7/29/2021 ‘Fibre-rich diet is gaining acceptance’ - The Economic Times

English Edition | 29 July, 2021, 09:55 PM IST | E-Paper

‘Fibre-rich diet is gaining acceptance’

Synopsis
THOUGH idli-parantha lovers may find it hard to believe, health conscious middle India is now beginning to add more fibre to its diet. And
loving it, by all appearances. As Shyam Bagri of Bagrrys India Ltd tells Nidhi Nath Srinivas, smaller families, working women and more
westernised eating habits are the three pillars on which the breakfast cereals sector is pegging its hopes.

THOUGH idli-parantha lovers may find it hard to believe, health conscious middle India is now beginning to add more
fibre to its diet. And loving it, by all appearances. As Shyam Bagri of Bagrrys India Ltd tells Nidhi Nath Srinivas, smaller
families, working women and more westernised eating habits are the three pillars on which the breakfast cereals sector
is pegging its hopes. What is the size of the organised breakfast cereal market? The only major Indian players in this
market are Mohun’s Corn Flakes, HVOC’s Champion Corn Flakes and Oats, and Bagrrys’ Oats and Muesli
apart from MNC Kellog’s. These are some of the corporates who have an all-India presence. All the rest are either on
the state or town level. This is why it is very difficult to give an approximation of the size of the organised Indian
breakfast cereal market. What is the country’s biggest market for breakfast cereals? South India, especially Kerala
is one of the biggest market for breakfast cereals. The reason is the high level of education and almost 100 per cent
literacy rate. Perhaps the large number of families with NRIs is also a reason for acceptance of breakfast cereals. What
are the biggest barriers to entry for other players? We suppose the main reason for few players in this sector is because
the investment required is big but the returns are not commensurate with costs. Moreover, though all the raw material
going into muesli (grains, honey, almonds, raisins) are agricultural products, they are subject to heavy central excise duty
and sales tax. Breakfast habits of Indians vary too from place to place and traditional foods are the biggest barrier for
breakfast cereals. But as more women start working, convenience foods are gaining acceptance. People have also started
understanding the concept of fibre and its importance in good health. While corn flakes and dalia have been around
for a while, oats and other whole cereals are still new to most Indians. What has been their acceptance rate?
Acceptance rate of oats has shown a slow but steady increase over the last few years. In fact, Champion Oats have been
accepted now for the last 40 years while Bagrrys has also been around for the last 10 years. Acceptance of muesli is also
growing because muesli is high in fibre. Do you think breakfast cereals would become more popular if they were a
little cheaper? Yes that is true. But the other side of the coin is the high marketing and manufacturing costs, which add
to the ex-factory cost. Heavy central excise duties and sales tax levied on these agriculture based products also add to
costs. What made you decide to introduce White Oats as a breakfast cereal? I realised through various articles,
newspapers, magazines and books the importance of fibre in daily diet. I also felt that high fibre, wholesome breakfast
cereals are not available in the Indian market. We started with Wheat Bran. Though the economics were not at all
encouraging, appreciation of the people who ate our Wheat Bran motivated us to continue. Alongwith Wheat Bran, we
introduced White Oats: they are the best source of soluble fibre. We also made Oat Bran out of it. Is there a potential for
export of breakfast cereals from India in markets other than the Middle East? Export of new breakfast cereals from
India is negligible. In fact, after liberalisation, we see good breakfast cereals are being imported into India. As MNCs have
been unable to make a profit in India’s breakfast cereal market, do you think local brands have a better chance
of success? Local brands have lower infrastructure costs and can, therefore, at least keep themselves afloat in these
competitive conditions. Moreover, though MNCs may be making losses initially, they are investing in the future of their
brand. The returns will come eventually.

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