INDIA: Retailers must target smaller cities, food giants say
Aseem Soni, director for consumer sales for Cargill in the country told the 7th Food and Grocery Forum India in Mumbai, the locations represent an opportunity provided retailers design and sell products that are attractive to such provincial consumers
Cargill, whose focus in India is processing, refining and marketing edible oils, wants to add 750 towns to its distribution network in the country by the end of the year. These locations are so-called smaller tier two and tier three urban areas, outside the major metropolises.
"All my growth has come from these towns and not from premium products in large cities," Soni told a seminar on 'Semi-Urbs - The New Consumption Hubs' at the conference last week.
Speaking at the summit, Nestle said growing social aspirations and prosperity in semi-urban India is driving sales of products as diverse as dairy foods and automobiles.
A S Chadha, vice president for sales for the organised trade at Nestle highlighted the need for more foreign direct investment (FDI) in retail to boost infrastructure, notably in cold chains. Chadha said delivering quality perishable products to small towns can be challenging.
Referring to the town of Bhimavaram in Andhra Pradesh, a town of 137,000 that until now would have been overlooked by major food chains, Chadha said the Aditya Birla chain More is now planning to open a second outlet there. "Ten years ago, the (modern retail) story was about big cities; now it is about small towns."
Retailers are also being attracted by lower operating costs. "In tier II cities, our profitability is not eroded by the high property rentals of metros [major cities]," said Manish Behl, business head for foods, Sahara Q Shop.
Nestle S.A. - Strategy and SWOT Report, is a source of comprehensive company data and information. The report covers the company’s structure, operation, SWOT analysis, product and service offerings an...
Synopsis Canadean's "Nestle Pakistan Limited : Consumer Packaged Goods - Company Profile, SWOT & Financial Report" contains in depth information and data about the company and its operations. The prof...
Cargill, Incorporated - Strategic SWOT Analysis Review provides a comprehensive insight into the company’s history, corporate strategy, business structure and operations. The report contains a detaile...
MarketLine's Company Mergers & Acquisitions (M&A), Partnerships & Alliances and Investments reports offer a comprehensive breakdown of the organic and inorganic growth activity undertaken by an organi...
- Campbell Soup Co.'s M&A plans should avoid fresh
- Mead Johnson wrestles "irrational" Chinese market
- On the money: Unilever aims to get food growing
- 10 things to learn: Campbell's plans for growth
- Briefing: How is gluten-free faring in Europe?
- Hain Celestial buys plant-based food firm Mona
- Post, TreeHouse "in talks over ConAgra own-label"
- Lactalis surpasses Danone on dairy league table
- Nestle replaces India MD after Maggi scandal
- Greencore sales up on UK, US growth