Cornitos MD Vikram Agarwal is convinced that nachos is the second biggest category in the snacking market after potato chips. He’s banking on this trend to scale up to Rs. 100 crore in annual turnover within the next three years
Have you ever walked into a mall or a theatre and seen a group of youngsters chatting away over a pack of chips? Most likely, always. Right? Clearly, snack food is an easy diversion to boredom and answers hunger pangs instantly. More importantly, given the exposure to international cuisines, the youth today expect something that tingles their taste buds. Realising the demand for this market, Vikram Agarwal, set up Greendot Health Foods (Greendot) in May 2009 and launched its brand Cornitos Nachos Crisps (Cornitos). Incorporated with an initial Investment of Rs. 20 crore (of which 40 per cent was through internal funding), Greendot was the first company to launch tortilla crisps in the Indian branded snack food market. “The snack food category is on a growth path as India has a growing young population with a never ending demand for new tastes,” says Agarwal. And he believes that the demand is going to increase by 30 per cent to 35 per cent by 2015. “Nachos is the second biggest category after potato chips and I wanted to bring that concept to India,” he shares.
Greendot, a part of electronics components manufacturer, Globe Capacitors Group of companies, has established itself as one of the leading brands in the Indian snack market within a span of 5 years. It has grown at a rate of 40 per cent and closed fiscal 2014 with a turnover of Rs. 24 crore. Cornitos is present in more than 250 Tier-I and Tier-II cities through a network of over 200 plus distributors and over 5,000 retailers. The company is following a rapid expansion plan in Tier-III cities and towns. In fact, the company launched an introductory-level pack for small cities, priced at Rs 15.
Carving its niche
“Cornitos has been positioned as a healthy snack,” declares Agarwal. These flavored tortilla chips are made by the Mexican lime-treatment process of making traditional masa using stone ground non-GMO corn. The chips are baked and fried in corn oil. In fact, it has upto 40 per cent less oil than regular potato chips. The chips are thin and crisp, trans-fat free and gluten-free. “We started out with five flavours and have now grown to nine,” says Agarwal. They are sizzlin jalapeno, cheese and herbs, tomato mexicana, tikka masala, sea salt, lime and mint, Thai sweet chili, barbeque and wasabi. Cornitos also has range of Mexican delights and dips. They are – salsa, jalapenos, sweet relish and gherkins.
On the distribution front, Cornitos, which has a pan-India presence, is available across major FMCG stores such as Foodhall, Spencer’s, Easyday, Nilgiris, More, Hypercity, Auchan, Big Bazaar, etc. These crisps are also available for onboard sales on Air Asia, SpiceJet, Jet Airways, IndiGo, GoAir and Air India. To break the conventional distribution channel, Cornitos also is focussing on coffee chains and movie halls including Cafe Coffee Day and DT Cinemas. “These associations help us build an assured market and increase the visibility of our brand,” states Agarwal.
The company has a strong export market and is planning to grow it further. In fact, almost 15 per cent of its revenues come from the export market. These chips are exported to the U.S., China, Nepal, Singapore, Nigeria, Ghana, Maldives, Hongkong and Sri Lanka. Soon, the company plans to launch its products in Thailand, Korea and U.K.
Greendot’s manufacturing facility is located at Roorkee, Uttarkhand. “We have a fully automated state-of-the-art processing machinery and right from lime treatment of corn to packaging of Nachos, all processes are hygienic and untouched by hand,” states Agarwal. The whole production line is controlled by advanced computerised machines. The company is in the process of launching new products that cater to healthy snacking. And, for this, it is now looking to double production capacity and add a second plant at its facility in Roorkee by 2015. “We are also looking at aggressively targeting Tier-II and Tier-III cities now that we have a reasonable hold over Tier-I,” says Agarwal.
Nibbling away the challenges
The biggest challenge that Agarwal was faced with was to get the right corn kernel for the chips. It took him almost one and a half years of research to identify the right corn. The company also launched a pilot programme to manufacture the product in Faridabad. “The initial response from the consumers wasn’t very encouraging due to a lack of product awareness but we were confident about the quality of the product and about Cornitos’ flavours,” recalls Agarwal. The company did extensive sampling across stores in India and gained consumer confidence in a couple of years. It underwent a rebranding exercise and came out with a new packaging, which also helped establish brand recall with consumers.
As far as competition goes, Agarwal believes that while there are many snacks available on the shelf, due to the factors of health and affordability, the company does not foresee competition in the nachos category.
Looking at the future
“Due to low penetration levels and per capita consumption in India, nachos will take a while to be a best-seller,” says Agarwal. According to industry sources, the snack food segment is a huge Rs. 13,000 crore growing market of which nachos has a miniscule share. Agarwal, however, believes that the segment will mature in the next five years and envisions a 40 per cent growth per annum and a good market share in the snacks market. With strong growth plans in place, the company aims to reach a turnover of Rs. 100 crore in the next three years. To achieve this, it is highly focused on quality and believes in listening to consumer feedback, as it will help in spotting emerging trends. “We are focused on increasing capacity and launching new products. There would be an emphasis to penetrate deeper into the smaller cities and towns and expand exports,” says Agarwal, on a parting note.
Rapid expansion plan in Tier-II and Tier-III cities and towns. Launched an introductory-level pack for small cities priced at Rs 15.
Expand the export marketThailand,KoreaandU.K.
Double production capacity and add a second plant at its facility in Roorkee by 2015
Reach a turnover of Rs. 100 crore in the next three years
Launch new products that cater to healthy snacking