AASHIRVAAD ATTA : Converting Commodity to Brand

ITC launched Aashirvaad Atta on 27th May 2002 in Jaipur and Chandigarh. Today, it is available all over India and is the number one branded packaged atta across the country. The focus is kept on providing the best quality atta using the most traditional yet cumbersome methods. Through its PET poly packaging and E-choupal initiative, the freshness of the atta is guaranteed giving the consumers a confidence no other brand can comply. Khushiyaan Chun Chun ke (Happiness handpicked) is the motto of Aashirvaad atta and to achieve this, ITC buys wheat straight from the farmers using the sourcing strength of its e-Choupals.

Aashirvaad Select Atta (5 kg pack) was awarded one of the most prestigious awards in the world for Packaging- The World Star Award for Excellence in Packaging in the Consumer Pack Category. Aashirvaad atta also created a first in packaging in the branded atta category. Its premium offering, i.e. the 5kg premium pack, is available in vacuum sealing and carton packaging. Both these technologies help maintain the freshness of the product.

Aashirvaad Atta is formed from the choicest grains - hard in bite, golden amber in color and heavy on the palm. Modern 'chakki - grinding' process is used to grind it for the perfect balance of taste, nutrition and color ensuring in the process that Aashirvaad atta contains 100% Sampoorna Atta  and 0% Maida.

SWOT Analysis of Aashirvaad Atta

Strengths

·         ITC has been able to establish itself as the market leader in the packaged food market. Within 8 years after launching Aashirvaad Atta, it has become number one in branded packaged Atta sector across the country with a whopping market share of 55%.

·         The focus of ITC has always been on the providing its customer with best possible quality and in the case of Aashirvaad Atta also, they have emphasized on the quality and freshness. To keep the taste of packaged Atta authentic with respect to Chakki Atta, ITC follows traditional methods to produce it. It obtains finest wheat grains directly from the farmers and then the grains are grounded using modern 'Chakki - grinding' process to produce genuine and authentic Atta. ITC also tries to ensure that Aashirvaad Atta contains 100% Atta and no Maida. In addition, the quality is maintained such that the dough made from Aashirvaad Atta absorbs more water making the Rotis softer.

·         ITC has been able to successfully use its E-choupals initiative to obtain finest wheat grains for the production of Atta directly from farmers. This backward integration gives them two distinct advantages. The first being reduction in the cost of wheat by around 2 percent as no middlemen is involved in the process. The second advantage is of course quality since ITC does not have to rely upon the Mandi system where the wheat grain can be of inferior quality.

·         ITC offers a wide range of Aashirvaad Atta products to cater to different consumer demands. Apart from the basic brands, there are two high-end brands with some special ingredients.

·         ITC has its own packaging business and it utilizes its packaging business to come out with really superior and innovative packaging. The material used for packaging the Aashirvaad Atta is “PET Poly” which keeps the Atta fresh. Further, it also offers carton packaging and vacuum sealing for its premium packs.

·         Although ITC already had excellent distribution network for its cigarette products, it needed to develop new and different distribution infrastructure for its Aashirvaad Atta product. However, in the last 8 years it had really developed its distribution network and with its strong E-Choupal network it can compete with its competitors on the distribution front.

Weaknesses

·         Aashirvaad Atta can be considered as a premium priced product, as it is very costly when compared to unpackaged Atta sector.

·         Currently, the focus of ITC is on urban market with respect to packaged Atta sector and with packaged Atta sector still being less than 3% of the total Atta market; ITC can focus on rural market also to capture more of the unpackaged Atta market.

·         ITC has focused more on the retail shop based promotion strategy. However, to attract more and more customers, ITC needs to promote it more using TV and other media promotion strategies.

Opportunities

·         Food Industry is India’s sleeping giant. With the rise of modern retail formats, increasing disposable incomes and health awareness, the category is undoubtedly evolving. With the branded Atta market in India being very attractive in terms of size and consumption patterns, growth has also picked up pace with the Government’s proactive approach with the formulation of national food policy, reservation of select segments.

·         Apart from North India, which has always been very high in wheat consumption, ITC can concentrate in rice dominant regions such as Andhra Pradesh. Atta is used for mak¬ing puri, which is a popular breakfast item for South Indians.

·         ITC can collaborate with fast food chains such as McDonalds, Pizza Hut and Subway. This has been an untapped market until now and tying up with these chains as their main flour supplier can open up a new window for ITC. 

Threats

·         Indian market is largely dominated by innumerable local flourmills and ‘Chakki Atta’, which are the biggest threat to Aashirvaad atta. Chakki Atta is still perceived as the best quality Atta and it is cheaper as compared to branded packaged Atta.

·         Obvious threat is the domestic competition. Competitors such as Annapurna and Pillsbury are doing their best to increase their market share.

·         Until now, the competition is mainly domestic. In future when Western companies will see India as an exciting opportunity for packaged atta, then the competition will get intense.