Australian Foods (I) Pvt. Ltd opened its first store - Cookie Man store in Chennai in January 2000. Today, it is a leading premium fresh baked cookie company in the country with 45 stores across 21 cities in malls and airports. Pattabhi Rama Rao, president, Australian Foods (I) Pvt. Ltd talks to Nandita Vijay about this remarkable growth, its market share and more in an email interaction. Excerpts:
How would you describe the scene for cookies in India?
The size of the premium cookie segment in India is currently very small. However, with growing awareness and changing customer preferences there is a demand for premium products. Several companies, both international and domestic, are expected to launch products in this category, pointing to the fact that there is a market for this segment of cookies.
What is the market size of this segment?
The market size in the Western markets for premium cookie players is between 10 and 15 per cent of the total market. In the Indian premium biscuit market, Cookie Man as a premium brand, occupies around 2% of the market. According to experts, the premium segment is expected to grow by 10 - 15 per cent in the next 5 - 10 years.
There are branded cookie players like Unibic and Britannia. How does Cookie Man position itself in this space?
We are the only premium, fresh-baked cookie brand in the country. This makes us the only player in this space. Since the premium segment is a very small segment as compared to the rest of the industry, any company who is a player in the snack industry is competition. We welcome the entry of more players in the premium segment, as it will lead to an overall increase in the size of the market and customers will begin to demand better products, thus raising the bar for quality and taste.
What are the visible trends in the cookie market?
The Indian bakery sector is the largest segment of the food industry with an annual turnover of about Rs 3,000 crore. India is the second-largest producer of biscuits after the US. According to estimates, the bakery industry in India is worth $69 billion. Out of this, bread and biscuits hold about 82 per cent of the share.
Consumers in India are now reaping the benefits of globalisation as they are more discerning about quality and taste, resulting in product innovations. The convenience of ready-to-eat foods has come of age in India, where the Indian middle-income consumer is keen to sample the offerings of cafes that offer a wide range of bakery items and cookies.
Consumers are increasingly focussed on the relationship between their calorific intake, weight and health, leading to the introduction of cookies that are low GI, low trans fat, etc. One peculiarity of the Indian consumer is the large number of vegetarians who want eggless products, especially in states like Gujarat and Tamil Nadu.
In the premium segment, where Cookie Man is focussed, consumers seek gourmet and exotic products to satisfy their desire to indulge. Cakes, pastries and biscuits are the typical indulgent products within the bakery sector.
In a phase of growing inflation, would Cookie Man look at increasing the cost of the products?
Over the years, we have restructured our operations and franchise system to offer better economies-of-scale and improve operational efficiencies. Our current model has worked very well for our partners (franchisees), our customers and the company. We do our best not to increase the cost of our products, but, instead will continue to focus on increasing our operational efficiency, thereby passing on the benefit to our customers.
What are the challenges before international cookie majors to succeed in India?
Cookie Man has established itself in the Indian market over the past 10 years - it was a pioneer in the premium, fresh-baked space. Today, the Indian consumer is more discerning about taste and quality, while still considering value for money. The success of Cookie Man proves that customers are willing to pay a premium for quality.
How has Cookie Man fared in India over the last 11 years?
The first Cookie Man store was opened in India in Chennai in January 2000. We were the first fresh baked premium cookie brand to enter the Indian market. Today, Cookie Man is the largest premium fresh-baked cookie brand in India, with 45 stores across 21 cities in malls and airports across the country.
Steeped in Australian tradition and exemplifying a youthful international palate, the Cookie Man product line is unique, of high quality and good value for money. Our cookies are made from the finest ingredients and the baking is centralised to ensure consistency and superior quality. We started with over 50 varieties of fresh-baked cookies in a wide range of international flavours. Today, though our cookies continue to be very popular, we have expanded our product range to include ice creams, muffins, pastries, puffs and brownies in line with customer preferences in India.
How much has the company invested to expand its stores from 45 to 55 and which are the locations where it has set up the new stores?
Cookie Man works on a mix of company-owned and franchisee outlets. Because of a prudent mix of stores, we have been able to grow at an extremely fast pace while still maintaining the quality of the product. Most of the new stores over the next year would be franchisee-owned and Cookie Man will back them up with training, marketing as well as in-store support.
Give us an overview of the Cookie Man locations in India. Which of the locations are generating the highest sales?
Cookie Man is present across metros and tier-2 cities in India. Apart from the four metros, we have stores in Bangalore, Mysore, Hyderabad, Cochin, Pune, Sangli, Ahmedabad, Jaipur, Jalandhar, Bhubaneswar, Coimbatore, etc. The stores in the south of India account for over 50 per cent of our total sales. However, our new stores in locations like Kolkata, Jaipur, Bhubaneswar, etc. have shown encouraging results, Kolkata, a traditionally cookie consuming market, has shown a year-on-year increase of 20 per cent.
Which are the fastest growing products for Cookie Man?
Our cookies have continued to remain very popular with customers. The wide and international varieties of flavours that we offer ensure universal appeal. Some of the flavours that are favourites with customers are Brandy Snap, Choco Chip, Chocolate-dipped cookies and the Indulgence range. Cookie Man ice creams have also gained tremendous acceptance among our customers. Ever since we rolled out our range of over 30 varieties of ice creams, there has been an increase in demand.
Where is the central production base for Cookie Man to manufacture its range?
The central production base is our factory in Chennai. We use a proprietary, patented oven technology from Australia. We have centralised our baking in order to maintain a consistently superior quality and taste. Ovens at store locations use dough that is made at the Chennai factory to ensure standardisation across the country.
Does the company source its food ingredients from within the country?
Cookie Man is focussed on using the best ingredients to ensure the quality of the products. India is known for its premium quality and variety of dry-store material like flour