- Cargill is the maker of brands like
NatureFresh, Gemini, Sweekarand Leonardo.
- We speak to
Piyush Patnaik, Managing Director, Cargill oil business in India about the pandemic's impact on their business and how they are working towards creating a portfolio of products that caters to the rapidly changing consumer needs.
There has also been a visible move towards healthier offerings. Even before the pandemic hit us, Cargill had started its journey of healthifying its products, which has worked in its favor in the last 1.5 years.
In a recent chat with Piyush Patnaik, Managing Director, Cargill oil business in India, we tried to understand how things have been for the brand since the pandemic and the lockdown, what their outlook is for the upcoming festive season and how they are working on bringing in the next phase of growth in India.
Q) The last 18 months have been difficult for businesses the world over. What kind of an impact did the pandemic and the ensuing lockdown have on your business?
There are three parts to our business, one goes into households through traditional channels. We also have a large presence in food services, essentially for out-of-home consumption. And the third part of our business is supplying to our large B2B players. The last 18 months have been tough. However, it was a mixed bag for the overall business. For the consumer retail business, it was a tailwind but for the food service business, it was a clear and massive headwind. For the B2B segment, it was a mixed bag. The challenge was more on the operations side. However, due to the kind of portfolio we have, there was still consumption and we had less reasons to complain about than a lot of other players in the segment.
Q) What do you think are a few factors that helped you sail through, relatively unscathed?
As a company, we are very resilient. Our risk management processes, that have been built over 150 years, are a part of our core strength. During those difficult times, our supply chain never got disrupted. Secondly, we have clear market leadership in certain markets and it was easier to get back on track there. That helped the overall business. Thirdly, we took a few steps from our team’s side that really helped. For example, we were all operating in difficult environments, through a certain set of policies, we tried to facilitate movement of our people, additional safety measures for our teams and that helped us get back to the market faster than many of our competitors and we could get into deeper markets sooner. So it was a combination of our structural risk management practices built over years, our strong financial strength and the fact that we didn't have any break in our supply chain during this tough period.
Q) What sort of a growth trajectory were you on before the pandemic hit? Are you back to pre-pandemic numbers?
No, we are still not back to pre-Covid numbers but we are on a positive trajectory. We were in the typical FMCG growth bracket before Covid, and there has been a slowdown. We expect growth to kick in as we get into the festive season.
Q) So you expect a good festive season this year?
We definitely expect good demand in the festive season this year. We can already see green shoots of that in some markets. Also, the trade is very clearly positioning itself for higher throughput over the next four to six weeks.
Q) The pandemic led to very rapid changes in consumer behavior. How did that reflect on your offerings? Did you come up with new products to cater to this changing consumer behavior?
We were very lucky on that front. Over the last few years, there has been a massive conversion from loose, unpackaged products to packaged products across all categories and edible oil was ahead of the curve. Other than that, there has been a clear demand for healthier everyday food products. Covid amplified both trends across the staples category. Just around the time Covid hit, we had launched a few products like Gemini Rice Brand Oil and NatureFresh Acti Heart, which were healthier offerings. Both these products benefited from the trends. The fact that our
Q) Has this movement towards packaged products been faster in smaller cities?
A lot of growth in the area is being driven by smaller cities. We are seeing faster conversion in Tier III and IV cities.
Q) You have had a bakery ingredients business for a while now. Since the lockdown encouraged people to turn bakers at home, did you see any increase in demand?
Our bakery goods were designed for large bakery goods customers like biscuit players. It used to be more B2B but over the last five years, we have built a nice business around NatureFresh professional portfolio of bakery ingredients which plays into the street corner artisan bakers. Today, we reach about 5,500 bakers daily. Since a lot of these shops stopped operating in the last 18-24 months, people wanted to have fresh freshly baked products at home. We had a product called
Q) Usually a crisis leads to a cut in marketing and advertising budgets. How was it for Cargill?
We are a bit of an outlier there. We have significantly expanded our communication projects, we are not looking at reduction, rather we are looking at increasing our investments, both across the Gemini and NatureFresh portfolio. As brands that are a part of people’s everyday lives, this is the time for increased conversations. We are doing multi-pronged conversations. Of course electronic media continues to stay the most relevant for larger reach, but we're amplifying it both through Digital and now through Print too.
Q) How are you expanding your reach and going deeper into the country?
We are expanding in two ways. We have expanded our manufacturing capacity significantly over the last 18-24 months And even during this period, we have expanded into many new towns within the geographies we operate in. Of course, we will keep expanding our product portfolio too.