Cargill Foods India took acquisitions route to enter India in 1987 and today it has a host of popular brands with local appeal such as Gemini Oil, NatureFresh, Sweekar, Rath, Sunflower Vanaspati, Leonardo range of olive oils, and Sampoorna Chakki Atta.
Along with the creative agency Lowe Lintas and media agency Zenith Optimedia, Cargill believes in building its brands by educating consumers in imbibing healthy eating habits in its communication strategies and thinks that the government’s recent policies, including GST, will help the sector to get organised and grow.
BestMediaInfo.com caught up with Neelima Burra, Chief Marketing Officer and Business Head - Health and Wellness, Cargill Foods India, to know the company’s marketing and communication strategy, how the multinational company is faring in India, competition from Patanjali, challenges and much more.
Burra started her career in sales and after working for about two years in that segment moved to marketing and branding. Burra’s early career was in the FMCG space. She was behind the launch of female condoms in India. Later, Burra moved to electronics and now she is back in the FMCG sector. Her movement from FMCG to electronics and then back to FMCG has not been difficult as she believes that the ‘fundamentals of marketing and branding don’t change'. The consumers are the same, only the behaviour is different’.
There is a change of roles of marketers. New terminologies such as Chief Growth Officer, Chief Revenue Officer are now heard in the industry. What do you think about it?
Who is a marketer? A marketer is one who is able to enhance the profitability of the brand and the business by putting creative solutions on the product, pricing, promotion and placement. Marketing is all about being creative in business and bringing the product, solutions and services to the consumer, in a way that the consumer is really willing to pay you a premium for your product. If you are able to do that, you will enhance profitability. If you are a profitability enhancer in the company, why should you fear? Every spend in your personal life or job needs to have an ROI. There are two kinds of marketers. One who is worried about the ROI. The second is worried about the communications from the spends. One has to create an action to sell. If the awareness is not creating an action to sell, ROI is not there. If the CMO’s role is only about communication, then the action cannot be in the command. If the CMO’s role is about conversions on the shop floor, ROI has to be there. Most of the time the CMOs’ role is confused because of the way of their interactions with the CEOs in the organisations and the expectations set with the CMOs. You ask your CMO, I need better profitability with my brands and business, they will deliver. You ask your CMOs, I need to create awareness for the brands, they will deliver. In the first one, you can measure ROIs and the second one you can’t measure ROIs. The lesser you are able to measure ROIs of your marketing spends, the more your job is in trouble.
Something must have triggered this conversation over the ‘changing role of CMOs’ to happen?
It is the economy that is very unpredictable. Right from demonetisation to GST to numerous changes that are happening; profitability and predictability is a big question. If the company is going through a crisis of profitability and development, the questions will arise. Forget about the CMOs, the questions will automatically arise within the organisation as to who is contributing towards the P/L and who is not. Another similar spark of conversation is in the human resource management of the companies. I think conversations will happen where I don’t see direct linkages to the gross margins and profitability. I segregate anything that is not linking to my gross margins and profitability and I question each and every of those costs.
Would a CMO’s role ever change in India?
You call it whatever. To my mind, marketing as a role will always remain in India. The only difference that needs to come in the industry and the economy is where more demand will be on ROI. It is important to embed the ROI conversation into the KRAs of the people, more specifically to marketing, because they are the ones who are investing money. If you invest then you have to ask for return because a brand is not expenditure but an investment.
The food category that you operate in the Indian market is generally occupied by local brands. How difficult was it to enter this category and sustain against local brands?
There are over 500 brands in the edible oil industry. It is one of the most cluttered industries with a lot of unorganised players. Unbranded to branded is a big shift that is happening in the industry. Government policies such as GST are favourable for the industry and policies to ban the sale of loose oil will help convert more unbranded ones to branded. The number of players will become fewer and there will be more sense to competition.
Secondly, the entry barrier will be high because edible oil is not an active category but a passive one. The need of marketers is to convert it into a more active conversation because there is a lot of confusion on which is a better oil. The more you have a conversation with the consumer on which is a better oil, and give them scientific facts behind it, the better it is for the industry to upgrade the knowledge of the consumer to have their active participation. In this scenario, Cargill entered India by acquisitions. The industry is very regional. If you go to one market, they consume sunflower oil, you go to the second market, they prefer til oil, you go to a third market, they will only take mustard or groundnut oil. Introducing a new brand in this scenario is very difficult. In Cargill, we realised that and went ahead to acquire some good heritage brands. We acquired Gemini, Sweekar, Sunflower Vanaspati and Rath Vanaspati. Cargill launched its only brand in India and that is NatureFresh Atta and oil.
Why isn’t there any brand film for Cargill?
We will see when we need to bring in that effort. As of now, these brands are working well for us because every brand has a geography to play. Gemini plays in Maharashtra, NatureFresh plays in UP, Bihar, Jharkhand and Delhi-NCR, Leonardo plays in all the metro brands. Sweekar plays well with the Gujarati and Marwari communities. The moment we say all this is Cargill, I don’t think we are prepared. This industry is very fragmented and I don’t think this kind of mother branding approach is going to help.
Cargill Foods India’s philosophy is more about the house of brands. Cargill is more of an endorser of trust. Cargill just lends that trust because the company comes with over 150 years of global experience.
Hasn’t the sudden growth of Patanjali as a direct competitor surprised you and how big a dent have they made in your market share and revenues?
Of course, it took every player with a surprise. Patanjali is an awakening to the country and to the established brands how they have been working. I feel there are multiple facets of every product solution which you are bringing to the consumers. Patanjali is more of a belief over the period of time. Only time will say while they are growing the products, solutions, and offering; how much of them are actually meeting the consumer needs and satisfying them.
Yes, they have grown and no one denies that they have done a fabulous job. But they have not been able to hit our business till now. Especially in the edible oil category, they are just another brand for us.
How difficult or easy it is to deal with the trust they enjoy among consumers?
I’m a firm believer that it is always difficult to break into a trust of consumer and belief. Breaking a trust and building a new one requires a long-term strategy. In short-term, it’s going to be difficult for any brand.
You have taken many anti-counterfeit measures to check the authenticity of products, including hologram and batch code verification, through the app. Does it help and does the end consumer take note of it?
Counterfeit has been a big menace in the industry. This is an unorganised industry and much duplicity is happening on the brands. The consumers are innocent and they don’t know if the product they are buying is adulterated. Counterfeiting is prevalent in the industry for long and is very common in the cosmetic and food industry. I have not just voiced it as a citizen and a responsible marketer; I have also given the solution to people. I have tried my level best to educate the consumer through multiple ways and it is helping them. I’m still measuring how much a consumer is able to use it. It has been six months and it is too early to say how much it has benefited them.
FMCG products, especially the food category, rely heavily on advertising. What percentage of revenue do you earmark on marketing?
I won’t be able to share the percentage figure but over last three years, we have almost tripled our marketing expenditures.
Considering many FMCG brands have now started focussing on sustainability and CSR, has there been any change in advertising for Cargill Foods over the years?
As an organisation, CSR has been one agenda which we have been following through more than many companies in many countries. We spend a lot of our time and effort around nutrition and nourishment-related areas. We work very closely with the government on fortification as an agenda. In fact towards CSR, one of the big changes for us was fortifying all our oils, so 95 per cent of Cargill’s oil portfolio is fortified. That was our initiative. Plus there are multiple things that we do on the environment, community development around our plants and factories. This has been the core value of Cargill.
This is more about the product actually but when the brand is established in a market, it is time to look beyond the product. So, very soon we will announce the campaigns on CSR for Gemini.
Coming back to Patanjali, they have been TV heavy from the very beginning, especially on news channels. What has been your strategy when it comes to selecting the medium for advertising your products?
We have around six brands with us and every brand has a different media strategy. For an example, Leonardo is a digital brand and you will not find it on TV at all. NatureFresh is present in HSM markets so you will find it across all the mediums, including TV, print, radio and digital in Hindi-speaking markets. Gemini is almost an 80 per cent TV-led plan in Maharashtra.
Patanjali is selling their range so they are going all hog and TV is the best medium to reach out, but Cargill’s strategy is a multi-brand and micro-marketing effort. For us, it works better with this kind of media planning where I can focus sharply on the consumer with lesser spill over of the media and be focused on the output. I’m very critical about the ROI of the spends so it is important in a low-margin business to have a sharper focus on the execution and measure the ROI of the investment in the brand.
How much impact has celebrity endorsements made on the category?
It enables you to get the noticeability for the brand if you don’t have any brand positioning and value proposition, which is unique to the industry. For Cargill, all our products are very uniquely differentiated with a very strong value proposition and I don’t see any need of any celebrity.
Can you name a few memorable campaigns done by Cargill recently?
NatureFresh’ campaign titled ‘Shakti har jung ke liye’, which was about every woman battling their battle of everyday life, was one of the big hits. It helped the brand grow two times more than the industry. For the first time in the last five years, we have come up with a campaign for NatureFresh Acti-Lite. The campaign titled ‘Papa ko achche papa hum banate hain’ is about the role of women who is the captain at home. These two campaigns in last two years have actually turned around NatureFresh as a brand and have delivered better market share. ‘Khata rahe mera dil’ campaign for Olive oil was yet another successful campaign which established the brand as No. 1 brand in the premium and olive oil category.