Mayonnaise is the new ketchup in India. Here's why

It was the summer of 2008, when Oliver Mirza found that vanilla was the worst seller amongst the milk shake range. He thought that the reason for the dip in sales is the absence of original vanilla in the mixes. He decided to add pieces of vanilla in it. However the sales dipped further. Because this time, people thought the vanilla pieces were actually dust. He was heading one of the biggest food companies of the world in the sub continent.

In an interaction with Business Insider, the MD of Dr Oetkar India, Mirza was telling how 'difficult' and 'different' the Indian market is. He joined the globally acclaimed German food company nine years ago. Dr Oetkar had entered the Indian market like any other foreign food company.

“The idea was initially to explore newer markets and enter a new market with products which we sell internationally under 4 categories - frozen pizza, home baking, western desserts and one is food service. So we first tested in these divisions, we tried for frozen pizza in Bombay. Also part of home baking division is muesli which was launched. We discovered that the home baking division is not a huge market or a great market, frozen pizza it was far too early, chilled dessert was also not a great market, so we figured there is not really a market for these categories we are operating and they you can say let’s withdraw this market or you believe in a market that it can play a great role in market business and we decided to go for an acquisition which is not in frozen pizza space or in home baking space but something close to what we do and what we do internationally that is pleasure food and western food like pizza, cake,” Mirza told Business Insider.

“ So we acquired a company which was engaged in western food so on basis that we went for an acquisition to buy a small platform which you can then mold and build.”

Soon the German food company changed their strategy and acquired a small food company in Delhi, Fun Foods and entered into western sauces and spreads market in India). That worked smooth.

What is boosting the mayonnaise market?

According to Mirza, the major push for helping them sell the condiments is the fast urbanization, rise in disposable income in the age group that likes experimenting with food. If the Euromonitor report is to be believed, busy lifestyle has helped consumers to adapt to sauces, dressings and condiments. Also the middle income class, the most aggressive consumers in India, are okay to pop out their paratha on breakfast and make space for salads. The ever widening belt line of majority people engaged in corporate job has also helped in the mayonnaise boom. Ketchup is usually consumed only as dip however Mayonnaise is way more versatile and is consumed in the form of a spread, dip, binding agent and a base sauce for many other sauces. This multi utility aspect makes it more preferable over ketchup.

Is mayonnaise healthier than ketchup?

Mayonnaise has 57 calories per tablespoon, but contains 5 grams of fat, 4 milligrams of cholesterol, and 105 milligrams of sodium. In comparison, Ketchup has 15 calories per tablespoon, but it has 3.4 grams of sugar and a whopping 167 milligrams of sodium in that small amount. Now for health freaks, it's always better to throw out ketchup from everyday consumption. While mayonnaise may seem heavy in calories but the less than 1 gram per tablespoon sugar content helps.

Will Mayonnaise defeat the ketchup market?

Ketchup still maintains the lead in the Indian condiment market, but mayonnaise isn't far behind. With a value growth of 23per cent in 2015, Mayonnaise market is growing at a CAGR of 22-23%. Eggless mayonnaise sales contribute around 80% of overall sales volume in the country. The market is expected to reach Rs 1000 crore by 2020. In the USA, mayonnaise market counts $2 billion and ketchup is just $800 million and so is the scenario everywhere in the world. Mirza believes by 2020, Dr. Oetker would be valued Rs. 1000 crore with 500 cr. coming from FunFoods and the rest from other International sub-brands that will be launched in the coming years.