KELLOGG INDIA
Background
With projected annual sales of over US$ 9 billion,
Kellogg Company, USA, is the world’s leading
producer of cereal and convenience foods. Founded
and headquartered in Battle Creek, Michigan, Kellogg
Company manufactures products in 19 countries and
markets products in more than 160 countries around
the world.
Kellogg India is a 100 per cent subsidiary of Kellogg’s
Company, USA, and is the largest player in the Indian
breakfast cereal market. Kellogg India has over 100
employees and has invested over US$ 30 million.
Transforming the Indian breakfast
cereal market
When Kellogg Company entered India, the per capita
consumption of breakfast cereals was a low 2 gm
per annum against 5 kg per annum globally. The Indian
ready-to-eat-cereal market, clearly, posed several
challenges:
• Cultural factors and eating habits – population
not used to processed foods
• Easy availability of low-priced traditional breakfast
• Low awareness about processed foods and
calorie requirements
• Price sensitive customers
Kellogg India has been steadily overcoming these and
has contributed to the rapid growth of the breakfast
cereal market in the country.
Factors for success
Innovative marketing and brand-building
Kellogg India has been taking various initiatives to
overcome the low awareness of breakfast cereals:
• Sustained brand-building through advertising and
investment behind key brands.
• Introducing a limited edition Kellogg’s Chocos
Spider Man 2 “web designed cereal” which is part
of the global association between Kellogg Company
and the movie Spider Man 2
• Conducting school contact programmes and having
active interface with opinion leaders – CFTRI, the
government, independent agencies etc.
• Adopting brand names that appeal to the Indian
consumer such as ‘Shakti’, meaning power
• Using packaging as an effective marketing tool, for
brand communication and on-shelf differentiation
• Image building through recycling and reusing,
improving access to health and human services in
local communities. Kellogg’s works with
organisations and programs with proven results
that improve lives around the country
Efficient supply chain network
Price sensitive customers necessitated a constant focus
on cost reduction and supply chain efficiency
enhancement in India. Kellogg India has taken several
initiatives in this area:
• Localised the entire raw and packing material
requirement, saving import duty. In addition it has
adopted single sourcing strategy achieving scale
efficiencies
• Located its manufacturing plant at Taloja, near
Mumbai in the state of Maharashtra, which is the
largest market for breakfast cereals in the country
thereby optimising transportation cost
• Set up a distribution network with storage hubs
in all the key states of the country (18 clearing
and forwarding agents) serving over 200 Future plans
distributors providing a good reach Kellogg Company views India as a very important
• Optimising overheads by giving distributors larger market with a great future. Taking a longer-term
responsibility for sales, thus bringing down the perspective, Kellogg India is planning to continue its
strength of its internal sales force investment in communication of categories and brands
to grow the breakfast cereal market.
• Deploying Oracle 11i based ERP to enhance supply
chain transparency leading to lesser inventories
and better service levels. Other locally developed
systems help monitor stocks and movement on a
daily basis.
Customising products for India
Over time Kellogg India has widened its product
portfolio and expanded its range to include Frosties,
chocolate-flavoured scoops and taste variants of Corn
Flakes. Kellogg India also adapted its products to
address the local need gaps. For example it enhanced
its focus on iron and calcium fortification with
products like Iron Shakti (meaning iron power) and
Calcium Shakti.
Kellogg India: AT A GLANCE
Strong support from parent
• Kellogg India: Largest player in the breakfast
Kellogg India receives technology inputs (in customising cereals market. 100 employees. Investments
products to suit the Indian nutritional profile, of over US$ 30 million
developing packing material for India, manufacturing
• Factors for success: Innovative marketing and
process etc.) from its parent. Within the larger
brand-building. Efficient supply chain network.
management and strategic framework, Kellogg India
Customising products for India. Strong
has the flexibility to adapt its operational strategy
support from parent
suited to the local environment.
• For Kellogg, India is: A source for managerial
Leveraging the India Advantage talent and an important market
Kellogg India has been leveraging Indian managerial • Future plans, India: To continue its investment
talent by moving Indian managers to other countries. drive to grow the Indian breakfast cereal
The Indian team also manages neighbouring countries market
like Sri Lanka, Bangladesh and Nepal.
US COMPANIES IN INDIA