Consumer Perspective In Food Categories

Published Date: 02 Nov 2017

Chicken in India is sold in three forms: Live chicken, chilled chicken and frozen chicken. Processed chicken is still a nascent market in India. With a market size of about Rs 7,500 crores, the market for processed chicken is poised for a big leap keeping in line with the chicken industry’s projected combined annual growth rate of 10%. Present consumption trends peg manually processed chicken (freshly slaughtered at the butcher) at around 98% of the market, while only 2% of total consumption is catered to by modern processing plants.

Consumer perspective in food categories is especially relevant. The poultry market in India is referred to as a "wet" market i.e. consumers have more confidence in the quality of fresh poultry meat that is slaughtered in their presence – choosing the live bird, getting it dressed and then carrying it home for consumption. It may be that traditional marketing systems have resulted in such a practice, rather than consumers explicitly demanding so. However, since the system works flawlessly, there has never been any perceived or latent need for a different product.

This practice is in accordance both with the lack of cold chain facilities, which limits capacity to market chilled or frozen products, and with consumer preference. Frozen or chilled meat may have problems that can only be detected when it is thawed. Even when refrigeration is available, consumers lack confidence in chilled or frozen meat because of the unreliability of electrical power. Poor sanitary conditions are common in India’s retail poultry shops. In general, however, consumers and merchants share a belief that there is minimal health risk because the Indian style of cooking kills bacteria that could otherwise lead to food poisoning or disease.

The preference for fresh meat also extends to the belief that it is superior in taste and texture. Chilled meat is more acceptable to consumers than frozen meat, and growth in consumption of chilled meat may help facilitate the transition toward a frozen bird market.

Packaged foods also have perceptions of not-as-fresh and higher price levels attached to them, which works against processed chicken. More cultural issues like the house-wife’s involvement in the purchase process are affected by the purchase. Also, chicken is not a regular consumption item in most Indian homes – instead is more of a weekend delicacy, and so time and convenience in getting the manually processed chicken is not relevant.

A secondary observation is that in newly developed, urban townships, where planned development prohibits public slaughtering of chickens; the switch to chilled and frozen chicken has already taken place. But if it be left to choice, consumers prefer live birds. Hence, the main competitor emerges out to be not other brands, but the unorganised retailer – the butcher next door who sells live birds.

The business level issues with the category are that at present, the segment is completely unorganized, with too many middle-men handling the end product, without adding any value at any stage of the delivery chain. Processing also involves high process losses, and competition with the local retailer also means that margins are very low. There is a lack of infrastructure for the distribution points, and at present, sector expertise for this industry is low.

If quality, convenience and price can all be guaranteed; the Indian consumers may gradually switch to processed chicken.

Current Market Overview

The processed food market in India has picked up momentum in the last 5 years. With the emergence and the rapid expansion of the Indian working class, more and more people are accepting packaged foods. The poultry meat processing industry is still in its nascent stage, but frozen or packaged chicken market is also registering a strong growth.

Around 97 % of poultry meat in India is consumed in the fresh form. Only 3 % or about 23,000 tonnes is processed at present. Amongst all the processed meat manufacturers, Godrej Agrovet was the first to launch packaged, frozen fresh poultry meat in India. At present, the top 10 major players contribute for 95 % of total processed poultry meat market, which itself is just 2% of the poultry market.

Brand: Real Good, Godrej

Godrej: The Market Leader

Godrej Agrovet Ltd. belongs to the Rs. 6500 Cr Godrej Group, and is a leader in the Indian agricultural sector with a large presence in cattle, poultry and aqua feeds, and innovative agricultural input. They set up their Integrated Poultry Business (IBP) in 1999 with a view to organize the chicken processing industry and give it a professional and modern approach. They were the first company in India to retail processed, fresh chicken under the brand name "Godrej Real Good Chicken". Today, the company covers the whole spectrum of the poultry business, right from breeding, hatching, rearing of broilers to processing and marketing of its branded chicken. They are also involved in a joint venture with Tyson foods for the front end of the production process including processing and marketing of chilled chicken under the brand "Godrej Real Good Chicken" and ready-to-cook range under the brand "Godrej Yummiez".

Real Good Chicken brand is market leader for fresh poultry in India with 20% market share in processed poultry and consumer loyalty of over 80%. The chicken used in the making of ``Real Good Chicken'' come from grandparent generation roosters imported from Cobb-Avian, a subsidiary of Tyson Foods, U.S., the largest producer of chicken in the world. GAVL is the sole franchisee of Cobb-Avian in India. It is the only packed chicken which is fresh and not frozen. The packs are kept in the chiller where the freshness of the meat is maintained.

Targeting the 25-35 age-group homemakers, Real Good Chicken is meant for SEC (socio-economic classification) A and B1 consumers who are educated and belong to the upper middle class.

Methodology

Quality broiler chickens are processed and packed in a scientific hand-free process, instantly chilled at 2 degrees Celsius and supplied to the customer the same day. The instant chilling procedures effectively retain the freshness of the chicken and keep intact its natural vitamins. Trained and experienced veterinary doctors have been recruited to oversee hygiene at the processing units. Brooding management ensures that the temperature is controlled at the early growth stage, while litter and water management processes are adopted to ensure cleanliness and treatment. During the last five days before slaughter, the birds are fed with feed devoid of medicine and antibiotics, thereby keeping the chicken free of medicinal traces and ideal for human consumption. The slaughter itself is conducted through the scientific ``Halal cut'' method, before the birds are sent for de-feathering using hi-tech machines. Bio-security management measures adopted at the farm include disposal of the dead birds; proactive vaccination and medication schedule, restriction of outsiders' entries; spraying of disinfectants outside the poultry shed and also to all vehicles and persons entering the farm; terminal disinfectant of poultry shed equipment after liquidation of the flock and hygiene audit of the poultry shed before new flock.

Competitive Advantages:

The focus is on serving the growing demand for quality poultry in India with processed chicken and value added chicken products. The assets of the company are:

Brand Value of Godrej

First company to market fresh chilled chicken in India

Strong Supply Chain – best sales and distribution network in the industry

Innovation - Food innovations are based on consumer insights combined with food manufacturing expertise to develop great tasting chicken and vegetarian products

Expertise in Processing - HACCP certified, processing plants supervised by trained food technologists

Strategies for Category and Brand Development

Integrated Marketing Communications

The IMC strategies initially involved a focussed marketing campaign using press, FM radio and POP (point of purchase) displays highlighting the value proposition of the Real Good brand. Eventually a television commercial was launched to help break the myth surrounding packaged chicken. It aimed at highlighting the benefits of RGC and to enunciate that it is fresh and not frozen, as is normally perceived by consumers. The target was to get into the consumer's consideration set of meat products. The message communicated about Real Good Chicken:

Fresh, and not frozen chicken

Establish the freshness credentials such as the product is being delivered fresh from the Godrej farm every day

Convenience – it marinates and cooks faster than live chicken

Not only hygienic, but also healthy and tasty.

Available in whole and whole cut pieces

At an affordable price of Rs. 70/- per Kg

Shelf life of the chicken is 72 hrs.

The Godrej Guarantee

Unique and distinct packaging with the proposition of being "Real Fresh, Real Tasty"

Consumer & Trade communication-education ( 42 day old bone to meat ratio)

Other Strategies:

Taste differentiation thru actual sampling

Conversion of complaints

Innovative Consumer Promos (Free Eggs, Rs.50, Free Home delivery)

Route To Market – Chillers

Launch of exclusive Real Good Chicken outlets, which sell fresh chilled chicken

Looked beyond the traditional cold storage shops and started reaching out to retail provision and grocery stores

Franchise shops

Availability at super markets across the city for the one-stop-purchase convenience for customer

Tie-ups with various food chains

Launch of Godrej Yummiez - a new range of ready-to-cook vegetarian as well as chicken snacks, available in a unique blend of spices and flavours to suit the Indian palate. The non-veg range of Godrej Yummiez snacks is available in two categories currently viz: - Cold cuts and Breaded and Coated snacks. All these products are made only from tender-fresh Godrej 'Real Good Chicken' and are 100% natural and without preservatives.