Spurred by the limited success of its cereals Mohan Meakin sees a future in foods.

By Jaya Basu

Follow the Delhi-Meerut highway out of Delhi till you hit Ghaziabad. Then close your eyes and let your olfactory senses guide you. The smell you should be sniffing for is the unmistakable fruity stench of molasses, and when it gets unbearable, you'll know that you have reached your destination: Mohan Nagar, the G'bad-suburb that hosts a throng of breweries and liquor-making units belonging to Mohan Meakin Limited (MML).

Beer and various varieties of liquor still comprise the mainstay of the business of this family-owned and controlled group; they accounted for 80 per cent of y2k-revenues of Rs 349 crore, and will account for 78 per cent of Y2001 revenues of Rs 385 crore. But it isn't liquor or beer that is on the minds of the family-Mohan these days. It's a far more basic consideration: food.

MML isn't new to foods. It launched a brand of breakfast cereal, Mohan's, in 1995. But it was only after global cereal major Kellogg's entry into the Indian market in 1996 that MML realised the true-worth of its food-foray. Kellogg grew the market with its high-decibel advertising, but it was brand-Mohan that benefited most: the transnational, with its articulated objective of changing the breakfast habits of Indians, spread the message about the category, but the Indian middle-class (or at least part of it) shied away from the steep prices the offerings of the Battle Creek, Michigan company came at. The result? Local players like MML quickly upgraded their packaging, and made a quiet killing.

Today, both Kellogg and MML claim a 50 per cent share of the Rs 60-crore market. However, figures from org-marg indicate that while Kellogg has a 65 per cent share of the market, Mohan's share is around 35 per cent. But the market is still in its infancy: a growth rate of less than 15 per cent on a base of 60 crore isn't exactly something to write home about. After growing at over 25 per cent between 1996 and 1998-courtesy Kellogg-MML expects its breakfast cereals business to grow by just 12 per cent this year. But Vinay Mohan, a director on the board of MML and the family's man in charge of the foods business, is confident that things will look up once the company broadens its product portfolio (right now the company's offerings comprise all of two variants, plain Cornflakes, and wheat porridge, and six SKUs).

Mohan's optimism is well-founded. Kellogg India boasts five variants and nine SKUs, and if Mohan can lay claim to half the market with two offerings there's no telling how far it will go with more. Kellogg India declined to speak to BT, but it is a fact that the company's volumes picked up only when it launched variants like Chocos, Frosties, and Crispix. Vinay Mohan plans to do that, and more: his branding strategy for Mohan includes the use of a brand-character, much like Kellogg's Tony the Tiger and Toucan Sam.

And in an effort to leverage the Mohan's brand name, and extend it, MML's trade division, Trade Links, has launched a range of canned- and bottled-foods-honey, pineapple slices, mushrooms, baked beans, sweet corn, sauces-in a few northern states, and plans to go national by mid-March. Faced by the dynamics of consolidation in the beer business and the threats of imminent foreign competition in the liquor one (post the removal of restrictions on imports), foods could present an ideal growth avenue for MML. But isn't there too much competition, domestic and local, in that market already?

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