There is a kind of devotion to these brands, something that makes them the undisputed market leaders in India.
All of them have been around for a while, making it clear that customer loyalty is earned slowly, but surely.
It is lunchtime on a weekday and there’s a hubbub of hungry customers around the counter at Cannon food stall, opposite south Mumbai’s iconic Chhatrapati Shivaji Terminus railway station. Employees at the 46-year-old establishment are doing double-speed, rush-hour duty, against the clang of steel plates and swirl of shouted orders, to serve its most popular dish — pav bhaji.
It is definitely not for the calorie-conscious. The pav (bread) glistens with golden butter and a generous slab of butter, the size of a small soap bar, slowly melts into the hot bhaji. That only seems to boost the demand for “Amul Pav Bhaji”, advertised prominently on the menu board for Rs 100. Appa Dandekar, who runs Cannon, says the stall has always used Amul and there is no question of using any other butter brand. “People can tell the difference between Amul and others.”
This kind of devotion to Amul Butter is what makes it the undisputed market leader, accounting for around 85% of the Rs 3,500 crore butter market in India, according to industry sources. More than six decades after it was launched, Amul Butter has managed to hold onto its dominance.
In the hyper competitive world of fast-moving consumer goods (FMCG) — a low-margin, distribution and marketing-focused universe where customer loyalties tend to be fickle — a handful of legacy brands such as Amul Butter has managed to retain their market leadership over decades, fending off rivals, rapidly changing tastes and shifting market structures.
In some cases, the dominance is such that the category is defined by the brand. Instant noodles brand Maggi, Dabur Chyawanprash, Parle G, Rooh Afza and Diary Milk among food and drinks and Pidilite’s Fevicol, an adhesive, are among these logic-defying brands.
All of them have been around for a while, making it clear that customer loyalty is earned slowly, but surely. But apart from longevity and the consistent nurturing of the brand itself, there is little that’s discernibly common among them. Each product has had its own journey and challenges. So what lessons in success and leadership can be gleaned from the journey of these powerhouse brands?
Recall Value For one, being a strong brand does not guarantee safety. Amul, for example, has to fight for market share with Parag Milk Foods and Britannia in cheese, and Nestle and Mother Dairy battle Amul in the packaged milk category. Amul’s market share in the cheese and milk segments are pegged at 40-50% and 30%, respectively.
Research firms such as Nielsen and Euromonitor do not share market share figures with the media, and some market segments, such as butter, are not extensively tracked. ET Magazine has relied on data from industry sources, including figures from syndicated reports by market research firms.
But why do people invariably think of Amul while buying butter? Shirish Upadhyay, a dairy industry veteran who has worked in the private sector and with the Gujarat Cooperative Milk Marketing Federation (GCMMF), which owns the brand Amul, says Amul had a head start in butter.
The dairy sector was delicensed in 1991 but the brand had been launched in the 1950s and its famous “Utterly Butterly” slogan and the Amul girl created in 1966. “And it is very competitively priced so it doesn’t make sense for others to take on Amul.”
Amul Butter Company: Amul, Market share of Amul Butter: 85%, Competitors: Heritage, Mother Dairy, Britannia
“There is a conscious effort to talk to younger people through Amul ads” Rahul da Cunha, ad man behind Amul
Another reason is the distinct salty taste that Amul Butter had developed to take on then-market leader, Polson’s Butter, in the 1950s.
Butter, which helped Amul build a national distribution network, has the highest cross-country penetration among all its products, says RS Sodhi, managing director of GCMMF. The company also sells ghee, buttermilk, ice cream and chocolates. GCMMF earned a revenue of Rs 33,150 crore in 2018-19. “People have blind faith in the Amul Butter brand, like they have on their religion.”
Rahul da Cunha, one of the brains behind the Amul girl advertisements, says one of the reasons for the endurance of the brand is its attempt to talk to younger people. “We are commenting not just on topics of national importance but also on topics of internet importance.”
Riding on Nostalgia Another popular brand that also used a little girl for branding is Parle-G biscuits. The packaging of the product launched in 1939 uses a picture of a little girl. Owned by Parle Products, the biscuit is a daily fixture in the lives of many Indians who like dunking it in their tea.
“You might try different biscuits. But when you want to have something every day, it is Parle-G,” says Mayank Shah, category head at Parle Products. The biscuit accounts for fourfifths of the Rs 8,750 crore glucose biscuit market and operates at staggering scale. Available at 10 different price points from Rs 2 (with eight biscuits) to Rs 65 (with 160 biscuits), Parle-G is sold through 6.5 million outlets. A billion packets are sold every month. In 2011, Nieslen called it the world’s largest-selling biscuit. The brand’s chief competitors are Britannia’s Tiger and ITC’s Sunfeast Glucose, which account for a tenth of the market.
To take on the competition, Parle-G reinvented the brand and termed the “G” in the name “genius”. Shah says Tiger and Sunfeast only ate into the market share of the smaller players. Parle-G’s share has grown from 68% to 80% in the past two decades, he adds.
Parle-G Company: Parle Products Market share of Parle-G in glucose biscuits: 80%, Competitors: Tiger, Sunfeast Glucose
Britannia declined to comment for the story and ITC did not respond to queries. These two companies are no less aggressive when it comes to pricing and distribution, but Tiger and Sunfeast Glucose, launched in 1997 and 2003, respectively, do not — at least not yet — have Parle-G’s biggest selling point — a multi-generational connection with the brand.
Nostalgia certainly helps a brand, says Siddharth Shekhar Singh, associate professor of marketing at the Indian School of Business. “But if customers don’t find value in it, then (future) generations may remember the brand but not use it.”
Anil Viswanathan, director of marketing (chocolates), Mondelez India, concurs. “Nostalgia is a dangerous thing. The moment you are rooted in the past, there is only one direction you are going to go.”
Mondelez accounts for twothirds of the Rs 10,430 crore chocolate market in India, according to Nielsen data shared by industry insiders. Their flagship brand Cadbury Dairy Milk, launched in India in 1948, alone has a 41% market share.
There was a time most Indians did not have access to have premium chocolates and made do with whatever was available. But, Viswanathan says, that started changing around a decade ago when people realised there were no good premium chocolates in India. That was when the company launched Dairy Milk Silk, which starts at Rs 70. The company’s premium range of chocolates like Silk and Bournville necessitated an increase in the number of coolers in stores.
Dairy Milk has also been helped in no small measure by some of India’s most memorable commercials and taglines since the 1990s, created by Ogilvy & Mather (O&M), including “Asli swad zindagi ka (The real taste of life)” and “Kuchh meetha ho jaaye (Let’s have something sweet)”.
“Nostalgia is a dangerous thing for brands. The moment you are rooted in the past, there is only one direction you are going to go” Anil Viswanathan, director of marketing (chocolates), Mondelez
Smart advertising, also by O&M, has also built Fevicol and its associate brands like Fevikwik and M-Seal. Owned by Pidilite Industries, the brands are said to control around 70% of the adhesives market. In a largely unorganised industry, Fevicol has the stickiness its competitors would kill for. A June 2017 research report by Credit Suisse on Pidilite says the incentive for carpenters to switch to another brand was low, as adhesives make up only 1-2% of the cost of making furniture.
Fevicol Company: Pidilite Market share of Fevicol 70% & Associate Brands like Fevikwik: Competitors: Jivanjor, Araldite
One of the secrets to the brand’s success was that unlike its competitors, it did not go just to distributors, but also engaged the end-users, in this case carpenters, masons and plumbers. In 2002, it even started a club for carpenters, the first of its kind, through which it conducts training programmes and cultural events for carpenters’ families. This club, which now has 1 lakh members in 600 towns, allows them to showcase new products to carpenters, a luxury Pidilite’s competitors do not have.
Just like Fevicol is used to refer to adhesives in general, rose-flavoured sherbets are in some quarters referred to as Rooh Afza. The Hamdard Laboratories’ brand, which reportedly accounts for nearly half of the Rs 1,000 crore syrup and concentrate market, was in the news recently because there was a shortage of the product during Ramzan. A large section of people break their iftar fast with Rooh Afza.
The market leader faces no real competition in some product categories. But there are also segments where newer players have given the top brand a serious scare. One such segment is chyawanprash. The product was long synonymous with Dabur, which has a nearly 60% share in the Rs 540 crore market. Baba Ramdev’s Patanjali has within a few years of its launch become the third largest player in the market, after Dabur and Baidyanath. But the sheen has started wearing off Patanjali due to increasing competition and distribution woes.
While Dabur and Baidyanath saw their market shares by volume rise in 2018-19 from 2017-18, Patanjali’s declined. Prashant Agarwal, marketing head-health supplements, Dabur, says Patanjali had a short-term impact and Dabur has made up for the loss in market share. “While people associate chyawanprash with winters, we are trying to get them to also buy it during other seasons, like monsoons.”
Dabur Chyawanprash, launched in 1949, for a long time enjoyed the benefits of being India’s first branded chyawanprash. But with increasing competition, the company has made a concerted attempt to reach out to a younger consumer base through brand ambassadors like cricketer MS Dhoni and Bhojpuri film star Ravi Kishan, who is quite popular in Uttar Pradesh and Bihar, and make chyawanprash more palatable to kids by launching it in flavors like mango and chocolate.
Unlike in chyawanprash, it was not competition that posed a threat to Nestle in instant noodles. Maggi was synonymous instant noodles. But the Food Safety and Standards Authority of India’s decision in June 2015 to recall Maggi noodles over the presence of lead beyond the permissible limit and due to misleading labelling related to monosodium glutamate gave the brand a severe beating. Six months later, Maggi was back on the shelves, though the market share had nearly halved from 80% in 2014, according to Nestle data.
“While people associate chyawanprash with winters, we are trying to get them to also buy it during other seasons, like monsoons” Prashant Agarwal marketing head, health supplements, Dabur
However, the power of the brand and the company’s outreach saw Maggi through those trying times. The product’s market share is now almost 60%, according to Nestle. “It was quite telling who consumers were willing to trust, the government or Maggi,” says Alpana Parida, MD of DY Works, a brand consultancy.
Maggi, Company: Nestle Market share of Maggi: 59% Competitors: Wai Wai, Top Ramen,adequate
Brand Trap Nestle India did not respond to ET Magazine's specific questions, except to say Maggi has a strong resonance among consumers. Maggi's competitors include Sunfeast Yippee, Wai Wai and Top Ramen. Yippee, launched in 2010, has become the second largest brand, with a fifth of the market, riding ITC's distribution muscle, but it still does not immediately bring to mind noodles the way Maggi does.
Being a well-known brand of a big company can be a trap in itself. "These companies are usually large-sized and due to their sheer size, it is challenging for them to be agile and provide a quick response to innovations and changing consumer needs," says Ina Dawer, research manager at Euromonitor International.
Staying relevant is a constant battle. The numerous onceubiquitous brands that have fallen by the wayside stand testimony to this brutal market truth.
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