Eat a cookie at the chemist's

‘Where there is a consumer, there’s scope for an F&B kiosk’ - that could well be the 21st century Indian marketing mantra. As F&B (food and beverages) retailing comes of age, unconventional selling points are becoming ubiquitous. Consumers can now buy yoghurt and packaged smoothies at fruit-juice parlours, chocolate cookies at pharmacies, cappuccino at hospital lobbies and frozen nuggets at multiplexes.

It seems any place that attracts multiple consumers frequently will become a dot on F&B firms’ distribution maps. Real Cane in west Bangalore is one such dot. Nestled amidst a line of stores selling knick-knacks, the 200-square-feet parlour sells sugarcane juice - and much more — to about 500 consumers every day. Next to the juice-vending machine in the rear is a small refrigerator showcasing flavoured yoghurt and smoothies from French dairy firm Danone. A chart on the glass panel announces fries and potato products from Canada-based McCain Foods.

Shantamurthy Bhat, owner of the four-year-old Real Cane, says McCain foods have been available for three years now, while Danone’s products were introduced a month ago. Ever since, most consumers have some McCain, sip sugarcane juice and take away smoothies or yoghurt.

It’s a win-win proposition, says Bhat. Food brands give Real Cane a competitive edge over other juice shops in the vicinity. And consumer hotspots like the juice parlour offer much-needed visibility to food brands, particularly new dairy entrants like flavoured yoghurt and smoothies, frozen foods like nuggets and cutlets, and dietary biscuits. Impulse-buying is key to sales of F&B products, especially for new firms and those entering a product category, says Amitabh Mall, partner and director, Boston Consulting Group India.

Like juice parlours, pharmacies are bright dots on the F&B distribution maps. Connect the dots, and, presto, you have a vast network to sell F&B products. So vast indeed that their share of F&B revenue is significant, up to 30-40%, says Pinakiranjan Mishra, partner and national leader of retail and consumer products, Ernst &Young India (E&Y).

Agrees Nikhil Sen, MD of Unibic Biscuits India, an arm of the Australian biscuits major. He says pharmacies form a key component when it comes to selling biscuits made for diet- and health-conscious people.

Currently, almost 40% of the total space in a chemist’s store is occupied by non-prescription products led by health biscuits and health drinks, says Prasad Danave, secretary-general of Retail and Dispensing Chemists’ Association. “This is so as prescription products cannot be kept in visible glass counters. Hence, that space is entirely taken up by F&B products.”

The endeavour of F&B firms is to be present wherever consumers abound, confirms Swati Jain, head of marketing at Danone India. Not just juice parlours and pharmacies, even institutions, cafeterias and canteens make for great points of contact, she adds for good measure.

Globally, such captive consumption centres, consumer hotspots and channels like caterers and restaurants, have proved to be very effective in driving trials and visibility, says Mishra of E&Y. Small wonder then that since 2007, Godrej Tyson Foods (GTF), the joint venture company between Godrej Agrovet and US- based Tyson Foods, has been using its 50-square-feet kiosks at 18 multiplexes across India to retail its frozen foods like nuggets, fries and cutlets. Unlike a kirana store or a supermarket, the kiosks cook and sell the munchies to movie-goers. “This in turn can translate to sales at retail stores,” says Sushil Sawant, GTF’s associate vice-president for India. On average, 18,000 consumers buy Godrej’s frozen foods from kiosks at multiplexes per month.

Similarly, UK-based Costa Coffee’s cutesy kiosks at the common seating areas of private hospitals target visitors, patients’ family members and staff. Hospitals have been a focus area since the beginning of this year, says Santhosh Unni, CEO of Costa India.

Such touch-points may not boost sales overnight but are very effective in inducing trials, say retail experts. For the record: as of now, alternative channels contribute less than 10% to F&B firms’ revenues. But non-conventional distribution is more about attracting as many people as possible to experience the brand, says Costa’s Unni.

Where else can you attract “as many people as possible?" Sawant of GTF gives a hint of the things to come. “Railway stations would be an option in future.”

Food for all everywhere
A 2011 Deloitte report says the retail market’s size in India is $396 billion and will grow at 12% annually to touch $574 billion by 2015

The Deloitte report says F&B firms have tremendous scope to retail their products beyond traditional kirana and supermarkets

There are nearly 6 lakh chemist shops (in both organised and unorganised markets) that can be used to retail biscuits, health drinks and such non-prescription products

There are about 1,000 multiplexes in India and their number is growing, suggesting there would be many more potential new sales points for F&B products

There are 8 lakh fruit-juice parlours and 29,800 private and corporate hospitals in India that could double up as sales points for certain F&B products