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Millet is not a new word or a newly developed or invented grain/cereal, but nowadays it is in a lot of headlines. I can say that the world community has suddenly developed an affinity for millet. It does not mean that we Indians are not aware of it. Truth be told, we are ancient consumers of all types of millet, and our forefathers used to have it in their regular meals.
Unfortunately, as always, Indian resources were underestimated by western scholars and considered backward for using ancient practices in every category of socio-economic factors. There are various facts and figures in the stories related to eating habits, medical practices, religious practices, and even ethnic etiquette. The wisdom of Indians has been questioned in all fora but truth cannot be kept in captivity for long and no darkness can destroy the great power of light. The same was happening in edible oil categories 50 years back or 100 years ago.
India has always been an agricultural country. Here the importance of pets is always intact in their daily routine. The importance of cow is such a thing that cannot be compared to any other animal. But propagated by multinational companies that cow ghee or buffalo ghee is injurious to health and one of the biggest causes of bad cholesterol which is increasing heart attacks.
They came with some propaganda message that we should eat healthy oil and they started extracting oil from soybean, canola, palm, rice bran, etc. This has not happened suddenly but it was propagated from the platform of WHO. 100 years ago soybeans were used to feed pigs in American countries so that they could get good fat from the animals, same with canola which animals needed for more milk and fat. Palm oil was edible in its natural way of extraction process but later, for high yielding manufacturers started using chemicals s. Recently, rice bran oil has become the healthiest oil in the world after olive.
These developments did not happen suddenly, the exploitation of natural resources and their various uses were gradually implemented by these giants. A major source of the national GDP of Malaysia and Indonesia comes from the palm oil trade. Same time bad effects can be seen in their agroeconomic and climate. We hardly know about the old use of palm oil, earlier in these countries it was used in soap making and lamps. Big-2 MNCs made their fortune and now they become a trap in terms of selling products or reaching saturation level. What's next for them now that saturation in soybean oil, rice bran oil, and palm oil is at its peak? Now there is a question of stability in front of these companies related to the oil business. It was on the trade side and I heard from various doctors that chemically extracted edible oils are actually not edible and harmful to our health so they are advising to rotate on a monthly basis.
The same is happening in other grains for more products GMO products were introduced, on the name of organic. a lot of mismatching is going on in the Agri fields. Authentic foods were invented for a healthy life.
Don't you think they are finding some new avenues and inventing new products for more health benefits which they will reveal through World Health Organisation (WHO)?
Before I write critics about this, I want to put some lights on the history of Millets in India. Source: https://www.icrisat.org/a-short-history-of-millets-and-how-we-are-recognising-their-importance-in-the-modern
Millets are a group of highly variable small-seeded grasses. widely grown around the world as cereal crops or grains for human food and as fodder. There is evidence of the cultivation of millet in the Korean Peninsula dating to the Middle Jeulmun Pottery Period (around 3,500–2,000BC). In India, millets have been mentioned in some of the oldest Yajurveda texts, identifying foxtail millet (priyangava), Barnyard millet (aanava) and black finger millet (shyaamaka), thus indicating that millet consumption was very common, pre-dating to the Indian Bronze Age (4,500BC). So, here we can see how old the history of Indian millet is with us.
We must have heard stories from our grandparents that how they used to prepare their food from millet. It was true Earlier, all types of millet like Pearl Millet (Bajra), Sorguhum (Jwar), Cow Grass (Kodu), Barnyard Millet (Jhangora) are the major staples in those days. Even Millets were popular and daily food in China and other southeast countries. Even, there was a time when we were making Wheat bread/ roties only for our elite guests and in normal routine, millets were the main staples.
Various dishes are made from millet. Here in Rajasthan, people used to rehearse bajra ki rabri in the winter season. Bajra khichdi, Jai ki roti, jowar cookies are the main dishes that are loved by all. These are highly nutritious grains that come under the category of millet.
You should know the word "coarse". It was used by so-called western literature and trading companies to denote such grains under the animal feed category, which means not suitable for humans.
The dilemma in all such stories looms large for us, especially when it concerns the pride of our nation. The term coarse was associated with grains of the millet category. They were animal food according to the elite section of society. For Millet, Western culture was the center of such irony. In India, those who ate millet were placed under the poorer section of society and those using wheat products were relegated to the upper-class, elite societies. Things go on like this for centuries. But, the time has come when they realize that Indian ancient/traditional food is full of nutritional value. It is not animal feed or fattening.
Business is at the center of all development and glory to Millet
Obviously, business is the driving force in all kinds of activities. Farmers are farming and harvesting in their fields for business & manufacturers are doing production. These come under the cycle of continuous processes and events in our ecosystem. These are natural phenomena that are used by human beings to maintain their livelihood. Likeminded people used their brains to make soybean oil, palm oil, canona oil edible and create multi-billion-dollar business opportunities in different parts of the world.
These are multinational companies whose R&D always goes on without losing time, resting, and stopping. They are always on the lookout to get something beneficial from natural products. Prima facia for them things should be edible, even if it is a slow poison in the long run, brings incurable diseases, etc but for them it is business.
Now, I can correlate the developments going on in Millet. Great enthusiasm is being used by the big-2 agro-based companies, and even the government is participating in various technology know-how, promoting and trying to bring awareness among the consumers. Cross-border activities are taking place. following are the few developments which we can follow for more information.
With the aim to create awareness and increase the production & consumption of millets, United Nations, at the behest of the Government of India, declared 2023 the International Year Millets.
*The United Nations General Assembly at its 75th session in March 2021 declared 2023 the International Year of Millets (IYM 2023). FAO is the lead agency for celebrating the Year in collaboration with other relevant stakeholders. Millets can grow on arid lands with minimal inputs and are resilient to changes in climate. They are therefore an ideal solution for countries to increase self-sufficiency and reduce reliance on imported cereal grains. Source : https://www.fao.org/millets-2023/en
*As part of promoting the International Year of Millets (IYOM)-2023, O/o Addl. DGFT, Chennai in association with APEDA organised Export Awareness Program to promote "Millet" as Super Food of the Future at Anna Centenary Library, Chennai on 15th March 2023. Source: https://pib.gov.in/PressReleseDetail.aspx?PRID=1908048
*The Government of India is to launch Millet International Initiative for Research and Awareness. It is in line with the United Nations’ plans for the International Year of Millets, which is 2023. India brings in the concept of “SEED MONEY” in the initiative. Research activities on millet, and increasing their productivity will be focused on the initiative. Indian Institute of Millet Research located in Hyderabad will provide technical support to the initiative. Source: https://www.gktoday.in/topic/millet-international-initiative-for-research-and-awareness/
Why is India taking such an initiative? Is there any lack of awareness about Millet’s consumption in India? Or Indians don't have the taste for it?. These questions seem to float when we heard about the developments on the world level goes on.
Benefits of Millet’s use in our daily diet
Millets are Good for health, the Atmosphere, and Farmers.
Numerous benefits as regards health, ecosystem, and economy are associated with the Millet. Millet uses less water compared to Rice & Wheat so it is very beneficial to the soil as well as the surrounding atmosphere. Millet can be grown in low and high altitudes on arid lands, under low irrigated conditions. Like Bajra is grown in Rajasthan, the land of the desert is making it fertile. Rich of iron, calcium, protein, antioxidants etc. i.e. a complete diet for countries looking for self-sufficiency.
Millet are farmer friendly because it doesn’t need much water, is easy to harvest, and Pest resistant features of the crop help them to maximize yield and so help to increase profit on volume. Soon price will go up and it will come under the cash crop segment. And many more.
Critics & Care
I can predict that millet will replace wheat and other grains. The existing multinational agricultural companies will have a new agenda for this. WHO will publish benefits and more nutritional facts on millet. Various micro-manufacturing units will start producing processed food items like Nutri cookies, biscuits, ready-to-cook meals, and many more. The army can start millet in their food for army men. Like, it can be promoted in Countries facing nutritional issues.
Many wise countries like Canada, USA, Argentina, and Australia will be aggressive in this and they will replace existing cash crops with millets. After five years we will import quality millet from other countries as they will spend huge money on advertisement and expensive publicity will attract India's attention. India’s quality will be treated as inferior. These are my own thoughts.
I am glad that Indian millet will find a place in foreign fertile land but in the long run, these MNCs through their fabricated awareness programs will lower and lower the quality of Indian millet. Somehow our politics will help them find India a growing millet market. Amidst all such developments, there may be a dilemma in the near future when our farmers will protest that foreign millets are cheap and competitive despite the facts.
Millet is the ancient grain of India and everyone knows about it. In the current phase of development, only one thing is going viral western countries are taking initiative. So, we here in India are only praising it, nothing more.
For us, this would be a diversification of our food habits from unhealthy to healthy. Millet will provide us with complete food, nutrition, and health. We do not need to look towards western countries for its use. We have our own cuisine, taste, and customs that will stay healthy for years to come.
Millets are the future of our Food. Include it in your daily diet and stay fit.
crossorigin="anonymous"> भारत देश विश्व का सबसे बड़ा लोकतंत्र है। अनेकता मे एकता को लिए हमारा भारत विश्व का सबसे सुंदर और निराला देश है। भारत को आजादी मिले पूरे पचहत्तर वर्ष हो चुके है। इस दौरान बहुत से राजनैतिक घटनाक्रम हुए। देश ने तरक्की भी करी है और आज भारत जिस मुकाम पर है उसमे मौजूदा नैतृत्व का बहुत बड़ा योगदान है। पचास साल तक देश मे एक ही पार्टी का शासन रहा, उसके बाद कुछ साल मिलिजुली सरकारे रही। सबने देश को आगे बढ़ाने मे योगदान दिया है। इसमे कोई पार्टी खराब या अच्छी नहीं हो सकती है। हर राजनैतिक पार्टी की अपनी विचारधारा होती है और वे उसी के अनुरुप कार्य करते है। अंतोगत्वा सबका एक ही धेय होता है देश को विकास के पथ पर अग्रसर करवाना।
देश ने इंदिरा गांधी को देखा है , उनको दुर्गा की संज्ञा दी। क्योंकि उनमे नैतृत्व की क्षमता थी। वे देश को सर्वोपरि मानती थी। पर उनके साथ भी ईमर्जन्सी का दाग लगा हुआ है। वे काँग्रेस की नेत्री थी और उस समय तक देश मे नेताओ ने अपने आप को मर्यादों मे जिया और निभाया है। बाद मे अटल बिहारी बाजपाई जी आए उनको विरोधी भी प्यार करते थे, वे भी मर्यादा को कभी लांगते नहीं थे। नब्बे तक के दशक की मै बात करू तो राजनीति मे मर्यादा थी और सब उसका पालन करते थे। कोई भी पार्टी रही हो पर सब के लिए देश पहले था। पर मैने देखा है जब से देश मे भारतीय जनता पार्टी का संगठन मजबूत हुआ और डबल इंजन की सरकार का आविर्भाव हुआ तब से ही देश मे अजीब सा माहौल बनाया जा रहा है।
आज का माहौल थोड़ा बदल गया है। स्वार्थ ज्यादा हावी हो गया है। दल दल की राजनीति ने देश को भाषा, मजहब, पंत, क्षेत्र मे बाँट दिया है। पर ये सब कर कौन रहा है? और ये दल दल कैसे बन रही है। अगर हम इन सब बातों पर गौर करें तो हमारे संविधान ने ही देश मे बहुदलीय प्रणाली को रखे रहने का अधिकार दिया है। मेरा मानना है की उस समय के संविधान निर्माताओ ने संविधान मे उस समय की क्षेत्रीय विविधताओ और मतों को देख कर ये निर्णय लिया हो, पर आज के परिपेक्ष में हमे इस पर पुनः विचार करना चाहिए। मै पिछले आठ साल से देश मे जो राजनैतिक परिदृश्य बदल रहा वो देख रहा हूँ। जिस तरह से काँग्रेस के मणिशंकर अय्यर भाषा का प्रयोग करते है, जिस तरह से और भी बहुत से नेता बोल रहे है। वो बहुत ही निंदनीय है। उसमे चाहे कोई भी पार्टी हो।
मेरा ये संक्षिप्त लेख लिखने का तातर्प्य बस ये था की ये सब क्यों हो रहा है। राजनेता राजधर्म की या संस्कारों की मर्यादा को क्यों तोड़ रहे है। हाल के गुजरात चुनाव मे आम आदमी पार्टी के एक नेता ने मोदी जी की माता को अपशब्द कहे। कुछ दिन पहले पवन खेड़ा ने मोदी जी के पिता जी पर तंज कसा। चोंकीदार चोर है। किसी ने सौ सिर वाला रावण तो किसी ने नीच शब्द कहे। आखिर ये सब कहने से पहले उनके दिमाक मे ये बात क्यों नहीं आई की मोदी जी देश के प्रधानमंत्री है । प्रधानमंत्री किसी पार्टी का नहीं बल्कि देश का होता है। उनका सम्मान देश का सम्मान है।
मै व्यक्तिगत तौर पर विपक्ष के ज्यादातर नेताओ के व्यवहार की भरतसन्ना करता हूँ की वे मुद्दे की लड़ाई क्यों नहीं लड़ते, माना की सत्ताधारी पार्टी ने उनको पिछले आठ सालों से सत्ता से बाहर रखा है पर इसका ये मतलब नहीं है की वेवजह मान हानि की जाय। जब देश मे ये सब होता है तो वो किसी पार्टी विशेष की अवमानना नहीं बल्कि पूरे देश के सम्मान को नुकशान पहूँचाता है। क्या ये सब सही है?
राहुल गांधी विदेश मे जाकर जब ये बोलते है की भारत मे लोकतंत्र खत्म हो गया है और अमेरिका और यूरोप के देशों को आगे आने चाहिए इसको बचाने के लिए , तो देश की क्या इज्जत रखी एक ग्रांड ओल्ड पार्टी के मुख्या ने। ये सब निंदनीय है।
अभी हालिया बयान दिल्ली के सबसे ज्यादा पढे लिखे मुख्यमंत्री अरविन्द केजरीवाल का है जिसमे वे कहते है की देश का प्रधानमंत्री एक अनपढ़ है, भ्रष्ट है, तानाशाह, और बहुत कुछ। पर ये सब कहते हुए हम लोग ये भूल जाते है की हम अपने सिर को खुद ही नंगा कर रहे है। आखिर केजरीवाल कहना क्या चाहते है। साथ ही उन्होंने कहा है की अदानी का असली मालिक मोदी है, अदानी तो मैनेजर है और मोदी जी का पचास हजार करोड़ से ज्यादा का पैसा अदानी मे लगा है। क्या भारत की जनता इतनी मूर्ख है की झूठ को सच मान बैठे, अगर केजरीवाल की बात सही है तो फिर माफी क्यों मांगी जाती है।
ये सब राजनैतिक दल देश की जनता को मूर्ख ही समझते है। जो समाचार पत्रों मे ये मीडिया मे दिखाया जाएगा जनता उसको सच मान बैठेगी। अगर ये मानस है तो वाकई मे जनता मूर्ख है। विपक्ष को सत्ता चाहिए इसलिए वे मान सम्मान को बेच सकते है , उनको सत्ता चाहिए तो देश मे भाई भाई को लड़ा सकते है। उनको सत्ता चाहिए तो पंजाब में उनकी नाक के नीचे खालिस्थान की गतिविधियों को नजर अंदाज कर देते है। सत्ता चाहिए तो दिल्ली मे दंगा हो जाता है, ये सब का एक ही मर्म है की सत्ता के लालच मे संवेदनाओ को खत्म कर दिया है।
चलो अगर मोदी जी अनपढ़ है तो थोड़ा केजरीवाल ये प्रकाश डाले कि एक अनपढ़ आदमी कैसे इतना ज्ञान रख सकता है। सत्तर साल की उम्र मे कैसे 18 घंटे काम करते है, देश को एक सूत्र मे बांधे रखा है, विदेशों मे भारत की शान बड़ी है, देश G20 देशों की मजबानी कर रहा है। देश जिस नेता को विश्व नेता मान रहा है अगर वो अनपढ़ भी है तो ये तो हमारे लिए फक्र की बात होनी चाहिए की पढे लिखे न होने के उपरांत भी वे लोगों के दिलों को जीत पा रहे है और भारत को विश्व पटल पर सम्मान दिला रहे है। बात मोदी जी की नहीं है उस पद कि हैं, जिस पर वो बैठे है, उसका सम्मान जरूरी है।
मेरा केजरीवाल जी से अनुरोध है की इस तरह के बयान केवल गर्त मे जाने का साधन ही है। देश के प्रधानमंत्री का अपमान देश का अपमान है।
मुझे नहीं लगता की ये सब भारत जैसे पुराने सांस्कृतिक और लोकतान्त्रिक देश मे होना चाहिए। आज इस तरह की जो भी अशोभनीय घटनाए हो रही है उसके पीछे एक ही सोच है। अंग्रेजों ने अपने प्रभाव को उनके जाने के बाद भी रखे रखा। अंग्रेज नहीं चाहते थे की भारत कभी एक हो, इस कारण वामपंत की जड़ों को रोप गए। देश को क्षेत्रीय आधार पर , जातपात, रंगरूप, भाषा, धर्म के आधार पर राजनीति करने का अधिकार दे दिया। उनकी इसी सोच और बांटो और राज करो की नीति को पोषित करने के लिए तीन सौ से अधिक राजनैतिक पार्टीय देश मे कार्यरत है, और वे सब संविधान के तहत चल रही है। धर्मनिरपेक्ष है, हालांकि हिन्दू धर्म मे भी अब बंटवारा हो गया है। हिन्दुओ मे से निचले तबकों को निकाल दिया है उनको बहुजन या दलित नाम देकर एक अलग पंत इन लालची पार्टियों ने बना दिया है। हिन्दुओ से जैन, सिखों को तो पहले ही अंग्रेजों ने अलग कर दिया था अब, और भी पंथों मे बांटने के त्यारी है। आगे चलकर ब्राह्मण, राजपूत, कायस्त, बनिये सब अलग कर लिए जायेगे। पर देश पहले है, अंदर कुछ भी करते रहो, लड़ो , गाली गलोज जो करना है करो। पर जब देश को तोड़ने के लिए बाहरी ताकते किसी को लालच दे तो भारत के हर नागरिक को अपने अपने मत भुला कर एक होना चाहिए।
आज वही हो रहा जो अंग्रेज चाहते थे , आज भारत को मतों,मजहवों मे बांटना आसान लग रहा है। ये सब हो रहा है देश मे विध्यमान क्षेत्रीय पार्टियों और उनके मंतव्वो के वजह से।
अगर देश मे दो दलीय प्रणाली स्थापित हो जाती है तो देश विरोधी ताकते अपने मंसूबों मे कामयाब नहीं हो पाएगी। दो दलीय प्राणली देश के लिए अब बहुत जरूरी है। तभी देश के प्रधानमंत्री के पद की प्रतिष्ठा बनी रहेगी और देश सुरक्षित रहेगा।
वरना देश मे छोटी छोटी राजनीतिक पार्टियों पर देश के दुश्मनों का अजेन्डा चलता रहेगा। मोदी जी अनपढ़ है या नहीं इससे फर्क नहीं पड़ता बल्कि प्रधानमंत्री दूरदर्शी और संवेदी है वो जरूरी है। देश से बढ़कर कुछ नहीं है। देश ही नहीं रहेगा तो राजनीति कहाँ करोंगे मेरे नेताओ। इस पर विचार करने की जरूरत है हम सबको।
How can one justify the burning by the startups? I don't want to mention the name of startups or B2C commerce players who are trying to bring discount war and luring consumers just for nothing. Is this an innovation?
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Take this incident that occurred in the city of Jaipur.
Four days ago, my neighborhood friend told me about a start-up that is delivering #saras and #amul milk at a discounted and below market price, providing a 7-day free milk scheme. I tried to go in to find out more about it and when he showed me the transactions it was actually there. He bought milk for 350 rupees free of cost in 7 days. and later, he continued but with a discounted price. Saras milk price is Rs. 48 per Ltr for toned milk and for fat, it is Rs.62. He is still getting Rs.2 per Ltr discount from the market price ie. price at Saras booths are selling at.
This is what the consumer is gaining from such #disruption.
Yesterday I went to a nearby Saras stall to buy milk for myself. I started the conversation just to find out what he thinks about these new milk delivery startup/e-commerce players. Suddenly he burst into great pain. He said that two months ago his daily sales were 35,000/-and about 250 customers used to come and buy milk at his stall, but now these numbers have dropped to 22,000/-per day. what was your intake? he said, due to inflation, people started consuming less milk, and that's why his daily sales numbers are going down. But he wasn't aware of the online customer drift. I told him the real reason why he is affected.
This is how the market works and there no one can control the market forces to be favorable, but at what cost are these developments happening? Saras is the milk brand of Rajasthan dairy cooperatives which has more than 5,500 milk stalls supplying milk to more than 0.7 million families in Jaipur city and more than 5,000 small retailers.
Just to facilitate or for the sake of adoption, these startups are doing quite a bit of burning. Just for the sake of offers, end consumers are buying milk from them. Even if a family has 5 members and they all have smartphones, one after the other they are using the offer in the same place. It means that a family is getting 35 days of free milk because they are offering a 7-day free milk program. Is this a way to create loyalty? or adoption or customer acquisition cost?
We all know that the Indian ecosystem is different and it is full of diversity. Amid such uncertainty of the diverse mindset of end consumers, how long do we think about customer stickiness? and at what cost by giving a big dent in the traditional ecosystem.
It would be wise if such startups are getting profit out of such activities then fine but they also know that their efforts are not real and just an act of building a funding story. I am worried about the traditional players who are there for decades and earning bread and butter for their families. 1/3 of India's population is living below the poverty line. Millions of Retailers, Wholesalers, and distributors are the backbone of our retail ecosystem. These are the 12-15% contributor to national GDP and even they are contributing up to 10% in generating employment.
The ecosystem of Indian grocery retail: Estimated Retailers 12-13 million, Wholesalers 300K+, Distributors 30+, and more than 5K national brands and thousands of regional and local brands. Altogether they are driving a retail economy of USD 800 billion and would be more than $ 1.2 trillion in the next five years.
We need to redefine the definition of #disruption. Do we really need #quickcommerce #homedelivery of milk #fruitdelivery? Is it really needed to have merchandise in 10 minutes? It would be better to walk to your nearby retailer and buy from there. This will be a healthy movement for the body, society, and for the nation.
We need to bring ideas, innovation, and efforts to empower the existing ecosystem. We should not create threats to them but tune with them and align our business model in such a way that brings efficiencies and empowerment for the traditional ecosystem players.
Being a retail professional, I am sure that the traditional ecosystem will get more wings to grow in the near future. Here the only thing is that MSME or SME needs to bring more clarity that how they are going to formulate policies for traditional retail ecosystem players. The Department for Promotion of Industry and Internal Trade (DPIIT) should also bring in some strict norms so that online players operate in a regulated environment and do not affect traditional players just for the sake of discounts and promotions. Also, all retail associations should work in the right direction and should safeguard the interest of traditional ecosystems. Organizations like #rai and #cait should act as the apex body but seems they are more inclined towards these giants and nurturing them by doing nothing for the traditional ecosystem.
Even domestic e-commerce players should also bring under the disciplinary ambit of DPIIT and they should not be allowed to start a discount war on their websites.
This also applied to brands. Brands have to bring discipline in channel management & bringing uniform PTR so that every connector in this ecosystem can earn their share of profits. This would be a red flag for national brands whose PTR is in the hands of price cutters. If they fail to harmonize channels, they will be locked out and replaced by the regional players.
We are regularly updating our knowledge on various aspects of our business, its facts, and figures. Since we are professionals and working in business environments so there we have to be equipped with the current affairs of our ecosystem.
💥I am working in a Kirana startup ecosystem and also heading a startup in B2B grocery retail so there my daily routine is to keep myself updated with the latest developments and maintain the information flows. Like me, there are many professionals who are closely following the stream. Things are related to startups, investors, and the ecosystem. No doubt things were moving in the retail ecosystems since 2014 onwards in the right direction and a big buzz is there in terms of investment and turning startups into unicorns. Startup definition in layman's language, Startups are those who do execution with speed, and how fast they were able to achieve the status of a unicorn or smart valuation was the basis of success. Huge money was pumped by the VC funds, angel investors, family offices, and HNIs which helped more than 75 startups turn unicorns in the last three years time. I am fully convinced of the things that were brought in by the innovators. But, We are bound to certain fundamentals and basic Laws, so the same is applied to businesses where things are very much driven by few fundamentals. The fundamental law of business is to earn profit from business activities through whatsoever practices. Let's jump to the preamble of this article " Ignorance of Fundamentals by the Startups and how they sidelined it"
👉Startups and investors both started working on some easy conversion approach which led towards meanless directions somewhere. I am going to let you understand the fundamental approach in layman's style. This will surely match with the ongoing practice of the ecosystem stakeholders. A few things remain constant which we called by fundamentals so the same is applicable to Startups and investors both.
Inside of Investors and how they forget to apply fundamentals of investment:
Investing is simply the process of acquiring assets that you hope will grow in value. Investments can include owning a home, owning a business, owning real estate, or having money in savings accounts and CDs at a bank or credit union. Investors in the startup ecosystem have some different theses. Investors do have many theses to work on but again they are concluding their decision that out of 10 investments they will succeed to get a handsome exit in 2 or 3. This means 7 or 8 investments will go in vain and will be a failed decision. Here somehow they are breaching the fundamentals of investing and driving them in the direction of such thoughts. Here my question is why out of 10 investments, 2 are getting successful and some many cases even this is also not. And if such things are there then what is the use of evaluating the startup, asking for an Investment Deck, and carrying strict Due diligence? 💥and
If the startup business model is so convincing, disruptive, and scalable then how things go negative in near future?
This shows that the fundamentals were not analyzed before shortlisting the startup and evaluating them or what about the business model of the startup they believe it will run and will do best in near future. Why am I stressing about this? Every business has certain set rules which have to be followed religiously, these rules are the basic principles of that business stream. I am not talking about completely IT-driven business models or ideas that can operate certain businesses on the cloud with nothing physically running on it.
But, again if there is the physical movement of goods and services in the business model like it is in grocery eB2B retail then one cannot ignore the fact. An investor needs to differentiate those things while finalizing startups for further-stage investment proposals. If any real business is growing on the ground then it will take time to reach a level i.e. to reach a scale or become profitable. There are no shortcuts to making them successful overnight or say in two, three, or five years. awesome? How can a VC expect 100X returns or 20X, or 10X? Just think about the cost of that money investing in a startup for a given period of time and calculate the return. The shortcuts are good if they help to save time and money but business fundamental works on certain laws.
The calculation of interest over market risk and its return is the soul of investment. A 5x return is logical if the primary work is done thoroughly by the investors before investing in a startup. If you being an investor don't believe in the idea or you are thinking that 80% of the investment will be completely devastated and you will make your money from the rest of the investment in Multi X returns then don't invest.
Investment is not gambling and investors should not be gamblers
My above thoughts would give a contrary impression of the present scenario. But, let us not forget that the current landscape of investment in the startup ecosystem is mount formation. Currently, the law of 👀FOMO is operating in the ecosystem and no one wants to be left out of the race. This show of changing caps is in the stream. Early-stage investors want to hand over the hat to the big one and this goes on till the startup either succeeds or fails. One needs to think deeply. The same is going with startups.
Fundamental of business that startups are not following.
Startups too have some shortcomings or failures on the ground of applying basic fundamentals in their business model. There are startups that are really working on some problems at large and through their innovative ideas, something good has been built. We can talk about #Zarodha#Groww#cardekho #Shopify#Swiggy#Zomato. They definitely brought disruption in their area of exploration. In a true sense bringing disruption in the segment is a kind of outcome by the Startups. If we analyze deeply the inside story of successful startups, we will find that they are totally IT-driven businesses and without their stack or involvement business processes can't take place. I would categorize them as Startups working on the cloud. However, in the case of Swiggy, Zomato, Dunzo, etc and other delivery startups will have profitability challenges but they are creating adoption and consumers take them as granted. Again fundamental of these businesses has to be taken care of.
Business fundamentals are logical and have the compulsion to fit them in the business stream before ideation, implementation, and execution.
If your startup is involved in the physical movement of goods whether it belongs to grocery retail or other retail formats, you have to inbuild them on your own to tune with some set of market conditions that are prevailing in the market and no one can bypass them. The cost of changing existing conditions is very high. Let's understand this equation through a real-time example. Startup ABC is working in grocery retail. They got the idea of building an online marketplace for grocery retail, Built a high-stack IT solution for the stack holder. It is a seller marketplace model. The model is called eB2B online marketplace, onboarded thousands of Kirana Retailers on their IT platform, and started reaching them through Mobile App. This is a kind of Direct to Retail Model. Why they thought of bringing this kind of change into the ecosystem as a new idea and how it helped them to raise money? Definitely, Startup ABC found some gaps in the market, Problem was large so they started working on a solution. Filling up the gap and finding solutions. In their pitch, the startup is working to empower Retailers by way of providing them with one umbrella solution as a Supply Chain Aggregator. DTR model removed the middle distribution channel resulting increase in margin. This is how a new idea takes place and the same is with other eB2B startups or even B2C or D2C or Agri startups. In these kinds of startups, there is the physical movement of goods involved at each stage.
Now, what happened wrong to this business model? I don't want to mention the name of startups working in this segment. You know them, but the question, again and again, is why they are not making profit despite raising huge money, even burning the entire amount, and also scaling to other territories like crazy. They tried to convince investors that their business model is scalable and profitable.
Here is the answer, they failed to incorporate the fundamental of such businesses that they tried to disrupt through the innovative business model and intervention of costly IT tools. What are those fundamentals:
Lack of Business Mindset
Half of knowledge is dangerous
Trying to change the traditional miniature practices of market
Managers are driving the low-margin business in high profile style
Burning money on adoption.
IT-driven business is for unfriendly IT users like Retailers seldom use.
Founders are highly paid without bringing profit to the organization
A lack of a Business mindset is the first fundamental requirement for a business. The founders should have a business-mindedness or else they will become puppets in the hands of the investors or their KMPs. Mere finding a problem in a certain area and working on it through KMPs will lead to a possible failure. A business mindset founder protects the business by predicting near-future trends based on his inherent capabilities. This helps them to align their business strategies on time. In the current startup ecosystem, founders are not of that mindset or I would say most of the founders are technocrats. They firmly believe that an IT-driven business model will scale and will be the valuation driver. The business cannot be projected the way IT can run it. It has to go through the market conditions and accordingly needs to be coordinated with the business owners.
Half knowledge is dangerous: Skill-driven founders are willing to disrupt retail based on some logical business verticals, but for physical business, they must have a deep understanding of market conditions and business terms in the first place. The skill set is more likely to be the first choice of professional investors as they have the ability to grow a loss-making business and increase valuation and even turn it into a unicorn. Half the knowledge of market practices by the founders is dangerous and ultimately the ground-level work does not synch with the projected one, resulting failed venture.
Trying to change traditional business practices: Let's talk about grocery business or FMCG business in India. Both streams are being carried by a series of middlemen. The margin spread is there to feed all of them in their stage of execution but that is too much narrow. In the FMCG business- Brands distribute their products to retailers through CFA, SS, distributors, and then retailers. Retailers further sell to final consumers. In the staples stream, this is done through local mandis, traders, and wholesalers/ Semi Wholesalers.
What is the harm in it if one is trying to bring solutions for the retailers and provide them with one umbrella solution? This question will come to the readers. But, a major point here is that the basic principles of traditional practices were violated. Generating margins is a big deal in grocery retail but an existing traditional channel of distribution is making money from this low-margin spread by keeping its shows on a low profile. “Remember – the cost of running a business through managers is always a costly affair but running it through existing owners is always cost savvy and effective”. Distributors, SS & retailers are owners of their businesses. They are working in a very low profile and master of earning profit from its thin margin basket.
Another main reason for not making a profit is: Squeezed margin - Brands are not giving preference to such startups as they do not want to disturb their existing channels, however on the same way, they do not want to lose the opportunities that these startups are bringing, however here they are not sacrificing on the margin side. In some cases, they did so but again had to roll back their decisions amid strong opposition from existing channel partners as channel conflicts broke out.
I am giving stress on this point because this is one of the major aspects and practices where startups are hammering. As an eB2B startup, you have asset-heavy operations in terms of heavy opex, cost of setting up systems, and processes. based on analyzing the financials of existing eB2B players. How they will earn from a thin layer of margin is again subjective but if someone is there who is bringing operation excellence and capabilities will definitely earn profit and make their startup a real business.
Managers are driving the low-margin business in a high-profile style: The managers are managing the show of the low-margin business of various startups as they are not working with the existing middle distribution channel where the owners are working. Getting work done through managers is always expensive, whether the traditional distributors are working at a low cost and earning profit and matching ROI. Setting up systems and processes always attracts a good number of cost components. Metro Cash & Carry, Walmart, and other heavy Capex and Opex run models are examples.
Burning money on adoption. India is not a country where we think of bringing change in all spheres as we are living in different walks of life where there are different demographic changes in our religious thoughts, food habits, tastes, customs, and even in society. The business model of a startup is based on certain principles of optimization. It refers to the process of changing the product in which it is made, to meet the needs of customers in a market other than that in which it is made. This means changing products to bring about customization in the long run and that brand has to spend heavily for free sampling or up to a level where demand can start spontaneously. But, India is a country of diversity, and spending to bring about adoption is a costly affair. No one can change the behavior of Indian consumers. A startup always failed to meet the hyperlocal requirements or they are not able to align with the diverse requirements.
IT-driven business is for unfriendly IT users like Retailers seldom use. Startups are getting funded based on their IT stack as VCs are investing in startups where IT is the product and the main driver of the business. But, one-third of India's population is still struggling to meet their daily needs. As per the current data, only 43.5% of mobile users are using smartphones. 40% of grocery retailers are using basic phones or they are using basic features of smartphones. This means that people are still unfriendly towards smartphones. Startups are trying to bring use cases where their end consumers can start using their smartphones to order goods. This adoption happens when we talk about B2C marketplace but it is not the case in B2B. What if you are working on a solution that the end user is not using. According to a market survey, only 30 out of 100 retailers are using B2B startup App to order merchandise, with the rest relying on the foot-on-street manpower of those startups.
Founders are highly paid without bringing profit to the organization: The fundamental crunch is once again seen in this, & and the founding team and KMPs take home a large amount in terms of salaries. The basic rule of business is that promoters should take cash from the business for their personal use only when the business is making a profit or can take a minimum amount to run their family's daily bread and butter but in most cases, startup founders are using to build their personal wealth. Most of them are enjoying a hefty amount of salary, accommodation etc. This is a layman's argument about how a loss-making startup is letting its money go out of its cash flow. Startups are struggling to get funds but founders are investing in other startups as angel investors. Startups like Paytm, where investors' money evaporated within a year of their IPO launch, but individual founders are running their own personal wealth funds and investing in startups.
There are many other points to elaborate but a question always will be raised by professionals why is the ecosystem not following the basic fundamentals of business? Investors and startups need to think about the basic rules and fundamentals. Disruption is not what comes with success rather it disturbs the existing ecosystem at large if certain basic principles of business are not followed. And the cost of disorganizing the existing system is huge which eventually leaves ashes of burning money behind with a tag of failure.
Ignorance of fundamentals is tantamount to ignorance of the law which will not bail you out on the basis of ignorance of the law. The same logic applies in the business where the ultimate objective is to make a profit. And making a profit from the business is always an art and some fundamental principles have to be followed.
We are operating in the Food & FMCG grocery retail ecosystem in India. As an emerging organization, we carry the business fundamentals and startup mindset of innovation in our business model. Our focus is on building a technology-enabled platform for brands, distributors, wholesalers, and retailers. Taking the grocery retail ecosystem with us at every step for their empowerment so that we can contribute to building a $ 5 trillion ecosystem in the coming years.
A Layman write-up is written by Balwant Singh Rana, the Kirana Retail professional
The purpose of this article is to bring more clarity about the CPG segment and how we can go with the new definition. Why do we need a new definition for the CPG segment and how it will affect its status in the coming years? Same way how new brands in the food segment will affect the CPGs bandwidth and its definition for more coverage.
Meaning of CPG brands: CPG stands for Consumer Packaged Goods and is used to describe products that have to be replaced every so often due to their daily/weekly use. Examples include food, clothing, apparel, and beauty products. Now this definition goes a little refined as many food brands are now available in consumer packing which means they are fast-moving in the hands of retailers’ / end consumers. We will consider this topic a little bit centric on Food & Grocery brands under the CPG regime. Fast-moving consumer products basically referred to products available in consumer packaging which move fast from the retailers/ commerce platform and are consumed fast by the consumers. I have my views on the CPG market and how it will change the new shape in near future.
The FMCG market in India is expected to increase at a CAGR of 14.9% to reach US$ 220 billion by 2025, from US$ 110 billion in 2020. (As per Brand Equity Foundations). Here we have to understand which companies /brands are representing the Indian FMCG market so far, $ 110 billion market is like a tip of the iceberg. " We have to include the full iceberg" in the definition of CPG. The size of Indian retail is expected to be around $1.2 trillion by 2025 so we can see the share of the CPG market, as on today market size of CPG is $110bn which is almost 12% of the total present retail size and 50.9% of total Food & Grocery retails which is somewhere around $611 billion and will have $978 billion size by 2025. CAGR growth is estimated to be around 14.9% by 2025 Further, according to “NielsenIQ’s FMCG Snapshot for Q2 2022, the FMCG industry has grown by 10.9% in the quarter ending June 2022, versus 6% in the previous quarter. Also, the consumption recovery and promising macro factors indicate a double-digit growth for FMCG in India, in 2022” As per the data available on websites or open source more than 5000 brand companies are active in India, among them 345 companies have national level or regional level presence and those are the highest contributors in terms of business volume. Top 50 FMCG national-level brands: this list only covers 30+ brands.
Many more companies are there, FMCG companies there like Ds group, MDH, Everest, etc...... These include major 50 brand companies at the National level. Above 30+ brands in the CPG segment contribute 20-25% of total CPG’s $110 billion-plus some portion of staples like branded staples Aashirvad, India gate /Fortune as national brands. These brands cover major categories like Personal care, confectionary & snacks, Beverages, Home care & Staples. I have not taken the Dairy & Frozen, F&V segment in this article. We are talking about CPG’s contribution in India, it is widely driven by the top 50+ brand companies. What about the rest of those who are either active at the regional level or local? Even some other medium size players are waiting to explore the Indian CPG market as Joy brand did. Like Patanjali came aggressively in this segment and now giving tough competition to national-level CPG companies. Corporates like Adani, Reliance Jio, Tata consumers, and others are planning to introduce themselves as big CPG players. Reliance Jiomart already started working in this segment and started setting up distribution channels aggressively. Last few years they have been working across categories and succeed to develop their private label in various categories. the purpose was to go with their private label in a big way in general trade. Same way, Adani Wilmar is working in this segment and also other big box retailers are going to join the FMCG drive. The near future era is going to be a battlefield in the General Trade (GT) market stream and there they will try to establish themselves as CPG brand owners. The Axis of the change is the consumer's changing preference and the consumer's behavior of changing the product is supporting it. Today’s consumer does not mind trying different brands, especially in the
Food category.
5000+ companies in Personal care, Confectionary & Snacks, Beverages, Dairy & Bakery, and Home Care are prevalent in India. They are among the brands contributing 80% to this segment. I don’t have a relevant data source from which I can get the brand-level penetration of food products as this segment is a highly unorganized sector but soon going to become part of CPG in India. How it will happen? The answer to this is "Change in consumer preferences", Brands evolved themselves according to the need of end consumers, and keeping in mind the buying behavior of the medium to lower class they are coming up with product innovations in terms of quality and packaging in a fast-paced manner.
The way non-food came in sachet packaging like shampoo, hair oils, and other personal care products we can expect that one day we will have edible oil, sugar, tea, and mixed spices in the same way. We have more than 300 million people living below the poverty line and a majority of consumers are buying their food/staples on daily basis. They don't have a budget to buy the ration for the whole month. I believe, soon food will be available in sachets or small consumer packaging, so the definition of CPG is going to evolve. CPG definition seems narrow when we talk about the products. A standalone brand in a consumer packaged product that moves fast in the market or is heavily demanded by the consumers is something called FMCG/CPG but in India’s scenario we need to enlarge the coverage of this definition, soon you will find that regional food brands will also come in this definition. We have seen how the main staples/ food were sold in India in earlier days. We don't need to go back much but 15-20 years back food like main staples used to sell in loose by the retailers. RATIO was 70-30% i.e. 70% bought by the consumer in loose and 30% was the contribution of Packaged food. Major staples like Rice, edible oil, Sugar, spices, Dal, etc were sold loose to the consumers but now these come in consumer packs. However, one thing, we need to understand, India’s population lives in rural areas, and still, there 50% market in the main staple is largely dealt with in the loose form. Here we are covering the study up to Tier III. Logically, we have to include them under CPG brands, and if we do this what will happen? The market size of CPG brands will increase to $ 600-700 billion from its existing $110 billion because of the contribution of the packaged food segment. Food is contributing 60% of total grocery retail. The current size of food & Grocery is around $611 billion as per https://www.researchandmarkets.com which is expected to grow to $ 978 billion by 2025. Taking this figure of $978 billion out of which the $ 220 bn market will be catered by the pure play FMCG brands by 2025 majorly contributors of those were the top 50 national level & top 100 companies of regional level under the segment of CPG/FMCG. As per the market data CPG market will have a $220 billion size by 2025, i.e. 23% of total grocery retail, but, we will have 78% market which is full of opportunities for our new regional & local players. For ease of my write-up, I am taking Food & Grocery in the CPG which will have $978 bn market by 2025, and accordingly will talk about it here. Again refining it to a digestive level I can forecast that 30% market will be driven by Staples in Bulk, upto this size let me be conservative.
we will have a $685 bn evolved CPG market size by the end of 2025.
( $978bn - 30% of $978bn= $685bn).
Who will be the contributor to this rally?
Interestingly, in recent years, we have seen tremendous development in this segment. The startup ecosystem is also giving acceleration by way of bringing technology-led disruptions. We have seen brands directly approaching consumers, these D2C brands are creating a big funnel. Brands like Mamaearth, beardo, Nykaa, and Sugar cosmetics are doing wonderful, as per market sources more than 800+ D2C brands are available in the Indian grocery market. Likewise, regional players are introducing their products in various categories. On the other side, eB2B startups are working directly with retailers and claiming to give direct reach to brands. As per the eB2B startups, Brands do need not to work for the development of their distribution channel. Startups like Udaan created a big platform of retailers through their 35+ state-level hubs. More than 1000 eB2B startups are working in bits and pieces across the country but still, they are not able to place new brands at retailer’s stores i.e. offline/GT. Traditional distribution plays an important role when we talk about wide coverage and penetration. Here would like to mention that we should not take the success of D2C brands as they are penetrating through e-Commerce marketplaces but, has limitation in scaling business volume in the short run. D2C brands also start facing problems in terms of visibility which customers want to physically check, look and feel. I will cover their problems in my next write-up. So far 5000+ brand companies already working in various segments. Some of them are at the regional level but most have a presence in their local territories. During Covid i.e. the year 2020 and post-Covid it is said that more than 10000 FMCG & food brands came but 90% of them could not do much or could not make them sustainable, resulting in leaving the market before taking their first breath. (it is an estimate, however, there is no reliable data available)
Why did this happen to them? What are the challenges they have to face or they could not make their way long?
It is very imperative to understand the root cause. If I am a manufacturer or a brand owner my aspiration will be totally to create a brand that will give me a good name, fame, and profit. I will go with the traditional and modern distribution system in the country and will make my brand available at each Kirana store/ standalone supermarket and online availability i.e. will have an Omni channel presence in the market. Still, there is a long list to outline the problem side but I will start with the following points how these issues make a stuck in dealing with these problems and what is next with them as a solution. Making a product market fit always remains a challenge for new brands but it is going tougher day by day because of new developments by the big corporate houses, startups, and emerging corporates. The Challenge of competition is good but if big fishes are in the pond then we will have to understand the situation of small fish also. This will have happened to them and it will remain there. It is up to the brand to choose the best distribution channel for their products but sometimes it depends on the nature of the products and how strongly it is placed in the overburdened category. It is always advisable to go for a thorough market survey before a manufacturer introduces their products to the market. Many marketers now talk about working with Omni channel, i.e. brand has to be everywhere from offline to online and vice versa. That’s why I mentioned that market fit should cover all these topics well before introducing the product in the market.
Let’s put some focus on the problem side faced by the brand manufacturers or brand owners in making their product-market fit. · Challenge in creation of traditional distribution channel – Business / ROI · Indifference mood of retailers is a placement obstacle – Space & competition · Conflict between market channels – GT/MT/E-com · Manpower is one of the big issues – retention · High demand creation cost – Pull strategy · No call for action medium available in an initial marketing campaign – Focused marketing strategies · High cost of Technology intervention - Sales order application & Data Analytics · Impatience behavior of brand owner - Valuation, aspiration to make the venture successful in a short time. The first challenge is when we are going to identify the potential distributor(s) for our brand/product. There you will find that the selection process is very time-consuming and it needs rounds of meetings and getting into the boat of distributors. Since the distributor is facing their existence issues working with the existing brands, Struggling to match up the ROI, somewhere insecurity is there in their mind. As a brand owner first of all you need to download the brand vision to your potential distributors and should assure them that your brand is going to add value to their business and you will work on streamlining the processes and will bring ease of doing. You are there with them, may talk to retailers and convince them to provide space at the retailer’s stores and further will assist them in demand creation. More than product retailers need commitment From you. In this, do not create channel conflict in the first go. Go one by one. Omni channel no doubt is an opportunity for you but your hurry will make your brand out of the market sometimes so there you have to go wisely. Follow the steps:
Don't be the frog of the Well.
The journey of any new brand starts with the native city of the promoters. As a businessman or entrepreneur, you are following the business process and marketing practices and accordingly did the pilot run. If your product is a 'minimum viable product' and passed all the necessary market fit exercises then definitely you are working in the right direction. Earlier say 15 years back, brands have to go with GT stream because there was no modern trade/ E-comm penetration available. Don’t copy others, copycat always lags behind while making their strategies. Firstly: If you are doing general trade (GT) in the open market in your native city, then you should not go there for channel conflict i.e. not go with modern trade placement or e-com platforms like Amazon/ Flipkart. Do not place your product with supply chain aggregators eB2B platforms however, it depends on the volume of business. Everything depends on the pace of executing things as per the strategy. Second: You should not be like the frog in the Well. If you are working great in the GT market, then you don’t need to go with other channels with the same product SKU size & pricing. If your same product is available everywhere but there is price variation at the end of consumer, then you are going to cannibalize your brand. Try different product sizes and MRP if you want to place your product in modern trade or e-commerce platforms or other marketplaces. This will help you to maintain the pricing and your large market i.e. GT will not face price conflict. Always avoid conflict between market channels. Third: My suggestion, is don’t be part of the crowd, go out to another market, and try your product in an e-commerce platform or modern trade. The same is for small brands to go with selected A/B retail stores and standalone supermarkets in said market. If you have good liaising and you can convince modern trade retailers or e-commerce platforms you can place your product there. This will help new brand owners to create awareness among consumers. Centralized marketing expenditure will help you to leverage from there. Don’t be frog of the same Well. Lending: Another main key driver of distribution is lending and logistics which the distributor has to do, in the current scenario, his main job is lending and logistics. But, the market took a different shape post covid in a different direction. Distributors are not interested to take credit exposure from retailers anymore. I have seen it in tier I & II cities. Almost 50-70% of sales are happening against COD or PDC maximum of 7 days. This is going to be a hurdle for new brands because without credit exposures Retailers are not going to entertain them by not giving space in their stores/shops, and even personal relationship of distributors is not going to work, hence the placement of these brands will not happen. Here you have to take a calculated risk on account of providing adequate credit to distributors so that the same thing they replicate with the retailers while making sales. However, again time will come for old practices to follow. The distributor has to follow the SLL ( Sale, Lending & Logistics) process if they want to remain in this line of business otherwise soon companies will go with the eB2B startups but still it will take a minimum of ten years or more to have such changes. Expanding by 2030 50% of traditional distributors will emerge as organized distributors and big organizations will come as distribution aggregation platforms. RTV Policy: The third one is dealing with the RTV (return to vendors). Retailers don’t want to entertain those brands having no RTV policies. They don't want to be the shit cleaner in case brands have no demand or it gets expires on the shelf. In the current era, distributors are not in the mood to test the market and suffer losses due to the goods' returns from retailers. Here brands have to come with open minds and should clearly communicate the RTV policy to their distributors and retailers. Take risks, and build margin in your products so that you as a brand can sustain the setback of expiry products. Inventory burden: Forth major pain distributors have to suffer from is carrying stock levels at their warehouses. They are working with various brands, and as per the nature of product and consumer demand, they have to maintain a minimum stock level at their warehouse. Sometimes they have to work with 15 days’ inventory cycle which is high if the said distributor is doing a sizeable business in the territory. As a brand owner, you will have to understand the pain point of the distributor. Hence try to maintain an on-demand stock replenishment system and how quickly you can build a robust supply chain. Dealing with various stakeholders: Though this is related to the personal issues of distributors we have to understand how this is going to affect the external stakeholders or also to distributors in a big way. Sometimes we don’t evaluate the time factor but it matters a lot when it is related to a businessman or entrepreneur. After all, time is money. Distributors are working with 5-10 brands because without if they are not able to maintain their ROI, they will be out of it. They are dealing with say 8 brands. Naturally, the Area sales manager/ ZSM/brand owner/ Salesmen of these eight brands stay in touch with him on a daily basis because each one has their own interests, market developments, and interactions with business prospects. Dealing with various company personnel and sometimes they involve in BTL marketing activities like POP deployments at retail stores and arranging market visits for company officials. I will request you to sit for at least 3 hours to 4 hours at your distributor’s office. You will see, he is only communicating with the officials where they only talk about the target, scheme, and beat-wise sales strategy. So, hardly they don’t spare time to think about their business and its future development. I mentioned this thing here so that at the time you are going to select your distributors you must know how many brands he is dealing with, and go with small & mid-size distributors. Instead of daily follow-up with the Distributors go with a weekly session if you are an ASM/ or working as RSM. Or you have to go with aggregators who are doing DTR as organized distributors. Marketing Support: Placement of products either at the distributor’s warehouse or retailer’s store by the distributors can be done initially using the personal reputation/relationship of your distributors but what is thereafter. As brand owners, a few companies are working on aggressive marketing support which they provide to their distributors and helping them wisely. But, many distributors go out of sight just because some brands do not understand the importance of marketing/demand creation/awareness in the focus market. Forget about building a brand if you are not doing demand-creation activities. In this dynamic era of marketing, everyone has to spend 50% of capital/ share of profit doing various activities. So plan your marketing wisely. Hire a good marketing agency that will guide you and will do the required PR activities at a marginal cost. Don’t hesitate to do this even at a low cost or being low profile.
The retailer is king and playing an important role in the hyperlocal & last-mile Supply chain, he will remain king even after Indian retail turn 50% organized. Retailers shall remain forever
Retailers are playing an important role in grocery retailing. Retailers know everything about their consumer, their shopping habits, customs, rituals, festivals, and financial status. As per open market data, 14 million retailers are part of Kirana retail in India. These mom & Pop stores/ Kirana stores are BIG contributors to our national GDP, something around 11%, and also one of the largest employers, contributing up to 8%, thus, we can understand the importance. Still, Indian grocery retail is dominated by these unorganized retailers, 95% market is in the hand of these Kirana retailers (for overall retail it is 85%). This would be an irony if we talk about their poor infrastructure, have you seen them working in a 150-200sqfeet shop, filled with 350-500 SKUs and so much unorganized in terms of merchandising of goods? We can see the development happening in other formats of retails but why Kirana retail is still so unorganized? Various Eb2b STARTUPS are claiming to empower them in various ways. The retailer is running his store in the same space which he was running 20 years back or 15 years back when there were limited assortments and limited brands. Now, after the emergence of technology and tech-driven marketplaces, and globalization of the supply chain, there is a change in consumer preferences and habits. Brands emerged and evolved themselves as per the need of end consumers but the main partner of the whole supply chain i.e. Retailers is still living in the old era. Despite various development going on in this segment but Retailer is still in the middle of a dilemma and finding himself surrounded by various consumer-driven developments. This has brought some stiff competition for him and day by day losing business. The main culprit of his unrest is the online commerce and big box i.e. standalone retail giants like Reliance Smart, D-Mart, Local-Mart, Ratandeep, Vishal-mega mart, V-mart, and many other standalone supermarkets, and now a big threat is coming in the form of Q-commerce, an impulsive need base supply chain. The main points of Retailer’s indifferent moods are: · Diversion of end consumers to other platforms - Business loss due to low product assortment & unhygienic condition of the store. · Limited Store size – Limited Assortment i.e. not able to fulfill the evolved need of consumers. · Limited Working Capital cycle – Cash payments to Supply chain partners · Erosion in gross margin due – Not getting good deals from Brands · Store is unorganized – need to revamp / Facelift The above main Five elements are making him negative, however, a long list is there. He needs energy from the inside to do something new. New CPG brands definitely bring good taste to his margin but the limited space of his shop and indifferent mood is making him annoyed all the way. New Brands owners need to first identify a good channel partner who can extend adequate credit with a feasible RTV policy to retailers then only retailers will show interest in onboarding new brands and provide product placement and visibility at their stores. In nutshell –
“Dhanda rahega to aatmvishvas bana rahega, Deemag open rahega aur naye development honge”
When we write something on Kirana retail, many things cook simultaneously because various developments are going on there and the center of the axis is the Retailer who is most affected, without his intervention Brands will not go large in market coverage and will not penetrate to the last consumers.
Stakeholders involved in the retail distributions are:
CFA | Super stockiest |Distributors | Vertical |Retailer | eB2B Startup | Horizontal | D2C | Quick – Commerce | Social Commerce | Super & Hypermarket stores | Online- Marketplaces | B2C startups | Price Cutters | Wholesalers
Equation Retail = 85% unorganized + 15% Organized
Technology Intervention and associated cost
We can’t deny the intervention of technology. Without it, we can’t think of scaling our business beyond the pilot city. Choosing suitable IT tools is one of the important tasks for every business entity. As a new brand if you are going with e-com trade then there will be proper visibility of last mile activities, and as a new brand, you can be benefited from the accessible data touch points and use it further for enhancing the capabilities. But, if you are planning to go through a traditional channel then choose a SaaS-based or proprietary solution. If you are a new brand entrant, I will not suggest going for a proprietary solution. The market is flooded with evolved categories of warehousing, distribution & supply chain-driven IT tools, market leaders are Bizom, Kirana King & many more. Efficient, evolved solutions of DMS and WMS are already in place and competitive in terms of cost. Try to find out the solution which provides you with complete solutions from demand creation to delivery and inventory holding to secondary sales.
Actionable
I would say that challenges will remain for new brands in CPG segment whether it comes from the organized trade or unorganized but the journey through retailers is going to be tougher day by day. No doubt, new brands come with innovation and bring a good margin spread for the entire value chain, but here we have to understand how these channels are going to welcome new brands and what special things they have to drive. Few things will help new brand owners and manufacturers when they are going to market with the right GTM strategy.
Market centric - Start with your pilot city. Live all the things which you are carrying in your business model whether it is related to revenue streams, marketing & technology interventions. Do not rush to other cities without that otherwise, it will be a costly affair and one will go out of cash anytime in between and will be out of the market.
Retailer’s Delight: Your direct interaction is with the Retailer so it should be in mind how you aregoing to provide the best peace of mind in your dealing. Three main things are in the retailer’s delights. Good Margin, Free Samples, Quality Assurance, Convenient availability, best RTV policy, Credit period assurance, and fast redressed of consumer complaints. If, being a new brand you take of retailer’s delight, in return they will help you establish your brand in their neighborhood
Placement Strategy: Placement of products in the focus market always go as per the business strategy but I will suggest adopting either strategy, one is “Deep down” and the other is “Selective”. In deep-down strategy brands go with the entire market, here you need to start placement from the smallest shop, then small shop, medium shop, and then to A&B&C class shops, and start placement at each retail store irrespective of class or category. If you are driving your strategy as Selective, then you need to go with selected stores but such stores should be in strategic locations or should have a proper consumer base. Their high-end consumers will help you establish your brand in an upper segment so while selecting these shops go with the colony Kirana leaders.
Call for Action: in Deep down placement strategy call for action become an easy tool to inform end consumers to buy your products from nearby retailers but when going with a Selective placement strategy you will find difficulties because you don’t have any uniform name where the call for action option can be exercised. To overcome this issue, you need to go with branded i.e retail chain stores. Like the Franchise store chain ofkiranaking in Jaipur, Ratandeep chain in Bangalore and Hyderabad, Localmart in Gujarat, and many more standalone supermarkets like big box retailers.
Distribution Channel: Always go with traditional distribution channels, for placement of new brands at the retailer’s store these names will be useful and they will help in cities in Tier 3rd and onward and rural areas. In Tier I, II cities many EB2B startups and logistics companies are doing DTR but they are not able to place new brands with the retailers. Before finalizing a traditional hyperlocal distributor channel partner, you need to go with a proper agreement that the distributor will extend adequate credit to retailers and shall comply with the RTV policy on time. In the same way, you need to give proper credit to your distributors. I will also advise you to go with distribution aggregation platforms that are working closely with Retailers, and distributors and have worked on unified technology platforms. You being a new brand owner don’t need to go for developing Distribution channels. Now, Startups are working, go with them, this will save you time for Go-To- market and in a short period of time will help to make your product market fit. Still, 40 % market is catered by formal channels but an informal channel of wholesalers is driving the secondary market in a big way. Though there is no direct feeding by the Brands, they buy their stuff from distributors or under cutters and further serve the small retailers.
Marketing & PR: Wise use of social media is going dynamics these days. You don’t need to spend money on traditional marketing tools of ATL/BTL but today we can’t underestimate the uses of social media. Route your PR activities through social media. I have seen NCR-based startup ‘country delight’, they did the best use of social media and are now a well-known name in a very short period of time.
Soon FMCG/CPG market is going horde, thousands of new brands will be visible in the market, and they will definitely bet on their luck and will as usual try to do their product market fit, however, some of them will be for short period, some will struggle and few will get the best pulse of consumers and will succeed to establish themselves as a brand.
The definition of CPG will be altered and food &
staples will be included in the new definition. Soon, CPG/FMCG will have a one-word “Grocery”.
I am sure despite so much struggle for new brand entrants, they are going to contribute to our GDP in a big way. This will surely help to achieve
India would become $5 trillion economy in the next 5 year and the contribution of new CPG brands will be there
* Disclaimer: Data and market projections are based on the development going on in the market, however, size may vary from the given numbers depending on the actual scenario of retail at the said time frame in the future.
The article was written on : 10th, oct, 2022 in Jaipur. It will be published on Linkedin by 29 or 30th October 2022. you may get the link from here: https://www.linkedin.com/in/indiaretail
Empowering Bharat through One Nation, One Rule. Advocating UCC, NRC, and CAA in Bharat, and also supporting a two-party political system democracy instead of multi-party system
