Feature

Kellogg India's strategy shift towards healthy breakfast options

Kellogg’s breakfast cereal elbowed its way into a difficult market, dominated by idlis and parathas. Now it is bracing up for its next battle

Faisal Magray

It was an age of adventure, it was an age of conservatism. It was the season of Alisha Chinai’s unapologetic lust for a bare-chested Milind Soman, it was the season of Alok Nath’s forehead creased in worry for our sanskari souls. We were all headed for revelry, and we were all wondering if we should, really. With due apologies to Charles Dickens, this mutilation of his prose could describe India in the nineties, when it was torn and living between videsi-desi worlds.

It is also when Kellogg came to India. Steaming idlis and buttered parathas were still the morning staple, and cereals were dismissed as flaky (pun intended); but the Michigan-headquartered company was determined. Today, that has paid off, with Kellogg capturing 55-60% of India’s Rs.26-billion cereal market. In the past decade, its sales rose from Rs.1.8 billion in 2009 to Rs.8.9 billion in 2018, at a compound annual growth rate of 19.4%. Its profit tripled from Rs.125 million to Rs.360 million, in the same period (See: Number crunching). About 95% of its sales come from the cereal category (the rest comes from premium chips brand Pringles).

Its phenomenal success has largely come from understanding its target audience well, as people who are “nutrition seeking, time starved”. Essentially, kids and young adults, who are short on time and yet need their breakfast to be quick and healthy. “We believe 65% of India falls under this category. Our lives are not getting easier, and talk about a kitchen-less world could soon come true,” says Mohit Anand, MD of Kellogg South Asia.

The cereal company had just been settling in, fluffing up its pillows, when new challenges have risen. Competition has upped its game and hungry start-ups have stepped into the breakfast category. Also, Indians are now cutting out sugar from everything (except dating apps) and processed cereals are seen as loaded with ‘White Death’. So, the 120-year-old multinational has to be on its toes and expand into newer segments if it has to remain relevant to the target audience that it has meticulously identified.

Unexpected turn

When Kellogg

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