Place strategy

From chilling reception to prepping makeup, how Kellogg found her place on the Indian breakfast table

New Delhi: Last August, global food maker Kellogg’s began locally manufacturing one of its most sought-after products in India: rainbow-colored cornflakes called “Froot Loops.” Indian customers were overjoyed, as the price of a box now stood at Rs 175, instead of the previously imported boxes which sold for one “impious“Rs 850.

Kellogg’s, started by American industrialist WK Kellogg at the turn of the 20th century, is one of a handful of packaged food companies that have seen demand surge during the pandemic as at-home consumption has steadily increased and meals dining out were less of an option.

According to Sumit Mathur, Marketing Director, Kellogg South Asia, sales in the breakfast cereal category increased 30% for Kellogg India in the first half of 2021, compared to business in the same period of 2020.

Many in India who grew up in the new millennium have fond memories of breakfast cereals.

“As a child, I was always happy to see Chocos on the shelves of a grocery store. I always begged my parents to buy it,” 26-year-old food blogger Stibin Raphel, who runs an Instagram page called The Indian Food Blogger.

“When I was in college, Kellogg’s sold some products in smaller, more affordable packages instead of large boxes. I ended up looking for these little packets of Chocos and Strawberry Cornflakes as midday snacks that didn’t even necessarily require milk,” he added.

For Sonali Mirpuri, a 23-year-old visual designer and social media specialist based in Bengaluru, it was a big motivation on school days. “I woke up very early on school days, knowing that Chocos or Frosted Flakes were waiting on the breakfast table. I would sometimes mix them in the same bowl,” she told ThePrint.

But although Kellogg’s today invokes deep nostalgia among many Indians, the cereal giant, which turned 116 on Saturday, didn’t exactly start out as a hit in the country.

When it entered India in 1994, the company assumed that capturing just 2% of India’s huge market would generate more revenue than the entire US market. But a year later, it had captured less than 0.01% of India’s 95 crore potential customers.

Prepared meals for Americans

Cornflakes were invented as a healthy, bland cereal in 1894 in Battle Creek, Michigan by American physician John Harvey Kellogg. In 1906, his younger brother, Will Keith Kellogg, figured out how to market his creation and founded the Kellogg Company.

John Harvey wanted cornflakes to be a health food that would aid Americans’ digestion at a time when everything from meat, pie and potatoes were part of a standard breakfast in 19th century America. , explains a Forbes report.

However, it wasn’t for health reasons that Kellogg’s cornflakes became a hit, especially since the product ended up being pre-coated in sugar. Rather, it was a convenient “ready-to-eat” option in the morning, at a time when the industrial revolution had taken people out of farms and factories, with less time to spend in the kitchen.

Kellogg’s was able to identify local strategies, health and otherwise, and keep a pulse on consumer preferences in its home country, but failed to do the same in India. At least, initially.

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Indians prefer hot food

By the 1990s, Kellogg’s was present in nearly 150 countries and was the market leader in its home country, with $3.8 billion in sales and a 40% share of the U.S. cereal market. ready to eat. However, its sales in the United States were stagnant, according to a case study report published by Hyderabad-based IBS Center for Management Research.

In 1994, the grain giant opened its first manufacturing plant in India in Mumbai. It launched its first product, corn flakes, as well as custom products such as basmati rice flakes and wheat flakes.

Despite offering quality products and utilizing an abundance of technical and managerial resources from its parent company, Kellogg’s sales were suffering in the Indian market. In 1995, it was estimated that for every 100 packets sold, two were purchased by regular customers, the others being new customers.

“The main reason they didn’t succeed at first was because of Indian food and cultural habits. They offered a bland cereal to mix with cold milk, but Indians preferred something hot in the morning,” Shweta Jha, a PhD student in marketing at IIM Indore and a former research associate at the Indian Institute of foreign trade (IIFT).

“What Kellogg’s also failed to take into account was that there was a diversity of eating habits in India – in the North paranthas and puris were preferred, and in the South it was was the idli and the vadas,” she added.

This view was also shared by Homi Bhabha, an Indian English scholar who is a professor of humanities at Harvard University – not to be confused with the nuclear scientist of the same name.

“Indians, much like the Chinese, think that starting the day with something cold, like cold milk on your cereal, is a shock to the system,” he argued in a 2005 magazine article, adding that anthropology plays an essential role. in business studies.

Interestingly, Kellogg’s was not the first brand to introduce cornflakes to the Indian market – credit goes to Mohan Meakin Ltd in 1963. When Kellogg’s first debuted here, there was a significant price difference between its product and those of its local rival, which made it even more difficult for Kellogg’s to find its footing in the Indian market – a 500g packet of Mohan cornflakes retailed at Rs 37, while a Kellogg’s packet cost almost double, Rs 64.

It was towards the end of the 1990s that Kellogg’s overtook Mohan Meakin to become the number one cornflake seller in India, representing approximately 35% of the market.

turn the tide

In his research article on Kellogg’s published by Elk Asia Pacific Journal in 2016, Jha explained that one of the ways Kellogg’s conquered the Indian market was by tweaking its television commercials, which previously claimed that Indian foods were not nutritious and therefore “sent the wrong message to Indian consumers”.

She explained that the new ads focused on storylines relating to Indian culture such as the “selfless” relationship between mother and child. He also used catchy slogans like “Jago jaise bhi, lo hi from Kellogg (No matter how you wake up, only have Kellogg’s for breakfast)”, “Khusiyon bhari har subah (Mornings filled with happiness every day)” and “Breakfast full of fun”.

When asked if the rebrand was the main reason for Kellogg’s return to India, Jha disagreed. “There were different factors. They had also tweaked their product to suit Indian taste buds and made some taste adjustments,” she said.

“They also tried to create a change in behavior, which was accompanied by the growing effects of India’s economic liberalization in 1991. There was more job creation and disposable income, and more cultural exchanges under the aegis of globalization,” she added.

The company also decided to switch to flavors such as mango and banana puree based on local tastes, and sold products fortified with iron and calcium, using the word Shakti (“power”) in its slogans. Its Chocos and Frosties brands, launched in 1996 and 1997 respectively, were particularly popular with children and still are.

Last September, billionaire and Mahindra Group chairman Anand Mahindra shared a meme about how Kellogg’s has now come full circle by launching ready-to-eat “Upma” packets – exactly the kind of hot breakfast that threatened once his success in India.

(Editing by Poulomi Banerjee)

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