sweet about branding sugar
5 July 2005
customers thumb-down branded sugars. Mohini Bhatnagar
recent withdrawal by India's largest sugar manufacturer,
Balrampur Chini Mills, of its branded sugar under the
brand, 'Pyaar-Dulaar-Sanskaar' from the market holds
lessons for marketers of branded commodities. The company's
sugar brands, launched in 2003, just did not set its
cash registers ringing.
sugar was first launched in 1992 by Mavana Sugar Mills
in Northern India. Parry's launched its Parry's refined
sugar in November 2004 and plans to offer other branded
sugar variants like sugar cubes, brown sugar and sugar
syrup by targeting different price-points. At present
EID Parry, Dhampur, Tirveni and Simbhaoli are some of
the other branded sugar manufacturers in the country.
Balrampur Chini launched its brands in 2003, priced
slightly above the cost of loose sugar. The company
justified the price on the grounds that packed sugar
was cleaner and purer than loose sugar over which there
was no quality control. However, with consumers giving
the product the thumbs down, Balrampur Chini decided
to stop marketing its products in the branded packet
all branded sugar marketers the logic of marketing branded
sugar lay in the fact that if commodities like atta,
salt and oil could be turned into successful brands,
so could sugar. The feeling was that consumers would
accept the value-adds if an established company gets
into branding. For instance, Parry's and Dhampure refined
sugar brands are claimed to be sulphur-free and absolutely
clean unlike the normal sugar available in the commodity
market. This is possible, the companies say, because
they use the latest technology to process sugarcane.
say factors like transportation costs are loaded against
the success of marketing branded commodities like sugar.
Perhaps, as a result, sales have tended to be either
localised or have found acceptance among institutional
buyers like upper segment hotels. For instance, Parry's
'Pure refined sugar' is only available in the South
as the company says sugar is a freight sensitive product.
Branding can be successful only if the product offered
across price-points and sugar manufacturers should offer
value-adds to commodity sugar without increasing its
price since the sugar market is extremely price sensitive.
In recent times the price of sugar has been hovering
around Rs20 and above which takes the price of branded
sugar up to Rs24 or more.
biggest challenge for the branded players is to bring
in more value-adds to convince the consumer of the superiority
of a branded product. They say commodities like edible
oil and atta incorporate a huge amount of value add-ons.
Edible oil for instance needs high technology refining
and hygienic packaging while atta makers offer premises
of convenience and hygiene while the difference between
loose sugar and branded sugar is not really visible
to the naked eye.
Balrampur Chini's experience with branded sugar reveals
that consumers are indeed unconcerned about the impurities
in the sugar and were not eager to pay that premium
for the branded product.
to company executives, Balrampur Chini's branded sugar
business generated 1 per cent of the company's total
turnover of Rs930 crore for the year ended March 31,
to industry experts the consumption of sugar in India
is about 180 lakh tonnes annually, the highest in the
world. The retail segment accounts for sales of 45-lakh
tonnes, while 20 per cent of the total sugar produced
is used by large industrial consumers like manufacturers
of soft drinks, chocolate and confectionary, biscuits
and so on. The remaining 55 per cent is