Indian nachos brand 'Cornitos' has expanded its presence in the hinterlands of the country with the launch of its products at lower price points as it looks to double its presence in the country. Cornitos, which is owned by family-owned FMCG firm Greendot Health Foods Pvt Ltd, will be launching smaller packs of its nachos chips priced lower as it looks to foray into tier 2, 3 towns.
Cornitos was first launched in India in 2009 and the currently sells Nacho chips (currently priced at Rs 35), nuts & seeds, taco shells, and also recently launched DIY kits. The company has now launched an affordable range of these products at 12-15 different price points across its range, focused on tier 2,3 towns.
"We initially launched Nacho chips for a specific customer segment – the younger generation in urban markets. The product has done very well and now we are seeing demand for it from smaller towns. Awareness of such snacking items has percolated into tier 2, 3 towns so we have decided to bring down the MRPs as smaller packs with reduced grammage so that way it can be affordable to a larger number of people," Vikram Agarwal, managing director, Cornitos told CNBC-TV18.
With this move, Cornitos will compete directly with PepsiCo's Doritos, which is the other major nachos brand in India. Doritos was launched in India in 2017 with price packs of Rs 25, 50 & 100. Most recently, PepsiCo India too launched Rs 10 price packs of Doritos with the aim of taping into smaller towns.
For its range of nuts and seeds too, Cornitos is planning to launch smaller packs priced at Rs 10-20 and make it available not just in modern trade, but also in smaller mom-and-pop stores.
The launch of cheaper priced packs also comes at a time when the snacks industry is seeing high raw material costs. However, Cornitos will not be passing on the impact of input price pressures to consumers.
"We are facing huge challenges due to erosion of margins on account of rise in prices of raw materials like oil, corn, packaging, transportation. We are absorbing the impact as we cannot transfer this burden on the consumer," Agarwal said.
Cornitos currently retails its products in 40,000 outlets in 300 cities with 500 distribution partners. With the new price points, the company plans to double it to nearly one lakh stores across the country.
Agarwal said the company has been seeing immense growth in the past few years, despite the pandemic. The company grew 25 percent in FY21 as compared to FY20 where Agarwal said that some months see a growth of around 200 percent. The company clocked revenues of around Rs 85 crore in FY21 and is eyeing a revenue of over Rs 100 crore by FY22-end.
"Both the COVID-19 waves had different consumption patterns. Last year people were sitting home and consuming more and enjoying a new normal but consumption fell in the second wave mostly due to the fear factor of the virus and family disturbances. Accordingly, we saw a dip in growth this year in April and May compared to last year," Agarwal added.
However, the company's institutional business, which contributes to 20 percent of overall revenues, took a hit during the pandemic especially in the HORECA segment with restaurants, malls, and theatres remaining shut. Agarwal expects this segment to bounce back to pre-pandemic levels only by the next fiscal.
But the company is ramping up the retail segment where the demand is currently coming from. The company also launched its own D2C platform to sell its products directly to consumers. Cornitos has also lined up expansion plans with new product launches in the pipeline.
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In addition to smaller packs and new price points, the company is planning to launch a new range of baked snacks in August. Cornitos will also look to add new flavours to its nachos range after a gap of over a year.
"Earlier used to launch a new flavor every 6 months but we haven’t launched a new flavor through the pandemic. The last was peri peri flavor that we launched in 2019. We are now looking at market trends over the next few months and will launch new flavors accordingly. It's still in the work," he said.
With in-home consumption growing through the pandemic, Cornitos has seen an uptick in demand for its Do-It-Yourself (DIY) range of snacks. This is a range of ready-to-cook wraps. The company will now launch more variants with different variants and combinations over the next few months. Agarwal added that there is a lot more in the pipeline that the company is planning to launch before Diwali.
First Published: IST