New Delhi: Last August, global food manufacturer Kellogg’s began locally manufacturing one of its most sought-after products in India — rainbow-coloured, ring-shaped cornflakes, called ‘Froot Loops’. Indian customers were over the moon with joy, given the price of a box now stood at Rs 175, instead of the previously imported boxes that retailed at an “ungodly” Rs 850.
Kellogg’s, launched by American industrialist W. K. Kellogg at the turn of the 20th century, is among a handful of packaged-food companies that have seen demand swell during the pandemic, as in-home consumption steadily increased and dining out was less of an option.
According to Sumit Mathur, director-marketing, Kellogg South Asia, year-on-year penetration in the breakfast cereals category grew by 30 per cent for Kellogg India during the first half of 2021.
Many in India who grew up in the new millennium have fond memories of the breakfast cereal.
“As a kid, I would always get excited to see Chocos on the shelves of a grocery store. I’d always beg my parents to buy it,” 26-year-old foodblogger Stibin Raphel, who runs an Instagram page called The Indian Food Blogger, told ThePrint.
“By the time I was in college, Kellogg’s was selling some products in smaller, more affordable packets instead of the big boxes. I ended up reaching for these small packets of Chocos and strawberry-flavoured cornflakes as mid-day snacks that didn’t even necessarily require milk,” he added.
For 23-year-old Bengaluru-based visual designer and social media specialist Sonali Mirpuri, it was a great motivation on school days. “I would get up extra early on school days, knowing Chocos or Frosted Flakes were waiting on the breakfast table. I’d mix them in the same bowl sometimes,” she told ThePrint.
But though Kellogg’s today invokes deep nostalgia among many in India, the cereal giant, which turned 116 years old Saturday, didn’t exactly start out as a success in the country.
When it entered India in 1994, the company assumed that capturing just two per cent of the massive Indian market would generate more revenue than the entire US market. But a year later, it had captured less than 0.01 per cent of a potential 95 crore Indian customers.
Convenience food for Americans
Cornflakes were invented as a healthy and bland cereal in 1894 in Battle Creek, Michigan by American physician John Harvey Kellogg. In 1906, his younger brother, Will Keith Kellogg, figured out how to market his creation, and founded the Kellogg Company.
John Harvey intended cornflakes to be a health food that would aid Americans’ digestion at a time when everything from meat, pie, and potatoes were part of a standard breakfast in 19th-century America, explains a Forbes report.
However, it wasn’t for health reasons that Kellogg’s cornflakes became a success — especially since the product ended up being pre-coated with sugar. Rather, it was a convenient “ready-to-eat” option in the morning, at a time when the Industrial Revolution had ushered people out of farms and into factories, with less time to spend in the kitchen.
Kellogg’s was able to identify local strategies, health or otherwise, and maintain a pulse on consumer preferences in its home base, but failed to do the same in India. At least, initially.
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Indians preferred hot foods
By the 1990s, Kellogg’s had a presence in nearly 150 countries and was the market leader in its home base, with $3.8 billion in revenue and a 40 per cent share of the US ready-to-eat cereal market. However, its sales in the US were stagnating, according to a case study report published by Hyderabad-based IBS Center for Management Research.
In 1994, the cereal giant opened its first manufacturing plant in India in Mumbai. It launched its premier product, corn flakes, as well as some customised products such as basmati rice flakes and wheatflakes.
Despite offering quality products and using an abundance of technical and managerial resources from its parent company, Kellogg’s sales were suffering in the Indian market. By 1995, it was estimated that for every 100 packets sold, two were bought by regular customers, with the remainder being first-time customers.
“The main reason they didn’t succeed at first was because of the eating and cultural habits of Indians. They were proposing a bland cereal to be mixed with cold milk, but Indians preferred something hot in the morning,” Shweta Jha, PhD candidate in marketing at IIM Indore and former Research Associate at Indian Institute of Foreign Trade (IIFT), told ThePrint.
“What Kellogg’s also didn’t account for is that there was a diversity of eating habits in India — in the North, paranthas and puris were preferred, and in the South, it was idli and vadas,” she added.
This view has also been shared by Homi Bhabha, an Indian scholar of English who is a professor of the humanities at Harvard University — not to be confused with the nuclear scientist of the same name.
“Indians, rather like the Chinese, think that to start the day with something cold, like cold milk on your cereal, is a shock to the system,” he had argued in a magazine article in 2005, adding that anthropology plays a critical role in business studies.
Interestingly, Kellogg’s was not the first brand to introduce cornflakes to the Indian market — the credit for that goes to Mohan Meakin Ltd in 1963. When Kellogg’s made its debut, here, there was a significant price point difference between its product and those of its local rival, which made it even more difficult for Kellogg’s to find its place in the Indian market — a 500-gm Mohan’s cornflakes pack retailed at Rs 37, while a Kellogg’s pack cost almost double, Rs 64.
It was towards the late ’90s that Kellogg’s would surpass Mohan Meakin to become the top cornflakes seller in India, accounting for about 35 per cent of the market.
Turning the tide
In her research paper on Kellogg’s published by Elk Asia Pacific Journal in 2016, Jha explained that one of the ways Kellogg’s won over the Indian market was by tweaking its television commercials, which had previously claimed Indian foods were not nutritious and therefore, “sent a wrong message to Indian consumers”.
She explained that the new ads focused on plots relative to Indian culture such as the “selfless” relationship between mother and child. It also used catchy taglines like “Jago jaise bhi, lo Kellogg’s hi (No matter how you wake up, have only Kellogg’s for breakfast)”, “Khusiyon bhari har subah (Happiness-filled mornings every day)” and “Breakfast full of fun”.
Asked if the change in branding was the main reason Kellogg’s made a comeback in India, Jha disagreed. “There were various factors. They had also tweaked their product to suit Indian taste buds, and made some adjustments for flavour,” she said.
“They also tried to create a behavioural change, which was matched by the growing effects of India’s economic liberalisation in 1991. There was more job creation and disposable income, and more cultural exchanges under the umbrella of globalisation,” she added.
The company also decided to opt for flavours such as mango and banana puree to suit local tastes, and sold products fortified with iron and calcium, using the word shakti (‘power’) in its taglines. Its brands Chocos and Frosties, launched in 1996 and 1997 respectively, were especially popular among children, and continue to be so.
Last September, billionaire and Mahindra Group Chairman Anand Mahindra shared a meme about how Kellogg’s has now come full circle by launching ready-to-eat ‘Upma’ packets — exactly the kind of hot breakfast food that once threatened its success in India.
Kellogg’s has been here for longer than a decade. So this is dated but the meme is going around now. And the sentiment endures. Never underestimate the power of our local ‘champions.’ pic.twitter.com/qnm64FyC4L
— anand mahindra (@anandmahindra) September 19, 2021
(Edited by Poulomi Banerjee)
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