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Branding of sugar

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Sugar is viewed by consumers as a commodity and there has not been any initiative from several companies to create a differentiation.

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Branding of sugar

  1. 1. Branding of Sugar:The retail food sector in India is expected to grow from the current $70 billion to $150billion by 2025, according to consultancy firm McKinsey, that in comparison the worldfood industry, which stands at $175 billion will grow up to $400 billion by 2025. Thereare 10 million street vendors in India, of whom six million sell only food items. There issteady growth for sugar annually at 2%.As per the report, in the overall retail sector, food and grocery is the dominant categorywith 59.5 percent share, valued at Rs.7, 920 billion ($198.2 billion), followed by clothingand accessories with a 9.9 percent share at Rs.1, 313 billion ($32.9 billion). In theorganised retail segment, clothing and fashion accessories is the largest category with38.1 percent of the market share, valued at Rs.298 billion ($7.5 billion), followed byfood and grocery accounting for 11.5 percent of the organised retail market at Rs.90billion ($2.3 billion).Building a brandIndian sugar industry is worth Rs 25000 crore with the Percapita consumption of sugar islow at 20kg and Jaggery 5 kg. Unlike the Salt industry which saw many successfulbranded players, the branded sugars saw few.Sugar branding was initiated by players like Mawana sugars and Dhampur sugars. BCML,Modi Sugar, Ravalgaon, Simbholi Sugar also forayed in to Branded sugars. Daurala sellsonly 1% of our total production under the Daurala brand. The domestic packaged sugarmarket is estimated at 40,000 ton. The share of sugar in total consumer expenditure isjust 2.4 per cent in rural India and 1.5 per cent in urban India. The first movers got theadvantage and these players now have a 30 percent market share. Although the marketsize of sugar industry is large, 75% of the sugar is consumed by large buyers like bakeries,Soft drink manufacturers and confectionery players. Hence most of the marketing is B2B.Sugar is viewed by consumers as a commodity and there has not been any initiative fromseveral companies to create a differentiation. Parrys has launched its branded sugarwith focus on its quality and purity. It is known fact that the best way to brand acommodity is to focus of these two attributes. Parrys claim they are better refined andpure than the unbranded sugar. Packed in attractive pet bottles, the brand sells at apremium of Rs 3 - 10 over the unbranded ones.The market for sugar is a highly price sensitive, While in the case of salt the presence ofIodine was a sufficient differentiation for establishing the brand. The Iodine deficiencycould cause thyroid and customers were educated by the government and the saltmarketers to prefer iodized salt. But in the case of sugar, those differentiationopportunities were absent.Different factors that caused the slow start of branded sugars are:
  2. 2. a) Seasonality: sugar production is seasonal and the entire years productions should be completed within 5-6 months. Hence there is no time for product or process innovations. b) The sugar play is high volume low margin game. Hence whether marketers are interested in exploring the value added game is another factor that slows down the growth of branded sugar market. While branding involves promotional costs, it will be a tough tradeoff since margin pressure will prevent aggressive brand promotions. c) The large format retailers have also started selling packed sugar with a premium of 2 to Rs 5 making the consumers think that the packed sugars are better refined than the other one.The main factor behind the branded sugar lagging is the lack of differentiation. In thewest, marketers try to add value to this commodity by enriching it with vitamins byFortification and also manufacturing Low GI Sugar.With alternate sweetener market slowly catching the attention of urban consumer(Stevia and low Glycemic sugar) which are being sold at premium there is need to bringvalue addition to this commodity which is reeling under policy regulations curtailingprice .Branding a commodity always has been a challenging task for marketers. Now in thepresent times Sugar is whiter & regular in grain size (Crystal). Main problem in bulkopen sugar is dust as its Hygroscopic; all branded sugar is dust free. Sugar is mostattractive to bacteria, in branded it is hygiene packed as in untouched by hand. SugarTechnology got upgraded and most sugar is now free from chemical and other residues.In the absence of big branding, brand equity for white sugar led to the idea of Specialtysugar products such as sugar cubes (white and brown), sachets, mineral sugar, breakfastsugar, icing sugar, candy sugar, Demerra sugar and others. These specialty sugarvarieties offer value to consumers in terms of taste, form and packaging.
  3. 3. Overview of Sugar Industry Specialty sugar segment can be broadly classified intoretail, food and beverage, pharma and candy bulk. From refined sugar, 21 types ofspecialty sugar can be made. A few varieties of flavored sugar are being marketed bycompanies besides sugar manufacturers and are receiving positive response fromconsumers. Various types of specialty sugar in different sizes, colors, shapes and packingare available in modern departmental stores as well as retail chains. For instance,Demerra sugar is a global name for brown sugar or coffee sugar, which is seen to bepreferred more by consumers over white sugar.Specialty sugar like icing sugar is preferred for making cakes and therefore has aspecialized use. Mango, coconut, lemon and orange flavored sugar, which areconsidered healthy and are apt substitutes to be used in drinks.The different types of granulated sugar and their suitability for usage are as given intable below: Type Usage Special characteristicRegular sugar house hold use, food Easier for bulk handling, not susceptible processing to cakingFruit sugar Dry mixes like gelatin uniformity of crystal size prevents desserts, pudding mixes separation or settling of smaller crystals and drink mixes. at the bottom of the boxBakers special baking industrySuperfine sugar sweetening fruits and iced- dissolves easily drinksConfectioners or icings, confections andPowdered Sugar whipping creamCoarse sugar making of fondants, highly resistant to color change or
  4. 4. Sugar Production in India (Mn Tons)30.0 24.525.0 18.920.015.0 14.510.0 5.0 0.0 2008-09 2009-10 2010-11Facts on Sugar Branding & Developments
  5. 5. confections and liquors inversion at high temperaturesSanding sugar to sprinkle on top of baked large crystals reflect light and give the goods product a sparkling appearanceBrown sugar: It is used in home and food industry to develop the rich molasses typeflavor in cookies, candies and similar products. It consists of sugar crystals coated inmolasses syrup with natural flavor and color.Many sugar refiners produce brown sugar by boiling a special molasses syrup until thebrown sugar crystals are formed. A centrifuge spins the crystals dry. Some of the syrupremains giving the sugar its brown color and molasses flavor. Other manufacturersproduce brown sugar by blending special molasses syrup with white sugar crystals.Liquid sugar: Liquid sugars were developed before todays methods of sugar processingmade transport and handling granulated sugars practical. Liquid sugar is essentiallyliquid granulated sugar and can be used in products wherever dissolved granulated sugarmight be used.Invert sugar: Inversion or chemical breakdown of sucrose results in invert sugar, anequal mixture of glucose and fructose. Available commercially only in liquid form, invertsugar is sweeter than granulated sugar. It is used in carbonated beverage industry andin food products to retard crystallization of sugar and retain moisture.Sugar produced in India is mainly of granulated type. Granulated sugar is furtherclassified in to various types based on color and grain size. According to the IndianStandards Specifications (ISI), there are around 20 grades of sugar based on the grain sizeand colors. The color series has four grades designated as 30, 29, 28 and 27, while thegrain size has five grades namely A, B, C, D, and E.Bulk of production in the country is of C, D and E grains, branded as large, medium andsmall and has color specification of 30. The D grade produced in the country iscomparable to world standards
  6. 6. Overview of Sugar Industry Specialty sugar segment can be broadly classified intoretail, food and beverage, pharma and candy bulk. From refined sugar, 21 types ofspecialty sugar can be made. A few varieties of flavored sugar are being marketed bycompanies besides sugar manufacturers and are receiving positive response fromconsumers. Various types of specialty sugar in different sizes, colors, shapes and packingare available in modern departmental stores as well as retail chains. For instance,Demerra sugar is a global name for brown sugar or coffee sugar, which is seen to bepreferred more by consumers over white sugar.Specialty sugar like icing sugar is preferred for making cakes and therefore has aspecialized use. Mango, coconut, lemon and orange flavored sugar, which areconsidered healthy and are apt substitutes to be used in drinks.The different types of granulated sugar and their suitability for usage are as given intable below: Type Usage Special characteristicRegular sugar house hold use, food Easier for bulk handling, not susceptible processing to cakingFruit sugar Dry mixes like gelatin uniformity of crystal size prevents desserts, pudding mixes separation or settling of smaller crystals and drink mixes. at the bottom of the boxBakers special baking industrySuperfine sugar sweetening fruits and iced- dissolves easily drinksConfectioners or icings, confections andPowdered Sugar whipping creamCoarse sugar making of fondants, highly resistant to color change or

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