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Published on: Feb. 7, 2024, 12:40 p.m.
From Bharat to India - Annapurna Swadisht’s growth journey
  • The company’s products are available across over 600,000 retail touchpoints

By Lancelot Joseph. Executive Editor, Business India

At a time when the entire country was experiencing a complete lockdown due to the Covid-induced pandemic in 2020 and a majority of businesses were having a tough time to stay afloat, Shreeram Bagla, an entrepreneur, a firm believer in the ‘Bharat story’, who was busy chalking out a roadmap for launching hygienically produced and packaged snacks for customers in rural India. It was not too long before he rolled out three SKUs (stock keeping units), including fryums and namkeens under the brand Annapurna Swadisht, at an attractive price point of Rs5 per pack in the rural markets of West Bengal to evaluate the market. His products were an instant hit among people who were looking for hygienic alternatives to locally produced loose snacks. And the rest as they say is ‘history’!

Ram Prasad Pal, a 39-year-old trader from the Burdwan district of West Bengal is rather relieved that both his kids have found a suitable and affordable alternative to the unpacked loose snacks available at the shops earlier. “Both my boys love the fryums, namkeens, chips and cakes of Annapurna Swadisht and it works for me as it is more hygienic and does not pinch my pockets unlike some of the other products available in the market,” he says.

From three SKUs in 2020, the company has progressed to 72 SKUs across 10 broad categories, including fryums, namkeens, snacks, candies and cakes in its portfolio. The products are available across over 600,000 retail touchpoints, primarily in the Tier III and Tier IV markets of Bihar, Jharkhand, West Bengal, Assam, Odisha and Uttar Pradesh.

From pellets to snacks

Incorporated in 2016 as Annapurna Agro Industries, the company had initially set up an extruded pellet unit in Asansol, West Bengal. In 2017, it expanded its presence by supplying raw pellets to regional snack manufacturers. In 2019-20, the company set sight on retail play by planning the first expansion to packaged snacks and installed fryers packaging unit in Asansol and introduced first retail product fryums at a price point of Rs5 per unit.

“The pandemic was at its peak, and we were all confined to our homes,” says Bagla, MD, Annapurna Swadisht. “I had been thinking about the need for forward integration and entering into retail segment by launching our own branded packets. The pandemic and the resultant concern around health and hygiene further motivated me to come out with hygienically packed products aimed at the rural and semi-urban markets and that is how Annapurna Jackpot – the fryum pack priced at Rs5 – was born”.

In 2021, the company expanded its team, fortified distribution and commanded a substantial market share in fryums category in West Bengal. Subsequently, it set up the second manufacturing unit in Siliguri, West Bengal, and added potato chips, cakes, namkeen and candies. In 2022, it implemented digitisation for better control on sales and operations and expanded distribution to Odisha and the North-East.

The company got listed on the NSE-SME platform in September 2022 and raised close to Rs30.25 crore through an initial public offering at a valuation of Rs114.95 crore. From a revenue of about Rs65.61 crore in April-September 2022, the company’s turnover grew by nearly 100 per cent to Rs131.13 crore for the half year ending 30 September 2023. 

Annapurna Swadisht, which has already stepped on the growth pedal, now aims to double its revenue in 2023-24 to close to Rs300 crore and maintain a compounded annual growth rate (CAGR) of at least 50 per cent over the next 4-5 years. This ambitious growth strategy will be driven by increased market penetration and expansion into two major categories: biscuits and noodles, apart from its traditional offerings.

  • Bagla: strategic initiatives

    Bagla: strategic initiatives

The company has set a goal of reaching a topline of Rs900-1,000 crore within 3-4 years from Rs160 crore in 2022-23. ASL has five owned manufacturing units spread across West Bengal at Asansol, Siliguri, Gurap, Dhulagarh, and six contractual/leasing arrangements at Kakinara (West Bengal), Hazaribagh (Jharkhand), Ranigunj (WB), Ganjam (Odisha), Siliguri (WB) and Mathura (UP). “There is a huge untapped potential in the rural and semi-urban markets of India, and this is clearly the segment we are targeting,” Bagla says.

“We have been witnessing good traction in demand from these markets and with the increasing per capita income, we expect demand to grow even further in the days to come. We have expanded our manufacturing capacity by setting up a new plant at Dhulagarh in West Bengal, which is expected to commence operations soon. We are also looking to strengthen our presence in the existing markets by ramping up our distribution footprint and rolling out more SKUs,” he adds.

Way forward

With over a decade of experience in the snacks industry, Bagla understands the finer nuances and pulse of the sector and has been instrumental in charting out the possible growth areas for the company, both in terms of products and markets. Having created a brand presence and impact in the rural and semi urban markets of West Bengal, Bihar, Jharkhand, Assam, Odisha and Uttar Pradesh in the last three years, the company is now poised to embark on to its next phase of growth.

A firm believer in the untapped growth potential in the country’s hinterland, Bagla is confident of rural India playing a critical role in driving India’s economic growth backed by the various schemes launched by the Central government towards rural development and with the massive increase in investments in the infrastructure sector.

Enthused by the potential of the rural and semi urban markets, Bagla has undertaken several strategic initiatives including identifying the possible gaps in demand and supply in the snacks industry in India at present and launching products at appropriate price points to address the gap; inking partnerships with white-label manufacturing partners to move closer to consuming markets and growing output; and appointment of senior officials at the management level to help steer the company on the growth path.

One such move was to appoint G.P. Sah (former CEO, FMCG division, CG group, which makes, among others, the Wai Wai brand noodles) as an additional director & joint managing director, to steer the company on to its next phase of growth, where it is looking to ramp up its product portfolio, particularly in the noodles segment.

According to Bagla, Sah has had several years of experience of building and nurturing various brands across the FMCG space and his presence in the company is likely to add tremendous value at a time when Annapurna Swadisht is looking to scale up and tap into the underpenetrated branded snacks markets in the Tier III and Tier IV towns of the country.

The biscuits market is worth Rs50,000 crore, and the noodles market is estimated to be Rs30,000-40,000 crore, but both have significant untapped potential given their low per capita consumption, compared to neighbouring countries. The company will look to consolidate and fortify its position in its existing markets of eastern and northeastern states.

  • Affordably priced, the products attract consumers

West Bengal accounts for nearly 56 per cent of the company’s total sales, followed by Jharkhand (16 per cent), Assam (about 14 per cent), Bihar (10 per cent), Uttar Pradesh (2 per cent) and Odisha (about 1 per cent), while Meghalaya, Tripura and Andhra Pradesh put in less than 1 per cent (0.5 per cent) each to the total sales. So, there is a huge scope for expanding market share in these states, moving forward.

True to its motto of providing kuch zyada hamesha, the company offers differentiated freebies with each of its pack, and this has been a huge hit among customers – both young and old alike. Plans are afoot to ramp up distribution with a view to grow sales and fortify its presence. It currently has nearly 550 distributors and over 115 super distributors, and the products are available across over 6 lakh retail touchpoints. The company is looking to increase its distributor footprint by 30-40 per cent this year. “As the distributor base increases the number of touchpoints across which our products are available will also increase,” adds Bagla.

“The country is on an exponential growth phase at present, supported by strong macro-economic fundamentals,” he points out. “We expect this to augur well for growth across the country, particularly in the underpenetrated markets of rural and semi urban India”.

The company, with close to 72 SKUs across 10 broad categories, plans to add 10-12 more SKUs to take the total to close to 90 SKUs by the end of this financial year. Currently, fryums account for nearly 90 per cent of the company’s total sales. But, moving forward, the share of fryums will be close to 50 per cent and noodles, touching 30 per cent, while the balance 20 per cent would be shared between biscuits and other SKUs, he said.

A recent study by BobCaps, which was based on insights gathered from Tier I to Tier IV cities and mofussil markets in Tamil Nadu and Karnataka, suggests that every small town in Tier III and IV cities housed a supermarket with heavy footfalls and shelves lined with premium products across various categories. Improved living conditions, better road connectivity, higher farm income due to improved productivity and better realisations are some of the key drivers for growth in these markets.

Annapurna Swadisht, Bagla says, is betting big on R&D, with a view to constantly innovate and stay ahead of the curve. With the kind of focus that the company has been laying on innovation, launching products aimed at targeted markets at attractive price points, the company is hopeful of reaping the benefits of the growth that is brewing in the smaller towns and cities.

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