Spotting an opportunity in the fast moving consumer goods (FMCG) business, Future Group has announced aggressive brand launches for several categories such as colas, health drinks, toothpastes, personal care products, detergents, soaps, etc.
“KB’s Fair Price Stores, which is our lean discount format and sells 330 SKUs (stock keeping units), will soon have at least 200 of our private label brands,” said Kishore Biyani, chairman, Future Group.
The group’s confidence has been boosted by good performance of its brands such as Tasty Treat, Fresh N Pure, etc, among others.
Biyani asserted that the group can bring out these brands at much more affordable rates. The group has projected Rs 10,000 crore revenues by 2012.
Biyani has roped in professionals with experience in the FMCG sector like S Ravindranath (former director, Foods) and Shashi Kalathil (former head at Pepsico), while Damodar Mall and Sadashiv Nayak, currently with the Future Group, were HUL employees.
When asked how the distribution channel will be established, Santosh Desai, CEO, Future Brands said, “We will strike alliances with the right partners as and when required.”
The group plans advertising investments of over Rs 200 crore for its private label brands by 2012. Alliances will also be struck with a lot of manufacturers. Currently, Dynamix, and Cargill Foods manufacture some of the Future Group brands.
Anand Shah, FMCG analyst with Angel Broking, said the optimism was not totally out of place. “It is a good move as commodity prices are low and the group has front-end retail network. However, FMCG companies such as Godrej, HUL, Dabur, etc, which currently are clients, may raise objections if the group’s brands start competing with them.” He also said that personal care categories might take a longer time to have a strong following.