‘Business Strategy- Aashirvaad Atta’

ABSTRACT

AASHIRVAAD atta, India’s no.1 Atta brand*, contains minimum 6% wheat

protein, as per FSSAI regulations. Wheat protein is naturally found in grains like
wheat, barley, rye and oats. It gives elasticity to the dough, helps it rise and gives it
a chewy texture. So your rotis are soft and tasty.The packaged flour market is
growing at about 40% per annum, according to the Ministry of Food Processing
Industries. This paper studies the factors which lead to brand awareness, by a
random sampling of 100 customers and 20 retailers. The paper analyses the brand
awareness of a particular packaged atta brand – Elite atta, and also includes
insights from the retailers. Recommendations to improve customer satisfaction are
put forth. In the year 1999, a group was chosen from various fields with a singular
agenda of creating a successful food and beverage business at ITC. Ramesh and
Romit, the two whiz kids in the group, decided to approach a consulting firm to
understand what could be the potential entry segments for the business. After
months of data collection and analysis, they created a huge entry strategy for the
business. Biscuits, Atta, Rice and Refined Oil were some of the initial set of
categories that they proposed to enter with. On February 2000, they were
summoned to share the entry strategy with the Board. After a lot of deliberation,
the board sanctioned the “Foods Pioneering Team” to start business with the entry
in Biscuits – one of the largest food segments, Atta – that was primarily unbranded
and hence was expected to have a great future- and Ready to Eat segment which
they envisaged the convenience seeking “Modern India” would adopt. The foods
team was sent from Kolkata to Bengaluru to start operations. Ramesh was
entrusted with the responsibility to start the category. One of the first thing that
Ramesh did was to call his favourite research company and gave them a detailed
brief to explore the category. Mr. Josh the lead researcher on the category came in
with a very exhaustive approach. Considering that Ramesh had a huge budget
constraint, he decided to cut down on the scope & focus on the market construct
first. Josh came back in a months’ time and showed a dire market condition.
 KEYWORDS
 Branded Flour,
 Customer Satisfaction
 Brand Awareness
 Attributes Ranking
 Retailer Study
 Aashirvaad Aata
 INTRODUCTION TO THE COMPANY

ITC Limited is an Indian multinational conglomerate company headquartered

in Kolkata, West Bengal.[5] Established in 1910 as the 'Imperial Tobacco
Company of India Limited', the company was renamed as the 'India Tobacco
Company Limited' in 1970 and later to 'I.T.C. Limited' in 1974. The dots in the
name were removed in September 2001 for the company to be renamed as 'ITC
Limited' where 'ITC' would no longer be an initialism. The company completed
100 years in 2010 and as of 2012–13, had an annual turnover of US$8.31 billion
and a market capitalization of US$52 billion. It employs over 30,000 people at
more than 60 locations across India and is part of Forbes 2000 list.

History

Tobacco business and early years

"ITC Limited" was incorporated under the name 'Imperial Tobacco' which was
later renamed as 'Imperial Tobacco Company of India Limited', succeeding W.D.
& H.O. Wills on 24 August 1910 as a British-owned company registered
in Calcutta.[6] Since the company was largely based on agricultural resource, it
ventured into partnerships in 1911 with farmers of southern part of India for
sourcing leaf tobacco. Under the company's umbrella, the 'Indian Leaf Tobacco
Development Company Limited' was formed in Guntur district of Andhra Pradesh
in 1912. The first cigarette factory of the company was set up in 1913 at
Bangalore. In 1918, leaf-buying points were created in southern India. ITC's
cigarette factory at Munger was equipped with printing facility in 1925, paving
way for its first non-tobacco business.

Though the first six decades of the Company's existence were primarily devoted to
the growth and consolidation of the cigarettes and leaf-tobacco businesses, ITC's
packaging & printing business was set up in 1925 as a strategic backward
integration for ITC's cigarettes business. It is today India's most sophisticated
packaging house.[7] More factories were set up in the following years for cigarette
manufacturing across India.

In 1928, construction began for the company's headquarters, the 'Virginia House' at
Calcutta. ITC acquired Carreras Tobacco Company's factory at Kidderpore in 1935
to further strengthen its presence. ITC helped to set up indigenous cigarette tissue-
paper-making plant in 1946 to significantly reduce the import costs and a factory
for printing and packaging was set up at Madras in 1949. The Company acquired
the manufacturing business of Tobacco Manufacturers (India) Limited and the
complementary lithographic printing business of Printers (India) Limited in 1953.

The company was converted into a Public Limited Company on 27 October 1954.

The first step towards Indianization was taken in the same year with 6% of Indian
shareholding of the company. ITC also became the first Indian company to foray
into consumer research during this time. During 1960's, technology was given
more focus with setting up of cigarette machinery and filter-rod manufacturing
facilities aimed at achieving self-sufficiency in cigarette-making.

Ajit Narain Haskar became the company's first Indian chairman in 1969 and this
was crucial in building up the Indian management for the company. As the
company's ownership progressively Indianised, under Haskar's leadership, the
name of the company was changed from 'Imperial Tobacco Company of India
Limited' to 'India Tobacco Company Limited' in 1970. ITC also became the first
company in India to start phased Indianisation of capital and the Indian
shareholding of ITC grew from 6% to 25%. ITC entered into brand sponsorship for
various sporting events, starting from the 1971 Scissor's Cup. Innovative market
campaigns and electronic data processing were started in the 1970s.

In 1973, ITC set up its integrated research center in Bangalore, aimed at

diversification and venturing into newer businesses with research and
development. With the unfolding diversification plans, the name of the company
was changed to 'I.T.C. Limted' in 1974. The Indian shareholding grew further to
40% during this time. ITC entered into the hospitality sector with hotel business in
1975 with the acquisition renaming of ITC Welcomgroup Hotel Chola in Madras.
ITC chose the hospitality sector for its potential to earn high levels of foreign
exchange, create tourism infrastructure and generate large scale direct and indirect
employment.

The shareholding went over 60% in 1976 and more hotels were started by the
company in the following years. ITC Sangeet Research Academy was set up at
Calcutta in 1977. In 1979, ITC entered the paperboards business by promoting ITC
Bhadrachalam Paperboards Limited. J N Sapru took over as the company's
chairman in 1983 and the international expansion started with the acquisition of
Surya Nepal Private Limited in 1985. The year 1986 saw vigorous moves from the
company with opening of an Indian restaurant was in the city of New York,
acquisition and renaming of Vishvarama Hotels to ITC Hotels Limited, setting up
of two new ventures - the ITC Classic Finance Limited and ITC Agro Tech
Limited under its umbrella. ITC also entered into the edible oils industry with the
launch of 'Sundrop' brand of cooking oils in 1988. Tribeni Tissues Limited was
acquired in 1990. K L Chugh assumed the role of chairman in 1991 and ITC
Global Holding Private limited was started as an international trading company in
Singapore in 1992. In 1994, all the hotels under the company were transferred into
the listed subsidiary company ITC Hotels Limited. ITC, through the brand 'Wills',
sponsored the 1996 Cricket World Cup.

Y C Deveshwar took over as the company's chairman in 1996 and the corporate
governance structure was re-crafted to support effective management of multiple
businesses. ITC exited from edible oils business and financial services; sold the
ITC Classic Finance Limited to ICICI Limited and handled the 'Sundrop' business
to ConAgra Foods Limited in 1998. In the year 2000, an innovative initiative for
farmers called 'e-Choupal' was started in Madhya Pradesh in 2000. The same year
witnessed the launch of ITC's 'Wills Sport' range of casual wear with first retail
outlet in New Delhi and ITC's entry into stationery products and gifting business
introducing the 'Expressions' range of greeting cards and 'Classmate' notebooks. A
wholly owned information technology subsidiary, ITC Infotech India Limited was
also started in 2000 and the ITC Bhadrachalam Paperboards Limited was merged
into ITC Limited. The name of the company was changed to 'ITC Limited'
omitting the dots and adapting the strategy 'No stops for ITC' in 2001. Employee
stock option scheme was introduced for the first time and a web portal for the
company was launched. Subsidiaries for ITC Infotech were set up at United
Kingdom and USA.

Other businesses

 Foods: ITC's major food brands include Kitchens of India; Aashirvaad, B

natural, Sunfeast, Candyman, Bingo! and Yippee!. ITC is India's largest seller
of branded foods with of over Rs. 4,600 crore in 2012-13. It is present across 6
 categories in the food business including snack foods, ready-to-eat meals, fruit
juices, dairy products and confectionery.
 Personal care products include perfumes, haircare and skincare categories.
Major brands are Fiama Di Wills, Vivel, Savlon Soap & Handwash, Essenza Di
Wills, Superia and Engage.
 Stationery: Brands include Classmate, PaperKraft and Colour Crew.
Launched in 2003, Classmate went on to become India's largest notebook brand
in 2007.
 Safety Matches and Agarbattis: Ship, i Kno and Aim brands of safety
matches and the Mangaldeep brand of agarbattis (Incense Sticks).
 Hotels: ITC's Hotels division (under brands including WelcomHotel) is
India's second-largest hotel chain with over 90 hotels throughout India. ITC is
also the exclusive franchisee in India of two brands owned
by Sheraton International Inc. Brands in the hospitality sector owned and
operated by its subsidiaries include Fortune Park Hotels and WelcomHeritage
Hotels.
 Paperboard: Products such as specialty paper, graphic and other paper are
sold under the ITC brand by the ITC Paperboards and Specialty Papers
Division like Classmate product of ITC, well known for their quality.
 Packaging and Printing: ITC's Packaging and Printing division operates
manufacturing facilities at Haridwar and Chennai and services domestic and
export markets.
 Information Technology: ITC operates through its fully owned subsidiary
ITC Infotech India Limited.
 Dairy Products: ITC also in a process to start Dairy Products.
 INTRODUCTION TO CASE
India is one of the world's largest food producers, yet branded foods account for an
inconsequential proportion. Among the various food industry segments, the largest
is wheat. The Ministry of Food Processing Industries‟ estimates of the industry's
size vary, but it is generally put at around Rs. 80,000 crores. The market for
branded atta is growing rapidly at 40 per cent per annum. The branded atta market
is around 300,000 tonnes, valued at Rs. 250-275 crores. Compared to its potential,
it is very small right now. According to a Tata Strategic Management Group
(TSMG) report, flour is one of the top 5 fastest growing food categories, expected
to reach Rs.17,350 crore by 2015. The packaged atta brands are presently
competing on several planks, the chief one being the health plank, including
fortifications, child growth, digestion, heart health, energy, general health and
weight control. Inspite of this strategy, volume, affordability and proper
distribution network still continues to be the chief sales driving factors (Kumar,
2010). Considering the industry's size and low brand penetration, international
giants have set their sights on the nascent Indian market for branded wheat
products - biscuits, breads, packaged atta and innovations such as chappatis. This
paper proposes to assess the brand awareness and retailer perception of the branded
packaged atta produced by Elite Breads Pvt Ltd vis-à-vis other bread brands, by
the customers in Cochin.Branded Atta was negligible in the market, with 0.2 Mn
tonnes, which was approximately Rs 660 Cr in value, and half of this was
contributed by National players like Annapurna etc.
Although Ramesh was extremely disappointed to see this, he was also equally
positive since this segment was growing disproportionately at around 30% and a 3-
year CAGR of 25%. The entire ITC team regrouped along with Josh and decided
on the next steps. The task was to figure out the consumer perspective towards the
category and more importantly the core reasons why majority of people still
consumed unbranded Atta. It was again a long gestation
period of around 8 weeks, post which few key issues understood by team were:
1. Lack of consistency of the Atta in the
bag leading to dissatisfied homemaker
and the family.
2. Most consumers felt that Branded Atta
was grinded long time back and was
packed later thus leading to loss of
freshness.
3. Most of the Atta brands were actually
selling Maida and not Atta.
4. Atta was not grinded as per the need of
the consumer of that specific market.

While Ramesh was from Tamil Nadu and Romit was from Delhi, they soon
realized that they look at the category very differently and hence were extremely
worried on how they will be able to sell the same brand to different people of India
using the same communication or brand
proposition. West is the most evolved and discerning region, they rely a lot on their
understanding of the category and hence even today around 90% of people from a
city like Mumbai continue to buy wheat and then grind it, instead of buying
Branded Atta. In North, it is an integral part of their food habit and consumed
multiple times in the day. While in the rice dominated geographies of East and
South, East has a more ingrained habit of roti consumption but South
is the non-frequent user of the category. The core reason for entry of the category
in South is primarily due to “health reasons” and is advocated primarily by doctors.
With such diverse level of acceptance of the category, it was evident that the same
brand needs to communicate differently to different people. With all the required
information, Ramesh now had to put a plan in place and execute the
same. He quickly gathered a small team, used the synergy of ITC group companies
and within a span of another two months they took the launch plan to the Board.
The Board was extremely happy and advised the team to hasten the launch and
crunch the timelines by 6 months. Even today, the core principles laid down by
Ramesh and Romit are being carried
forward.They started to source Atta directly from farmers and today they engage
with around 4500 Choupals from over 30,000 villages. With the help of their E
Choupal experts, they choose the best quality grains over 70 grades so that they
can create optimized products for consumers for every part of the country. To
provide “freshly grinded Atta”, they created factories in various locations and
today they have more than 250 factories across the country to ensure that
Aashirvaad Atta can be delivered within a distance of less than 200 Km from any
of the large consumption market. Maintaining best in class quality is a core DNA
of ITC and hence to ensure that they designed 234 tests and 176 checks. Also with
the help of ITC’s Agri Business Division, they created an SOP such that each bag
of Aashirvaad can be traced back to the farm from where the grain has been
procured.Post a few teething problems, Aashirvaad Atta slowly inched to become
the largest branded Atta in India. By this time, the Foods Division became the most
sought after place for most new joinees and some of the aspirant current employees
within ITC. Ramesh called for a celebration as Aashirvaad reached its landmark of
Rs 100 Cr. However, this celebration did not last long as Ramesh was quickly
summoned by the Central Management Committee at Kolkata to present a long-
term strategy for Aashirvaad Atta business. Ramesh went back to the research
agency to look at the current trends and provide some inputs on what could be
the possible extension platforms for Aashirvaad. In the long briefing meeting with
the agency,the marketing manager of Aashirvaad, Vineeth insisted that it is
important to put down few
of the core values of Aashirvaad and what that Aashirvaad doesnot represent. This,
Ramesh thought was a good input as it will act as guard rails to decide what the
probable extension platforms are. A combination of consumer perspective, internal
stakeholders beliefs and understanding of the brand and the category, led to a
detailed brand key for Aashirvaad. For simplicity,everyone was handed a small
note, which summarizes what Aashirvaad is, and what it should never be.

Looking at the trend in consumer attitude and their eating habits, one of the variant
extensions suggested was meant for those consumers who are discerning,
understand the category, are knowledgeable and looks out for something that is
best in class. Vineeth suggested the name Aashirvaad Select. The entire
proposition that he designed was that Select would be created
from Sharbati / Sehore grade of wheat, which is grown in a few fields of Madhya
Pradesh.This wheat is considered the “king of wheat” and hence rotis made of this
wheat has a sweetish taste and remains soft for a very long time.Alongside they
observed that consumers in India were becoming health conscious and were not
only talking about this need but were acting on it too. People started engaging in
strategies like cutting down on oil, sugar, started with some physical exercise like
walking etc. Having observed this, the second plank suggested was a launch of
Multigrain Atta. The construct of this product was such that it replicated the
combining of Chana, Soya and Atta and to that;they added Oats, Maize and husk.
Through this product, the core benefit that Vineeth wanted to provide to the
consumers was a more nutritious Atta. It also would help the mother to provide
healthier rotis to the kids who generally create a lot of fuss in eating healthy food
like vegetables and fruits.Having heard the two propositions, Ramesh was positive
about them and satisfied that the brand team was ready to take Aashirvaad to a next
level. Over the next two years, Vineeth and his team under the guidance of Ramesh
communicated about Aashirvaad Select and Aashirvaad Multigrain to generate a
substantial incremental business for the organization.Through the augmentation of
the portfolio the value added part of Aashirvaad accounted for more than 10% of
the total business, however Vineeth and his team was also successful in growing
the core. Aashirvaad continued to dominate as the largest brand and the fastest
growing brand in the country.
Most of the growth was from converting the unbranded consumers to Aashirvaad
user. Wheat and Loose Atta contributed to more than 50% of Aashirvaad’s growth.
In south India,penetration of Aashirvaad grew to around 70% of urban households.
Vineeth and his team kept conducting yearly equity study only to realise that
Aashirvaad has become an “Olympic brand” across the country. The research
agency also came back and told the brand team that in the eyes of the consumer,
Aashirvaad stood for joyful nurturance and this was in complete sync with the
desired values that the brand wanted to own.While all the inputs worked positively
for the brand, it was critical for the business to accelerate the trajectory. Ramesh
hence called his team and gave them an agenda:
1) What are the next levers of growth for the business?
a. Existing
b. New platforms
2) What should be the infrastructural requirements to make the new levers
successful?
3) What are the marketing tasks to make both the next macro levers successful
(existing
& new)?

Anuj soon realized that his search for new avenues needs to satisfy a set of criteria:
1) A large business opportunity of around 500 Cr and above.
2) It should be in harmony with a consumer trend.
3) It should abide by the brand world of Aashirvaad.
4) It should capitalize the business synergy of ITC (Agri Business, Paper Division,
Hotels,
Lifestyle, etc.)
 EVALUATION CRETERIA

While he was still trying to put his head around so much of information, he met
Sudhir (hiscounter-part) in a training program in Mumbai. Over the two-day
training period at Mumbai,he realized that Sudhir is privy to a large piece of
research work dedicated to Health needs of
Indian consumers. Anuj realized that the core health needs or apprehension, which
the homemaker has for her husband and elders in the family, is around immunity,
heart health,diabetes, weight management and lack of energy and stamina. Next
day morning when Anuj was on his way back to Bengaluru, he found that a leading
newspaper was carrying an article on Diabetes and which mentioned that India has
the second highest Diabetic population in the world ~ 69.2 Million as of 2015.
Moreover, as per WHO by 2030 India will have 87 Million Diabetics.
 CONCLUSION

It also mentioned that as per experts one of the issues that a diabetic person faces is
sudden spike in sugar level in the body once the person consumes carbohydrates.
Anuj came back and interacted with the R&D division and found that they can
create an atta variant which can address the specific problem that the daily
mentioned. He carried out a few concept researches and came back with a plan to
launch an Atta variant with clinical backing to strengthen the credibility. He went
back to Mr Ramesh and presented the business case.After a lot of discussion, the
decision was taken to go ahead with the launch.
Anuj made a 360 degree launch plan, decided on the distribution norms and
executed what appeared to be a flawless plans. However, post almost a year into
the launch it was observed that the offer was struggling in the market place to
achieve the targets that it has set for itself.Mr. Ramesh, Vineeth and the CEO of
the Division Mr Dubey asked for a detailed review of he launch. Below are some
of the excerpts of his document which stated the inputs that Anuj had executed on
ground:
 REFERENCES

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Retrieved 2017-12-21.
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3. ^ "Aashirvaad Story". Aashirvaad. Retrieved 23 June 2013.
4. ^ "Aashirvaad Products". Diamond Enterprises. Archived from the
original on 20 July 2013. Retrieved 23 June 2013.
5. ^ "Masala Lauki --Chana Dal". Raaga on. The Singing Chef. Retrieved 23
June 2013.
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http://mofpi.nic.in/ContentPage.aspx?CategoryId=184 accessed on
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