks market and established Prakaash Snacks which was later  merged with Prataap Snacks. We started our business in a compact size room with minimum machinery.
The company launched the first product ‘Blow Fun’ cheese balls in Northern and Southern India and in the first year of its launch, we earned satisfactory profit of Rs. 22 lakh. We then decided to expand our product line by introducing potato wafers, Extruded snacks, namkeen etc.

The brand Yellow Diamond emerged in the year 2005. Today, the brand encompasses 25 flavours of Chips and Extruded Snacks; and 23 varieties of Namkeen in the market. We are present in three major savoury snack food categories in India and all our products are sold under the Yellow Diamond brand. This diversified product portfolio enables the company to cater to a wide range of taste preferences and consumer segments, including adults and children. Some of the most relished and demanded products from the company’s portfolio include potato chips, the Motu Patlu rings and tangy snack Chulbule.

As per the FS report, Prataap Snacks became one of the top six Indian snack food companies in terms of revenues in 2015, and among the fastest growing companies in the Indian organised snack market between 2010 and 2015. Seeing the growth and acceptance of the brand in major parts of India, the company decided to increase its brand recall by focusing on mass advertising. In 2016, Prataap Snacks signed  Bollywood star Salman Khan as their brand ambassador for a period of two years and launched their new campaign “Dildaar Hai Hum”.

What is the latest trend in the Snacks industry?
With income to spend, being upwardly mobile, and influenced by taste trends, the Indian middle class is consuming more food, especially packaged foods, while experimenting with tastes, cuisines, flavours, and products. Companies have based their strategy on these behavioural traits of the middle class. Packaged foods include ready-to-eat/cook foods that are packed and sold to consumers. It includes food items like bakery products, canned / dried processed food, frozen processed food, meal replacement products, dairy products, snacks, confectionaries, beverages, etc.

Any expansion plans?
We own and operate three manufacturing facilities across India - one located at Indore, Madhya Pradesh and the other two are at Guwahati, Assam. In addition, we also engage two facilities on contract manufacturing basis, one located in Bengaluru, Karnataka and other one in Kolkata, West Bengal. We intend to expand our production capabilities to aid our efforts to deepen our pan-India presence. So as to cater to the increased demand, we intend to use part of the net proceeds towards expansion and modernization of our manufacturing facilities, specifically at our Indore manufacturing facility. At our Indore manufacturing facility we intend expand the production lines for Chips and Namkeen. We intend to undertake some expansions and modernizations in our existing machinery, replacing our existing Chulbule and Chips manufacturing machinery at Indore with newer and more advanced machinery.

How are you different from others?
We believe that our ability to identify market trends and develop new flavours catering to the palate of Indian consumers are significant factors that have contributed to the growth of our business.

We seek to differentiate ourselves from our competitors through introduction of new products, including launching innovative flavours targeted at addressing consumer taste, market trends and providing superior value to consumers. Our diversified product portfolio enables us to cater to a wide range of taste preferences and consumer segments, including adults and children. Our products in the Extruded Snacks category are primarily targeted at the youth and children while our Potato Chips and Namkeen category of snacks are for all consumer segments. Our diversified product portfolio is therefore, relatively less susceptible to shifts in consumer preferences, market trends and risks of operating in a particular product segment. Our brand philosophy emphasises delivery of maximum value to consumers, as reflected by the regular introduction of new flavours, relatively high per pack weight to volume ratio for our products, and inclusion of promotional items such as toys.

Where do you see yourself five years down the road?
According to Frost & Sullivan (“FS Report”), we were one of the top six Indian snack food companies in terms of revenues in 2015, and among the fastest growing companies in the Indian organised snack market between 2010 and 2015. In the coming years, our focus is on growth of the company in terms of increasing the production capacities, expansion of product portfolio and exploring global markets.

We own and operate three manufacturing facilities across India and intend to expand production capabilities and undertake modernization of our manufacturing facilities to aid efforts to deepen our pan-India presence.

Further, there is an increasing trend towards modern retail trade in the urban markets due to the availability of multiple brands and varieties, offers and discounts, and the option to purchase all products under one roof. To increase visibility and build the Yellow Diamond brand in our existing markets, we intend to focus on sale of our products to such premium outlets. Hypermarkets and supermarkets usually stock larger size SKUs. Our focus on this category of retail outlets would allow us to increase the sale of larger size SKUs.

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