From having a limited reach until last year, Capital Foods is now present in 13 regions in India, mostly through general trade stores, and also modern trade outlets and online marketplaces. Navin Tewari tells Devika Singh that the intention isn't to overtake market leader Maggi, but to create newer categories under its brands Ching's Secret and Smith & Jones. Edited excerpts:
What triggered the expansion spree that Capital Foods is on presently?
PE firm General Atlantic acquired a majority stake in Capital Foods two years ago and decided to bring in professional management. That's how I was hired last year. As we sat down on the drawing board to decide our next move, we realised that the recall for our brands was far wider and deeper than the availability of our products. That's when we decided to expand our presence in the country.
In January last year, we were operating mostly in Maharashtra, Gujarat, and Central and Eastern Uttar Pradesh. We have now expanded to 13 regions. We have put in manpower in these regions and are adding distributors and super stockers. After the advent of Jio, people in the smaller towns have as much access to information as someone living in a tier I town. And hence, these people too aspire to consume the same products which, a while ago, were accessible only in the metros. At this point, except for South India and some states in the North East, our products are available almost everywhere in the country.
Which retail channels are you focussing on as you go deeper into the country?
We are focussing on general trade because it will help us reach wider. But, at the same time, we are keeping a good balance by placing our products across modern trade stores as well. In the last nine months, we have added more than 200 distributors. Currently, we are present in 3.5 lakh general trade stores, and aim to be present in six lakh general trade stores in the next one year.
We also started putting our products on e-commerce marketplaces six months ago, as we realised that a lot of our customers who don't find products in their neighbourhood stores are looking for them online. Currently, 65-70% of our sales comes from general trade, 20-22% from modern trade, while the rest is from e-commerce.
How different is your approach for Ching's Secret vis-à-vis Smith & Jones? How much revenue do they each bring in?
We are on track to hit a revenue of Rs 600 crore in FY20; out of this, approximately Rs 175-200 crore will come from Smith & Jones and the rest from Ching's Secret. That's because Ching's Secret has more products and it also has a wider presence. We started expanding Smith & Jones only two years back. In January, we introduced Peri Peri Masala under Smith & Jones and will keep adding more products going ahead. The plan is to add desi Chinese products to Ching's Secret, and more innovative products, which are a fusion of Indian and global cuisines, to Smith & Jones. Going ahead, we plan to introduce more masalas, newer variants and new packaging, too.
How does Ching's Secret plan to take on Nestle's Maggi, which owns the lion's share of the noodles market?
There is no doubt that Maggi is the market leader in this category. We don't have any intention to beat them tomorrow and become the leader in the noodles category. Although we are present in that category, we are not just a noodles company. We are here to create new categories. We manufacture flavoured noodles such as Schezwan, Hot Garlic and Manchurian noodles, and are the market leader in that category.
How different will your marketing efforts be as you expand your presence?
Currently, we use television, print and outdoor; but this year our presence on digital will go up manifold. The way the consumer is watching content has undergone a huge shift in the last 24 months. They are moving from larger screens to mobile phones and tablets, and we are aligning our strategy with that. We are also giving a more regional touch to our campaigns. For our recent campaign for Ching's Secret, we roped in Neena Gupta and Priya Bapat. They are speaking in different dialects in these ads.