R P Sanjiv Goenka hits FMCG market with Too Yumm brand
11 Apr 2017
R P Sanjiv Goenka Group's FMCG business has hit the market with its first brand Too Yumm. Two products, Foxnuts and Wheat Thins, were launched on Monday.
While launching the products in Kolkata, group chairman Sanjiv Goenka said there will be two more launches in Pune and Guragon this month, with city-wise expansion happening in 40 cities covering one lakh retail outlets over a period of 12 months.
He said the packaged food business has been introduced under Guiltfree Industries and the group has targeted $1 billion (about Rs6,500 crore) from the fast moving consumer goods (FMCG) business in five years. The company will gradually enter into other segments of FMCG but before this it will cover the food portfolio comprising snacks and packaged foods.
While Goenka has launched two products initially, ''the plan is to launch 10 products with 40-50 variants over the next 12 months'', Goenka told the media in Kolkata, adding the two products Foxnuts and Wheat Thins would be initially available at two price points - Rs20 and Rs30 a pack - but the company would gradually roll out snack packs at Rs5 and also premium range snack products mainly made of organic food at a higher price point.
Goenka said the FMCG business is capital light and the company plans to invest Rs10,000 crore over a period of one year, which would include takeovers, setting up factories, brand building, creation of a distribution network, acquiring products, acquiring infrastructure and other areas.
Although Goenka didn't comment on the amount of money so far invested to launch its FMCG business, he said the current products were being outsourced from four facilities across Gujarat, Pune and Delhi.
While the FMCG business earns a gross average margin between 40 per cent and 50 per cent, the margins of Guiltfree Industries in the first year would depend on the acquisitions it makes over a period of year. ''We are hungry for takeovers but we are not going to be foolish in our acquisitions,'' Goenka said.
He said the idea of entering the FMCG segment followed a McKenzie study which suggested the R P Sanjiv Goenka Group enter into the segments of business process outsourcing (BPO) and FMCG. Goenka made the first announcement of entering the FMCG segment during the Bengal Global Business Summit in January this year.