Consumers are extremely price conscious while buying any product. The price of the branded sugar is between Rs 23-25 per kg, while the loose or the unpacked sells at Rs 18 per kg. And as far as the quality is concerned, there is no marked variance between the two except the fact that the branded one is visually better with a bigger granule size. Result? Even people who have purchasing power don't buy branded sugar. Whereas in case of salts, categories like the iodised, and the ones with low sodium content induces the consumer to make a choice. "The consumers are not willing to pay additional premium for branded sugar, because there are not enough quality options available," says Gaurav Goel, Director, Dhampur Sugars. Dhampur is the only one that uses Defico Remelt process for refining sugar, while the other players still use sulphur dioxide process for whitening sugar. Sugar from the latter process is banned in most European countries, as sulphur dioxide is considered harmful for health.

Retailers, taking advantage of the prevailing situation, have started selling their own packaged sugar. They package loose sugar in convenient packs and charge the consumers fifty paise or one rupee more than the unpacked variety. The consumers go for the cheaper packs, as there is no differentiating aspect in the quality of the two. Sugar being a low margin and high volume game has given the retailers an opportunity to increase the margins. This has brought down the sales of branded sugar.

Another reason for sugar being slow starter has been the lack of enterprise and risk taking ability shown by the industry majors. Being a seasonal industry, the production of sugar for the entire year has to be done within five to six months. One cannot even think about innovations in the production process, since the entire year's production and sales are at stake. To add to the injury, the sugar manufacturers have to pay increased prices to the sugarcane farmers, and sugar prices have not gone up due to government regulations. That keeps the profit margins further drooping. Hence, not many entrepreneurs are ready to take the gauntlet. "The branded sugar market is still at its nascent stage in our country, and it will take some time to develop," says S. L. Jain, Director General, Indian Sugar Mills Association. Two of the players who moved into producing branded sugar - Modi Sugars and Simbholi sugars - have had to set-up their distribution chains, and they were not entirely successful. Today, Modi has limited presence in the market, and Simbholi sugars has gone with the wind.

But instead of losing hope, one should keep trying for greener pastures - say vitaminised sugar, the one used in Central American countries?