In mid January Kellogg made news in hiring circles when it hired at the top level, even as their sales kept dipping. Here is the news item.
"The company this week appointed Harpreet Singh Tibb from packaged goods giant Hindustan Unilever as its marketing director. It has also hired TS Venketram from biscuits maker Britannia to head supply chain, Kenny Abraham from PepsiCo to head sales and Deepak Shrivastav from GSK Consumer to head legal divisions."
All top personnel hand picked from top competition of Kellogg's in India.
This leads us to think... Kellogg's now will be betting big on these new honchos to lead- Sales, Marketing, Supply Chain- the three mainstays of their business in India, and also legal of course. Is this going to set a trend for our companies who are not faring so well. Maybe a shake up is what is needed for companies to turn around and start performing. Who knows maybe with better perspective at marketing, better targeted advertising, Kellogg's will finally rid itself of the issues which has haunted it since its launch in India. Will its gamble pay off?
Most important is what this will prove in about a year: WAS IT A GOOD IDEA TO HIRE BIG WHEN A COMPANY IS LOOKING DESPERATELY FOR A TURNAROUND
Much has been said of how Kellogg's, a worldwide phenomenon, failed to perform from the very beginning in India. Kellogg's launched in India in 1994 and pegged itself as an alternative to our traditional breakfast. Now, Indian's and in fact Asians found having breakfast cereals to be a novelty. What happened in India was- one group of people refused to have cereals at all, they are still much too enamoured with their rotis, puris or idllis. One group of people bought a pack or two as a novelty and either didnt like it or found it much too expensive a habit to continue. The third group likes having corn flakes for breakfast, but India already had some good quality, much cheaper brands of corn flakes available, which gained in popularity. In fact, in that era, I preferred Mohun's corn flakes to Kellogg's because the former was tougher in texture and retained a crunch even with milk and bananas. And it was priced at a fraction of Kellogg's.
Its first range of products were launched without much ado. Chocos were a favourtie at the time, but none of the other variants made a mark in the market. Even their Mazza variant, made for Indian markets, fizzled out because of the lack of marketing support. In 2012, they tried again to localise their product which was still alien to our culture. They had already launched their oats, but as a spokesperson for a competing oats brand said, they didnt really try to capitalise of their first mover advantage in the oats segment either. However in 2012 they came out with different Indian taste variants of oats, like pudina, tomato and garam masala.
Says ET: "Since Kellogg's first attempt at localisation, the convenience foods market has exploded. The breakfast segment alone is estimated at Rs 600 crore, growing at 18-20%, with Kellogg's the leader with a roughly 55% share. Others angling for a slice of this segment include PepsiCo, Marico, Bagrrys, Dr Oetker, Britannia and McCain."
In this highly competitive market, Kellogg's currently brings in an estimated revenue of about Rs 350 crores plus. After 18 long years in the country, this might be worrying the company management. Also recently their overall sales have dipped in the last 18 months. They have come up with some advertising with high recall but it is hardly enough. In the meantime competition keeps closing the gap in market share.
Can Kellogg's finally change the view point of the Indian breakfast eater? Or will it change its course and get into more biscuits and snacks category. That remains to be seen. But in the meantime, all eyes will be on the new top slots and how they perform in the next year or so.
