Cooking Oil

an overview

Indian Edible Oil Industry

India is the 4th largest edible oil market after USA,
China and Brazil
The domestic edible oil market is estimated at USD 25
billion (Rs.120,000 Crores)
India is expected to import 10 million tonnes of edible
oil in 2011/12; Palm and soy oils constitute more than
95% of total edible oil imports
Increasing trend of consumer shifting towards
branded/packaged oil
Branded oil segment in India is annually growing at the
rate of 20%, with sunflower and soy oils leading the
market

Indian Edible Oil Industry

Major Players
National Dairy Dev Board
ITC Agro-Tech (Secbad)
Marico Industries (Mumbai)
Ahmed Mills (Mumbai)
Adani Wilmar (Mundra)

Hindustan Lever (Mumbai)

Wipro (Bangalore)
Rasoi (Kolkotta)
Avi Industries (Mumbai)
Kaleesuwari Refinery
(Chennai)

The total edible oil consumption in India is around 18 million tons pa

Indian Edible Oil Industry

Per capita Consumption
Extreme Variation: Top 10%
Bottom 30%

consume 20Kg per capita;

consume 5Kg per capita

Average Per capita consumption is 16Kg

Strong regional preference for first press oils with
natural flavours mustard, groundnut, coconut oils

Market Segmentation
Income
High: highly health conscious premium brands, olive oil,
PUFA (Poly Unsaturated Fatty Acid) Oils
Medium: safety refined sunflower, soya oil
Low: utility loose oil manufactured by local players

Region
North Mustard, Rape
East - Mustard, Rape
West - Groundnut
South Groundnut, Coconut

Market Segmentation
Consumer Classes

2007 2011

Rich (Rs. 1Crore + p.a.)

3Lac

HNI (Rs.36Lacs + p.a.)

Consuming (Rs.6Lacs Rs.36Lacs)

59Lac 65Lac

Climbers (Rs.2Lac -Rs.6Lacs)

Aspirants (Rs.30,000 Rs.2Lac)

74Lac 82Lac

Destitute (< Rs.30,000 p.a.)

13Lac 12Lac
254La 272La
c
c

Total Homes

5Lac

90Lac 95Lac

15Lac 13Lac

Market Size of Cooking Oils

Coconut Oil:
Olive Oil:
Safflower Oil:
Ricebran Oil:
Sesame Oil:
Soya Oil:
Palm Oil:
Mustard Oil:
Groundnut Oil:
Sunflower Oil:

Rs. 1,600 Crores (Rs.750Crores branded)

Rs. 1,500 Crores (30,000 Tons)
Rs. 610 Crores (77,500 Tons)
Rs. 2,150 Crores (0.5 Million Tons)
Rs. 1,200 Crores (0.2 Million Tons)
Rs. 7,800 Crores (1.2Million Tons)
Rs.25,000 Crores (5 Million Tons)
Rs.24,000 Crores (3 Million Tons)
Rs.16,000 Crores (2 Million Tons)
Rs.48,000 Crores (6.4 Million Tons)

Total Cooking Oil Market Size: Rs,1,27,860 Crores

Major Brands

Sundrop Pricing

Sunflower Oil

Channel Arrangements
There are 2 broad categories of Channels
Independent Channel
Dependent Channel
Independent Channel has conventional distribution
arrangement, a channel member negotiates deals with others
that do not result in binding relationships
Dependent Channel, also called vertical marketing system, a
channel member feels tied to one or more members of the
distribution channel

Dependent Channel Arrangement

Dependent Channel Arrangement can be further classified as
Corporate supplier operates its own distribution
system in a manner that produces an integrated channel
e.g. Starbucks
Contractual a legal document obligates members to
agree on how a product is distributed
Wholesaler-sponsored
Retailer-sponsored
Franchised
Administrative a single member may dominate the
decisions that occur within the channel
e.g. Procter & Gamble, Wal-Mart

Factors in creating Dist. Channels

Product Issues
The nature of the product often dictates the distribution options
available especially if the product requires special handling
Promotion Issues
Distribution decisions are affected by the type of promotional activities
needed to sell the product to customers
Pricing Issues
The desired price at which a marketer seeks to sell their product can
impact how they choose to distribute
Target Market Issues A key decision in setting up a channel
arrangement is for the marketer to choose the approach that reaches
customers in the most effective way possible

Distribution Mapping

Distribution Mapping - Cities

High Frequency
Stores

3%

7%

20%

Distribution Mapping - Cities

Modern Trade Outlets
(Large # of outlets)

Controlled
by retail
owner

20%

Distribution Mapping - Cities

Modern Trade Outlets
(Fewer outlets)

Gold Winners excl.

distributors

10%

20%

Distribution Mapping Rural/

Upcountry

3%
5%

8%
14%

Warehousing Essentials
Central Location
Insist on ISO 9001:2000 certification
Serving entire geographic region
Warehouse of 25,000 Sq.ft with 'A' class RCC construction
and able to provide any required space at any time
All warehouses to be well identified through marking and
display boards

Warehousing Essentials
Adequate safety measures have to be ensured as per
requirement
Have 5+ registered transporters to serve even micro
interiors in the state
For local transportation, have 3 -wheelers and a Minivan
Have warehousing and liaisoning services at nodal
points also for huge industries

Hub n Spoke Distribution Model

Chenglepet

Vellore

Chennai
Hub

Kanchipuram
Thiruvallur

Vizhupuram
Feeder Markets

Hub n Spoke Distribution Model

Indore
Aurangabad

Mumbai

Hub

Pune
Dadar & Nagar Haveli

Goa & Panaji

Feeder Markets

Hub n Spoke - Advantages

The small number of routes generally leads to more
efficient use of transportation resources.
Complicated operations, such as package sorting and
accounting, can be carried out at the hub, rather than
at every node.
Spokes are simple, and new ones can be created easily.
Customers (Dealers) may find the network more
intuitive. Scheduling is convenient for them since there
are few routes, with frequent service.

Questions?

Hari Prabhakar
98943 89188
9566 206 777