Work from Home Curriculum CASE STUDY SBUP

CORNITOS NACHO CRISPS

Seated behind a sprawling desk at his office in Faridabad, Vikram Agarwal dwells into his
Mexican affair. “We have always travelled a lot to the US for business reasons. I was a big fan of
Doritos," he says. The love towards Doritos in USA prompted him to launch the desi version of
the tortilla crisps in India and named it as Cornitos. This brand spread its wings very fast and
became an instant hit in the Indian Market, as the consumers were experiencing a brand new
style of snack for the first time. The brand grew by leaps and bounds Mr. Agarwal started
exporting to the nearby countries mostly, the emerging economies like Australia, China,
Singapore, UAE, Saudi Arabia, Maldives, Hong Kong, Nepal, Sri Lanka, Pakistan, Taiwan,
Thailand. The brand was also launched in USA for the NRI population. Along with Mr. Mallick
the founder of Brandvak, the Bengaluru based company that reworked on branding and
packaging strategies,

Mr. Agarwal has ambitious plans to export Cornitos brand now to the G-7 Countries – the elite
highly developed Nations. These markets are notorious for high quality products, with superior
packaging and high expectations on taste. Moreover, the perception of these brands originating
from emerging countries like India may be a turn – off for some consumers. That’s the cause of
concern for Mr. Agarwal. The company is planning to launch the Cornitos brand in the year 2021
after the Covid-19 pandemic will subside and the World will get back to normal. But the
perception of the emerging country will still linger on the advanced nations mindset. How will
Cornitos overcome this perception will be an interesting story to wait for in the year 2021 ?
Work from Home Curriculum CASE STUDY SBUP

The Indian Snacks Market:

According to industry estimates, the snack food market in India is pegged at Rs 15,000 crore,
while traditional namkeen is around Rs 5,200 crore. The size of the nacho crisps category is
estimated at Rs 32 - 35 crores in the organised sector. Because of low penetration levels and per
capita consumption in India, nacho crisps will take a while to scale up, say industry insiders. The
market leaders in the snacks industry are companies like Haldirams, Parle, ITC, Frito Lays
(Pepsi subsidiary) Cavin Kare and other regional players like Bikaji, Bikaner etc who are strong
contenders to grab the pie in this market. There is a clear demarcation between the Western
snacks and Indian snacks in the Market.

In the Nacho’s category, Cornitos has the first mover advantage in the Indian Market, followed
by ITC’s Mad Angles, Pepsi’s Doritos, El Sabros (Mumbai based start-up) However, the
problem with the Indian customers is the consumer adoption process, it takes a while to get
accustomed for a particular product. The lack of experimentation and high price points are a big
deterrent for the Nacho’s category as a whole in India.

The Humble Beginnings:

First company to launch Nacho Crisps (Tortilla) in Indian branded snack food market.
GHFPL(Greendot Health Foods Pvt Ltd) has fully automated, state-of-the-art food
manufacturing plant at state-of-the-art food manufacturing facilities at Roorkee, Uttarakhand,
India. Greendot Health Foods Pvt Ltd is a growing FMCG company and part of the well-known
Globe Group, a 30 million US$ venture. It entered into Indian snacks market in 2009 with its
brand Cornitos - Nacho Crisps, which is a perfect in-between-meals snack. It combines the
health benefits of Corn in Exotic flavours. Cornitos Nacho Crisps are Gluten Free. Cooked in
Corn Oil , Zero Trans-fat, Zero Cholesterol Healthy Snack. GHFPL honors quality in every
aspect and is professionally managed. Manufacturing is done in environmental friendly premises
and hygienic conditions. GHFPL is an ISO-22000, Halal and BRC certified company with
FSSAI and US FDA registration.
Work from Home Curriculum CASE STUDY SBUP

For Vikram Agarwal, a bite of Doritos was all it took to give up on selling electrical capacitors
and start making nachos In June 2008, Vikram Agarwal was on a visit to a tortilla crisps plant in
the US, a few miles from the city of Chicago. The plant allowed visitors to catch the making of
Doritos crisps, a brand owned by Frito-Lay Inc., a subsidiary of food and beverage company
PepsiCo Inc. Agarwal spent an hour keenly watching every step of the process: the cooking of
corn kernels, the grinding of the corn into a dough-like paste, the slicing of the dough into
triangles, the baking, the seasoning and eventual packing of the crisps.

He walked out of the plant and finalized a deal with local manufacturers to ship crisp-making
equipment to New Delhi, 8,000 miles away. In 2009, Agarwal set up Greendot Health Foods Ltd
in Faridabad with one and only one purpose: give well-travelled Indians a Mexican snack with
an Indian twist. Six years and eight flavours later, Agarwal’s Cornitos have established a
foothold in India’s Rs15,000 crore snacking market. The brown and yellow packs are ubiquitous
on shop shelves across major food and grocery stores in over 200 cities. Greendot clocked
revenue of Rs24 crore in the year ended 31 March 2014.

But Agarwal, now 45, did not always sell chips. After graduating with a degree in commerce
from Shaheed Bhagat Singh College in south Delhi, he joined the three-decade-old family
business—the Rs100 crore Globe Group, which supplies electrical equipment such as capacitors
to large electronics companies the world over. Agarwal spent a decade sitting through endless
meetings with clients from Thailand and West Asia, haggling over orders for capacitors. All his
travels abroad were also with the express purpose of engaging with potential or actual customers.
“There was no challenge in what I was doing," recalls Agarwal, adding, “Everything was laid out
for me and the opportunity to do something new was very, very limited."

In the mid-2000s, he toyed with the idea of manufacturing bio-degradable carry bags, the year
the Delhi government imposed a ban on the use of plastic bags. “My father and I met a few
companies but realized the volumes were not enough," he says. And so the idea was junked.
Work from Home Curriculum CASE STUDY SBUP

The Plunge :

Agarwal was a big fan of Doritos, on one such trip in 2008, an idea struck him: why not replicate
Doritos in India ? Back home, Agarwal bounced the idea off his father, who gave him his
blessing in double-quick time. His father’s support, recalls Agarwal, was overwhelming. “I
wouldn’t have been able to do it without his backing," he adds. He spent the next few months
studying the market. Companies such as Kolkata-based conglomerate ITC Ltd, PepsiCo and
several others were already well entrenched, offering a wide range of snack choices. He met food
experts, set up market visits, met distributors, devoured thick research reports and even set up
meetings with manufacturers in the US.

“We did a year of research, and it involved a lot of learning for us to understand this product,
especially since it has a lot of technological involvement," he says. There were also hurdles to be
overcome. “For instance, getting quality corn is a big challenge in India." So he enlisted contract
farmers to help him procure the raw material locally. Agarwal didn’t stop at that. He roped in
California-based equipment manufacturer, JC Ford Co., to share its know-how. The company
supplies equipment to make Doritos. In 2009, in the town of Roorkee, near Haridwar, with an
initial investment of Rs25 crore, a 6,000 sq. ft fully automated plant was set up. In the initial
days, Agarwal spent nights in Roorkee, taking up accommodation close to the plant.

In May 2009, Cornitos was launched at Hotel Claridges, Surajkund, with flavours such as tikka
masala, tomato, sea salt and jalapeno. Agarwal says that while regular potato chips have a four-
month shelf life, Cornitos has a shelf life of six months. "It is 100 per cent corn snack, gluten-
free, has zero cholesterol and trans fats, and contains up to 40 per cent less oil than regular potato
chips. The sale of Cornitos nachos is growing as there's a growing demand for 'in-between-
meals' snack. Adopting healthy snacking is important and we will continue to keep offering such
healthy choices in the future as well." says Agarwal, who picked the name 'GreenDot' as it
symbolises vegetarianism
.
Work from Home Curriculum CASE STUDY SBUP

Cornitos, which has a pan-India presence, is available across major FMCG stores such as
Foodhall, Spencer's, Easyday, Carrefour, More, Hypercity, Auchan, Big Bazaar, etc. It has tied
up with SpiceJet, Jet Airways, IndiGo, and is in talks with more airlines. It is also present in
major multiplexes, airports and in Café Coffee Day outlets. Cornitos products are exported
globally, to the US, China, Nepal, Singapore, Nigeria, Ghana and Sri Lanka. "We will soon be
launching our products in Thailand, Korea and Bangladesh," says Agarwal, who wants to create
a benchmark in the snack market, both nationally and internationally, by delivering new
innovative products to the consumer.

Equipped with a fully automated state-of-the-art food processing unit in a hygienic

manufacturing environment, the Cornitos team is committed to providing quality products to its
customers. The manufacturing facility is spread over an area of 6,000 sq. metres at Roorkee in
Haridwar district, Uttarakhand. It has an annual production capacity of 1,800 tonne, which
Agarwal aims to double next year with an additional line to meet the growing demand.

Agarwal says he spends 10 to 15 per cent of the sales on advertising the product. Though tortilla
chips are a product of the western markets, the company has launched nine flavours, more than
any other chips brand, that suit the Indian palate very well. These include Barbeque, Wasabi,
Tikka Masala, Thai Sweet Chilli, Sea Salt, Tomato Mexicana, Lime N' Mint, Cheese and Herbs,
and Sizzling Jalapeno. Cornitos product range -- priced between Rs 15 (30 gms) and Rs 85 (150
gms) -- also includes delectable salsa n cheese dips gherkins, jalapeno and relish for toppings.

Agarwal says that while regular potato chips have a four-month shelf life, Cornitos has a shelf
life of six months. "It is 100 per cent corn snack, gluten-free, has zero cholesterol and trans fats,
and contains up to 40 per cent less oil than regular potato chips. The sale of Cornitos nachos is
growing as there's a growing demand for 'in-between-meals' snack. Adopting healthy snacking is
important and we will continue to keep offering such healthy choices in the future as well." says
Agarwal, who picked the name 'GreenDot' as it symbolises vegetarianism.
Work from Home Curriculum CASE STUDY SBUP

The Product & Pricing Strategy :

Agarwal says he spends 10 to 15 per cent of the sales on advertising the product. Though tortilla
chips are a product of the western markets, the company has launched nine flavours, more than
any other chips brand, that suit the Indian palate very well. These include Barbeque, Wasabi,
Tikka Masala, Thai Sweet Chilli, Sea Salt, Tomato Mexicana, Lime N' Mint, Cheese and Herbs,
and Sizzling Jalapeno. Cornitos product range -- priced between Rs 15 (30 gms) and Rs 85 (150
gms) -- also includes delectable salsa n cheese dips gherkins, jalapeno and relish for toppings.
Cornitos was initially launched at Rs25 a packet. This when the Indian snacking market thrived
in the Rs5-10 pack bracket. “So-called food experts tried to dissuade me on the price point," he
says, but he stood his ground.

Distribution & Retail Strategy :

Cornitos has an extensive distribution network across Pan India. Complete Range of Products
available in Retail, E-Retail and Modern Trade stores. Institutional sales across through Airlines,
Horeca, Multiplexes and Cafes. Cornitos, which has a pan-India presence, is available across
major FMCG stores such as Foodhall, Spencer's, Easyday, Carrefour, More, Hypercity, Auchan,
Big Bazaar, etc. It has tied up with SpiceJet, Jet Airways, IndiGo, and is in talks with more
airlines. It is also present in major multiplexes, airports and in Café Coffee Day outlets.
Cornitos products are exported globally, to the US, China, Nepal, Singapore, Nigeria, Ghana and
Sri Lanka. "We will soon be launching our products in Thailand, Korea and Bangladesh," says
Agarwal, who wants to create a benchmark in the snack market, both nationally and
internationally, by delivering new innovative products to the consumer.

Failed Strategy :

Agarwal came into the snacking market with one thing very clear—no following fads. “I never
wanted to make a me-too product. I always wanted to stand out and not follow multinationals,"
he says. Even though Agarwal worked extensively on creating the distribution network and
Work from Home Curriculum CASE STUDY SBUP

marketing associations for the brand (he tied up with airlines and movie halls, among others), the
results were not encouraging. “Distribution was a big challenge," recalls Agarwal.
By 2011, Cornitos was available in 50 cities and 5,000 outlets. But the country was awash with
similar brands such as Senor Pepito (by Mumbai-based Venkataramana Food Specialties Ltd)
and Salsalito (by Chennai-based AVT Gavia Foods Ltd). Despite hefty investments and top-
notch technology, things weren’t going the way Agarwal had envisaged. With shelf take-offs
stagnating, the branding was deemed to be confusing and unattractive. Cornitos was witnessing a
fate similar to that of its inspiration, Doritos, which in the mid-1990s failed to generate adequate
revenue for its parent Frito-Lay.

In what was then one of the costliest brand revamps, Frito-Lay redesigned Doritos to make it
20% larger and 15% thinner, with stronger flavours, according to an article in The New York
Times. The company spent over two years and $50 million testing the new product across 5,000
consumers, before relaunching it. Agarwal was set an ultimatum by his father. “I was told that I
had six months to review and revamp the brand or exit the business," he said.

Course Correction :

Agarwal got cracking. Eighteen months after it was started, the Delhi-based marketing agency
working for Greendot was fired and a Bengaluru-based start-up, Brandvak, was given the task.
Bijitesh Mallik, a consumer insights expert, had just quit RAAMS India, a shopper marketing
company, and branched out on his own. He started Brandvak in July 2012. A month later, at a
distributor’s office, Agarwal and Mallik were discussing the future of Cornitos. The meeting
lasted over two hours. Mallik says he had never heard of the brand before then. “But when I
bought the product, it was fantastic," he recalls.

Mallik went back to the market for a small product survey. “We saw that shoppers were looking
at the product but it wasn’t moving. Brand perception was missing," he says. Over the next three
months, Brandvak worked as an extended marketing arm for Agarwal. The duo played on the
instinct that there was an existing market for the product but the branding needed to be altered.
Work from Home Curriculum CASE STUDY SBUP

For starters, the packaging was changed and glossy gave way to matte-finish packs. The logo,
colour scheme (now brown and yellow) and font were also changed to make it look like an
international product. Packaging costs went up 30% and the price of the 60g pack was raised to
Rs35. The word “chips" was replaced by “crisps". “We wanted to create a new category and not
play in the existing one of chips," says Agarwal.

Brandvak expanded Greendot’s channel partnerships, making it more accessible to modem trade
outlets such as Future Group-promoted Food Hall and Godrej’s Nature’s Basket. “It was a
gamble, but Vikram had a lot of faith in his product," says Mallik. Cornitos packets were placed
in aisles dominated by imported counterparts such as Doritos and El Sabros. “It worked, since we
were cheaper compared to those brands," says Mallik. Agarwal spent Rs 30 lakh on the revamp,
the results of which were clear in three months. “My father was quite convinced with the
numbers," he adds.

Consumers gave the strategy full marks. “They are stocked alongside international brands as the
brand perception is very international. But when you read the fine print, it is priced much lower,"
says a food and beverage head at a national gourmet chain, who declined to be named. By the
end of the relaunch, the company’s reach and distribution had gone up dramatically. Cornitos is
currently retailed across 25,000 outlets in 200 cities. The product is now available in airlines
such as IndiGo and Air Asia and cinema chains such as SRS, Inox, PVR and DT. It has also
made headway in institutional sales with companies such as Jubilant FoodWorks, which
manages pizza chain Domino’s, as well as local Mexican restaurants stocking its tortilla crisps
and related condiments.

Despite shop shelves overflowing with nacho variants, Cornitos has created a niche for itself.
“Cornitos has changed the way India eats premium nachos," says Amit Lohani, director at Delhi-
based food import company Max Foods. “The brand has penetrated traditional retail and built
strong institutional sales," he adds.But Cornitos continues to face a potential threat from the
original: Doritos. Given PepsiCo’s ambitious plans for the Indian market, a Doritos launch could
affect Cornitos.
Work from Home Curriculum CASE STUDY SBUP

“While Cornitos has been smart to get the product into the market way before PepsiCo could, the
moment Pepsi decides to launch Doritos, Cornitos may be impacted. Pepsi will localize and will
have better distribution," says a top executive at a consumer company, requesting anonymity.
Industry experts say a brand like Cornitos cannot afford to slacken its efforts to build market
share. Krishna Rao B., group product head at Parle Products Pvt. Ltd, says such products are for
niche consumers, those “exposed to Western formats either through travels abroad or through
movie halls and restaurant chains. It will not have a mass appeal just yet." Besides, there are
many new entrants in the nachos spaces. One such company, set up in Mumbai by Saumil
Thanawala, a consumer goods veteran, has just launched a brand of nachos called All That’s
Good.

Future Plans in the New Normal ( Covid-19 Pandemic situation) :

With India still under the phased lockdown, with vaccination creating an issue for the markets to
fully be functional, the Green Dot company wants to venture into European markets, where the
pandemic situation almost come to an end, with all their population fully vaccinated. Agarwal is
not resting on his laurels and is aware of start-ups looking to enter the niche space. “Yes, there
are some companies who are trying to enter the space but their products are very different to
ours," he says, adding, “Competition is irrelevant because the rules of the game are waiting to be
set."

International Market Presence :

Cornitos is already a huge hit in emerging economies. Now, the brand wants to test its luck in the
G-7 – the World’s most advanced nations in the year 2021. But the consumers in these markets
are very quality conscious, taste conscious and also give a lot of importance to packaging. But
entering these markets is very tough for Green Dot. Superior positioning, excellent distribution
network, tie-up with Organized Retailers, Great Branding efforts will the key challenges the
brand will face while entering these markets. Cornitos is approaching Create Consults, a Mumbai
based Marketing Consultancy who are experts in Go-to-Market Strategy for International
Markets. Will this brand pull off on the shelves of the G-7 will be an interesting news to follow
in the year 2021. Agarwal still hasn’t visited Mexico. “I will someday," he says.
Work from Home Curriculum CASE STUDY SBUP

Questions :

1. Briefly write a Synopsis of this Case Study

2. Prepare a SWOT analysis for Cornitos

3. If you are the Consultant for the brand Cornitos how can you come up with a
Brand positioning statement ?
4. How can Green dot company do Brand Extension for the Brand Cornitos in the G-
7 countries for capturing more market share in the developed nations ?
5. How can the brand Cornitos use Digital Marketing for the success in the G-
7 Countries which are in the European Union ?

 This project /assignment is for Discussion in the Work from Home

Course Curriculum.