Product categories:
So, the options mentioned are a figment of my imagination, and not any commitment from the management. What path the management takes, needs to be seen. But any arithmetic we do to calculate the projections, may benefit from some variations introduced on the basis of future potential optionalities.
Funds:
Yes, they would need funds and in the current environment that should not be too difficult for them, given their area of operation, record of growth and profitability.
Are they spreading themselves too thin:
May be not. While I do not have any background in food manufacturing, but my understanding is that once a food’s recipe has been understood and finalized, it from there-on a matter of manufacturing it (some tweaking may be required depending upon raw materials) and distributing it. Since they can leverage their existing distribution network, it should work out for them. Depending upon the products they may select different distributors. Plus, they are leveraging a mix of their own plants and contract manufacturing. They currently have 6 manufacturing locations per their website out of which manufacturing unit 6 is Gopal Foods of Mathura with the biggest capacity and Annapurna has an exclusive manufacturing contract with them, although the exact capacity exclusive to Annapurna has not been disclosed.
Advertising and going against big boys:
The major selling points for them is their taste selection done to suit the taste palette of the region and the smaller ticket size that helps people try out their offerings. This also helps in impulsive buying, like buying a Rs. 5 namkeen packet to go with a Rs. 10 tea.
Another thing is that they offer a smaller unit to a distributor, making it economical for the distributor to deal with them, compared to the bigger players like Balaji or Pepsico. I am attaching a video in which Mr. Ritesh Shaw mentions this. So, dealing with Annapurna is better in two terms - unit economy and working cycle for a distributor. This further percolates to retailer level.
As far as advertising is concerned, I do not have much to contribute. But, from my experience, I have bought almost every brand of namkeen and snacks either because I wanted to try them out or have already tried them in the past like Bikano, Snactac, Crax, Uncle chips (didn’t knew at the time of buying that they have been taken over by Pepsico) etc. without seeing any advertisements of these brands. I think people are now open to try various brands irrespective of the fact whether they have appeared on TV at primetime or not.
E-Commerce:
I searched for “Olonkar” brand of oil and for Gohona Bori on Amazon and Flipkart, but was not able to find anything. Maybe it is a work in progress.
I have a couple of queries that I will drop to their investor relations team and will update you guys here.
2022 Alpha Ideas SME Stars-Annapurna Swadisht Ltd
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