Friday, June 14, 2024

From Salt Shakers to Spice Leaders Catch Spices’ Success Recipe

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From pioneering the concept of table top salt dispensers to expanding and marking its formidable presence in the competitive spices market, the journey of Catch Spices exemplifies a steadfast dedication to consumer-centric principles and an unwavering pursuit of superior quality.

About three and a half decades ago, when the market for packaged food in India was beginning to evolve, the Delhi-NCR based DS Group – a conglomerate that operates multiple businesses, including FMCG, Hospitality, Agri, Luxury Retail, Tobacco, and many more – was on the lookout for the perfect entry point into the burgeoning spices market.

Sandeep Ghosh, Business Head, DS Spiceco (Catch Salt & Spices), narrates an anecdote that sparked the DS Group’s entry into the world of spices. “Back then, we encountered a common issue: table salt tended to become damp during the rainy season, making it inconvenient to use. Many of us resorted to adding rice particles to prevent clumping.”

Faced with this common inconvenience, the DS Group rose to the occasion, introducing an innovative solution: the tabletop salt shaker or sprinkler under the brand name “Catch”. Initially tailored for salt and pepper, with a few additional variants, the introduction of tabletop salt sprinkler represented a significant milestone for the company. However, the story did not end there. Although spices were not initially part of its product line, this innovative solution laid the foundation for DS Group’s later expansion into the spices domain.

From Salt to Turmeric & Chili and Blends

Between 2003 and 2005, customers who were already fans of their widely popular tabletop sprinklers, started indicating a desire for high-quality spices. In response, DS Group introduced a line of quality spices around 2004-2005, albeit initially as a secondary offering due to the prevailing success of its salt sprinklers.

Around 2015- 2016, the company identified the untapped potential within the spices market, leading to a strategic shift in focus and increased investment in the development of their spice business. By then, DS Spiceco, the spices division of DS Group under the Catch brand banner, had started expanding its products’ portfolio. Catch Sprinkler had already become their flagship product and the embodiment of their brand identity.

Even today, while the company has introduced a diverse array of products under the Catch brand umbrella, the sprinkler remains the flagship item. Renowned for its widespread availability across A-class and B-class outlets, it has become a staple on dining tables Nationwide. “When people think of Catch, the first thing that comes to mind is usually the salt sprinkler. However, when it comes to household spice consumption, turmeric, or haldi, takes precedence,” says Ghosh. Like salt, turmeric holds a significant place in households across the country. Every household uses turmeric, making it a staple spice. “Recognizing this, we introduced a top-tier quality turmeric product that remains unparalleled in the market. Our market share in the turmeric category is substantial, and consumers attest to the superiority of our Catch Haldi,” avers Ghosh.

Yet, for a product to truly resonate with consumers, it needs to offer a unique value proposition. This is whereby the Catch blend range came into play, a segment that has emerged as the cornerstone of DS Group’s spice business. Blends like pav bhaji masala require specific nuances that may vary regionally. DS Group ensured that its Catch brand distinguished itself by excelling in the creation of blends tailored to suit diverse tastes across the nation. “Our blend products have evinced strong consumer loyalty by delivering a consistently high-quality experience. While commodities like turmeric or red chili may experience temporary fluctuations in pricing, our blend products remain the bedrock of our brand’s success,” explains Ghosh.

New Products and Innovations to Meet Changing Consumer Tastes

Ghosh emphasizes the point that as a brand committed to consumer-centricity, Catch has continually adapted its product range to meet evolving consumer preferences and tastes. He says that instead of focusing solely on competition, the brand has consistently placed emphasis on prioritizing the consumer and on ensuring a deeper understanding of their evolving needs and lifestyle choices. “We aim to offer products that not only provide value for money but also build trust and cater to their changing preferences and busy lifestyles. Whether it’s a young millennial managing multiple responsibilities or a family member making purchase decisions, our focus remains on delivering quality and reliability,” says Ghosh.

Over time, the brand has transitioned from offering plain spices to packaged spices, followed by blends. By identifying emerging opportunities, the company has successfully penetrated new spice segments. More recently, Catch has introduced products such as ginger garlic paste and specialty salts like Sindha namak or pink rock salt, responding to the increasing demand for these items among households. Notably, their cooking pastes and pink rock salt products have achieved substantial market success.

Additionally, they’ve introduced ready-to-cook gravies, simplifying meal preparation for consumers. Emphasizing health consciousness, the company ensures its products are preservative-free and made from only premium ingredients. For instance, even the oil used in its ready-to-cook gravies is olive oil. “Our commitment is to deliver not only delicious and flavorful products but also ones that promote health and wellness and meet consumers’ expectations for taste, aroma, color, and overall quality,” avers Ghosh.

Commenting on the best-selling products, he informs that the pink rock salt, ginger garlic paste, and kasuri methi paste offered by the company are experiencing remarkable growth rates, ranging from 100% to 200%, which indicates their rising popularity despite being relatively new to the market. In addition to these, premium spices like coriander, turmeric, and chili, along with Kashmiri mirch are also performing exceptionally well. “While there are a few other noteworthy products, these bestsellers always remain at the forefront of consumer preferences,” says Ghosh.

Among the other products experiencing phenomenal growth, Ghosh points out that the company’s blend products, including meat masala, chicken masala, and garam masala have exhibited outstanding performance. Particularly noteworthy are proprietary blends like Kitchen King and Sabji Masala, which consistently rank among the top-selling items in their product lineup.

Asked about the areas where the brand has innovated, experimented, and introduced new products to expand the market within the spices category, Ghosh asserts that innovation is ingrained in the organization’s DNA since its inception. He explains that innovation extends beyond just product development; it also encompasses packaging and process development to enhance product quality.

He notes that since the company’s emphasis on developing new blends and spices gained momentum only around 2015-16, most of their current product offerings are either new or in an early developmental phase. While refraining from disclosing specific details about products still in development, he highlights the brand’s success in creating unique products like gravies, which stand out due to their superior quality ingredients, packaging, and processing methods including the use of olive oil, all the while keeping prices affordable through innovative approaches.

“Many companies offer gravy products, but ours stands out due to several unique features. While many competitors use high-quality ingredients and packaging, we prioritize top-notch processing methods and the use of olive oil, ensuring unparalleled quality. This commitment to innovation allows us to maintain affordability without compromising on quality, setting us apart from others in the market,” asserts Ghosh.

Underscoring the significance of affordability within Catch’s pricing strategy, he elucidates the company’s dedication to providing value that transcends cost considerations. Emphasizing that Catch aims to provide quality without straying into super-premium territory, Ghosh says that the brand strives to offer better value within the allocated budget, ensuring competitiveness in the market. “While slight price differences may occur due to various factors, Catch maintains its focus on providing accessible and value-driven products.”

About the popularity of different price points among consumers, Ghosh points to the diverse nature of the Indian market and its consumers and how Catch serves the entire spectrum of consumers, catering to various economic backgrounds. He explains that in the case of spice blends, there’s a range of preferences based on both usage and economic strata. For instance, while there’s significant demand for affordable Rs. 5 sachets, there’s also a market for larger 100 gram packs. “Despite growth across different price ranges, the Rs. 5 sachet remains dominant in terms of the sheer number of packets sold, indicating a wide reach to consumers across different segments.”

Elaborating on the issues of pricing and affordability and considerations of value and volume growth, Ghosh outlines the importance of consumer acquisition, noting that it’s essential to assess how many consumers a company can connect with and serve and how growth in sales translates to reaching and serving more consumers. “For example, if sales in the Rs. 5 sachet category grow by 20% and a crore sachets are sold, it implies the addition of another 20 lakh consumers to the customer base. These consumers may vary from one-time buyers to repeat purchasers, but the goal remains consistent across businesses: acquiring and serving more consumers.

Bringing Excellence in Quality with Exceptional Products

In keeping with the products’ exceptional performance, the brand has been meticulous in developing its unique selling proposition (USP) and differentiator. For instance, Catch prioritizes sourcing products from the highest-quality origins, leaving no stone unturned to ensure optimal consumer satisfaction.

“When it comes to turmeric, we exclusively source from Erode or Salem in Tamil Nadu, known for their superior quality. Similarly, our Kashmiri red chillies are sourced directly from Bedki in Karnataka. We’re also the first to procure kasturi methi from Nagaur in Rajasthan, known for producing the finest variety in the country,” points out Ghosh.

However, sourcing is just one aspect of the brand’s commitment to quality. Equally essential are its processing methods, which play a crucial role in ensuring the excellence of products. Employing state-of-the-art cryogenic grinding technology, Catch guarantees precision and consistency in every batch.

“Visitors are welcome to tour our facility at any time, where they can observe firsthand our advanced processes and infrastructure, which stand as a testament to our dedication to innovation and quality,” affirms Ghosh.

When it comes to supply chain and logistics, the company has proactively embraced technological advancements. It has been an early adopter of SAP High-Performance Analytic Appliance for its comprehensive ERP system. The company’s field force employs essential tools like Bison, SFA, and DM to streamline frontline sales operations effectively.

Also, all business operations, including claim settlement processes, have undergone full automation. Particularly noteworthy is the integration of a sales planning module, which prioritizes sales forecasting and circle management for improved strategic decision-making. Additionally, the implementation of 09-09, a specialized solution for supply chain management, has significantly bolstered operational efficiency.

Thanks to the adoption of these technologies, the company has been able to enhance and optimize its sales distribution process. Beginning with meticulous forecasting, the brand has integrated environmental shifts and market dynamics, including scheme modifications and fluctuations in product demand.

With approximately eleven or twelve container freight stations (CFS) strategically located nationwide, the brand is able to facilitate seamless product delivery to diverse institutions and retail chains. “Additionally, we have 60 super stock points catering primarily to the GT trade. In essence, we’ve ensured a robust supply network with a supply point roughly every 300 kilometers across the country, ensuring efficient distribution to key locations such as Kanpur, Lucknow, Uttarakhand, Varanasi, and Patna,” informs Ghosh.

Growth Story: INR 450-1,100 crore in 4 Years

Regarding volume and value growth, Ghosh reports that DS Spiceco achieved a total revenue of approximately INR 1100 crore for the fiscal year 2022-2023. This marks a significant increase compared to its INR 450 crore earnings in 2020.

“We’ve more than doubled our revenue in just four years. Additionally, we hold leading positions in several states and are prominent in e-commerce, northern and eastern markets, modern trade, and the institutional HoReCa sector,” says Ghosh.

Over time, the company has ascended to hold a significant 20% stake within the FMCG division of the DS Group. “We’ve experienced rapid growth in the spice industry, with a Compound Annual Growth Rate (CAGR) of approximately 25% over the past four years,” reveals Ghosh.

Regarding market share, he alludes to the complexity stemming from the highly fragmented nature of the spices market, which is unlike other FMCG segments. This fragmentation is attributed to the prevalence of numerous local players across states and regions who are successfully leveraging their intimate knowledge of local tastes and cultural intricacies.

For instance, Push Spices dominates in Madhya Pradesh, Goldiee leads in Uttar Pradesh, and Rakesh Masala and Rajesh Masala hold significant positions in Bihar. In West Bengal, Sunrise enjoys substantial market presence, while Aachi Masala, Shakti Masala, and MTR dominate in the southern regions. “This fragmentation is so pronounced that even the market leaders struggle to achieve double-digit market share. While we are not yet close to this milestone but we are making strides towards it. While I cannot provide an exact market share figure, it is safe to say that we currently hold a sub-double-digit share,” admits Ghosh.

Explaining the distribution of sales across various channels, he reveals that approximately 60% of sales are attributed to the General Trade (GT) channel, with institutional business accounting for around 15%. E-commerce contributes another 15% to the sales while Modern Trade (MT) accounts for the remaining 15%. Going forward, Ghosh anticipates a rise in e-commerce and quick commerce adoption, while projecting a growth rate of 25% to 30% annually for the FMCG category. However, he thinks that this growth may come at the expense of the GT channel, which could experience a decline, while modern trade is expected to maintain its market share with minimal fluctuations.

Discussing the evolving landscape of food consumption, Ghosh points to the rise of e-commerce and quick commerce, alongside the changing dynamics of eating habits. He notes that since spices play a fundamental role in Indian cuisine, their consumption is closely intertwined with the evolution of our food purchasing and dietary habits.

“The rapid adoption of quick commerce is evident, particularly in urban hubs like Delhi, Noida, and Gurgaon where platforms such as Blinkit are thriving. Many consumers, including myself, have shifted towards these convenient services and this transition is becoming increasingly pronounced. The swift rise of quick commerce represents a fundamental shift in the landscape of spice sales and distribution, and highlights its increasing importance as a vital sales channel within the market.”

Another interesting trend he refers to is the rising significance of the HoReCa (Hotel, Restaurant, and Catering) channel in driving the growth of the spices category. In this context, he highlights the shift visible in the proportion of meals consumed outside the home compared to those eaten at home.

“Over the years, there has been a decline in the number of meals consumed at home, with individuals, especially millennials, opting for more meals outside. This cultural and behavioral shift towards out-of-home consumption is driving growth in the HoReCa sector. As people spend more time dining out or purchasing food from restaurants and quick-service eateries, the HoReCa channel will assume greater significance in the growth of spices category, potentially competing with modern trade and e-commerce channels in terms of consumption levels.”

Within the ongoing evolution of the market, characterized by shifting consumer preferences and industry dynamics, adaptation emerges as a critical factor. With a keen eye on emerging trends, particularly within the institutional and HoReCa sector, is Catch considering potential modifications to its packaging or pack sizes?

“This is an ongoing process for us. We continuously monitor market shifts and adjust our packaging and product sizes accordingly. For instance, as modern trade demands, we introduce more value packs tailored to their needs. Conversely, for general trade, different value pack sizes are necessary. In the HoReCa sector, bulk packaging is more prevalent. These adjustments are part of our routine operations and reflects our commitment to staying aligned with market demands,” says Ghosh.

Catch Spices has historically thrived in its primary markets, particularly in the northern and eastern regions. In upper North India, spanning from Delhi to Jammu and Kashmir, the brand performs exceptionally well. Similarly, in States like Uttar Pradesh and Uttarakhand, Catch holds a leading position, while also maintaining a strong presence in Bihar and Jharkhand. In the eastern and northeastern parts of the country, the brand performs admirably, although there is room for improvement in West Bengal and Odisha, where efforts to strengthen market share are underway. These regions collectively account for approximately 70-80% of Catch’s business.

However, in Maharashtra, as well as in the western and southern regions, the brand has not focused its efforts extensively. This strategic decision reflects the company’s commitment to catering to the unique tastes and preferences of each region, acknowledging that the flavor profiles preferred by South Indians, for instance, may differ significantly from those in the North.

As Catch plans to expand into these untapped markets, it is investing in developing region-specific products and infrastructure to ensure a successful entry. This approach underscores the brand’s dedication to thoughtful and strategic expansion by prioritizing quality and consumer satisfaction above all else.

With the spice category witnessing significant growth, particularly with the transition from unbranded to branded products, this shift has attracted major players to the market, creating favorable conditions for expansion.

Ghosh says that Catch is optimistic about capitalizing on this trend and is strategically positioned to benefit from it. While some sub-categories may require targeted efforts to boost adoption, Ghosh is confident in the company’s ability to address these areas through consumer engagement, communication, and product activation strategies.

However, he acknowledges the complexity of expanding into new markets while considering the returns on investment. But he also emphasizes the necessity of increasing retail expansion to reach a larger consumer base. Currently, Catch covers around six lakh outlets and plans to add another two to three lakh outlets within the next year. Although entering e-commerce and modern trade can be challenging, Ghosh believes that reaching consumers through these channels is achievable.

Ghosh also highlights the importance of effectively communicating the benefits of Catch products, such as value for money, convenience, and superior quality. He expresses confidence in the company’s track record of engaging consumers and believes that receptivity will continue to grow as long as Catch communicates its value proposition efficiently through advertising, branding, and in-store activities. “We have over 500 promoters nationwide to engage in both dry and wet sampling in modern trade outlets, and offer personalized communication and product demonstrations.”

Future Plans

Catch is venturing into several new categories, each carefully selected for its innovative potential. The brand is strategically positioning itself for significant turnover growth, recognizing the transformative power of these innovative categories. With a forward-looking approach, Catch aims not only to maintain a strong market presence but also to emerge as a leader in multiple segments, laying the foundation for future success.

Commenting on the company’s future plans, Ghosh mentions a couple of key priorities they’re focusing on. “Firstly, we aim to strengthen our sales infrastructure by expanding our distribution network 1.5 X over the next three years. Secondly, product innovation is paramount. We’re dedicated to enhancing efficiency to deliver greater value to our consumers. Additionally, we’re planning substantial investments in advertising and promotions to bolster our brand visibility.

He highlights the company’s recent positive growth trajectory and expresses confidence in maintaining this momentum in the future. “With expansion into new markets and product categories, we anticipate even stronger performance. While sustaining a 25% year-on-year growth rate over the long term may not be conventional, we believe our diversified approach and innovative product offerings position us for continued success. Our goal is not only to maintain a strong market presence but also to emerge as leaders in several segments

The company believes that achieving a Compound Annual Growth Rate (CAGR) of 30% is entirely within reach and aims to maintain a robust CAGR ranging between 25% and 30% over the next five years. This trajectory would result in a significant threefold increase in its performance metrics. “Reflecting on our past achievements, where we have more than doubled our numbers within three years, we are confident that tripling our figures within the next five years is not only feasible but also logical, reasonable, and rational,” asserts Ghosh.

Regarding forthcoming products slated for release in the near future, particularly within the next three to six months or throughout the current year, Ghosh acknowledges the numerous products in development but cautions against premature announcements. He underscores the company’s enduring enthusiasm for new launches, citing even modest offerings like a Rs. 5 sachet as cause for excitement.

While reiterating the brand’s commitment to enhancing consumer convenience and innovating packaging, he mentions one avenue of product exploration. “We are exploring various potential variants of biryani masala, especially considering India’s rich culinary landscape featuring over 243 registered types of biryani.” However, Ghosh refrains from divulging specific details and clarifies that these concepts remain in the research and development phase as they continue to gather insights into consumer preferences.

When asked if the company is planning any international foray in the spice domain, Ghosh states that historically, their company had minimal involvement in exports, primarily limited to sporadic supplies in regions like Dubai. However, they have since established a dedicated organization for international trade. The approach involves meticulous research to ensure they offer the right products tailored to each market, whether it’s Nepal, Bangladesh, or even the US. Their aim is to provide a superior product, surpassing local offerings and meeting the expectations of the diaspora seeking a taste of home.

He emphasizes the importance of attention to detail in their export plans. The company expects significant progress by year-end, with major developments in the first quarter of 2025. “Hopefully, by this year end, we should be into the export market. You will probably see a lot of news coming out, but that’s sometime planned in the financial year end. So, in the first quarter of 2025, probably you see a lot of action in the export front.”

The company is actively engaged in identifying markets for its export expansion efforts. On the radar are regions including Southeast Asia, the Middle East, Africa, and Europe. However, they are not merely looking to enter these markets with their existing product range. Instead, they aspire to introduce innovation by offering unique packaging and potentially diverse product variations. Although this initiative is still a work in progress, DS Spiceco remains steadfast in its commitment to establishing a strong presence in these regions.

With a steadfast focus on putting consumers first, Catch has established itself as an enduring brand that continues to stand strong in the industry. With over four decades of experience under its belt, it’s now gearing up for even greater achievements. Looking ahead, expect a delightful array of new, exotic, and authentic spices from Catch, perfectly encapsulating the essence of their tagline – “Kyunki Khana Sirf Khana Nahi Hota.’’

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