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Rebranded Modern Food eyes 1,000 crore revenue by 2021
Targeting a revenue of Rs 1,000 crore by FY2021, bread major Modern Food Enterprises will soon be launching an entirely new range of bread and bakery items while looking at new food segments, said a top company official.
The company on Friday announced the relaunch of its Modern brand, with new brand positioning, identity and packaging. The new range of breads will focus on the health and wellness of the customers. Aseem Soni, CEO, tells us, “We are looking at a 25 pc increase in revenue by FY18, and at a goal to grow revenue four-fold by FY2021 to Rs 1,000 crore. In this context, we plan to strengthen our presence in the states and cities where we are already present, especially Tamil Nadu, Kerala, Telangana, Karnataka, West Bengal and Maharashtra, and expand our presence in white spaces in the North and West.” Soni added that the number of retail outlets would expand to over a lakh by FY2018 from the current 80,000.
The 25 per cent revenue growth in Modern in the current fiscal year will be significantly driven by volume growth of more than 20 per cent in the health and wellness segment. Talking about the company’s plans for this year, Soni says, “There is a lot of ongoing investments in upgrading the plants. We set up a new ‘innovation centre’ in Chennai six months ago, where we developed this new portfolio of products. The market for bread and its associate products is almost worth $1 billion in both the organised and unorganised sectors. We have a significant presence in the south – in Chennai our market share would be upwards of 70 per cent, while in Kerala, it would be upwards of 60 per cent.”
On the opportunities for growth, Soni believes that within the baked good segments, consumers are growing more informed and preferring items like croissants and exotic breads these days. “There are a lot of small players in this category and there is an opportunity to consolidate in a few states. But if we have to enter new cities, we will have to look at investments and collaboration.”
The brand and product relaunch is not only to attract young customers but also to retain the existing ones. Soni said the company would like to wean away premium customers frequenting neighbourhood bakers with its new range of products. “We will launch our new bakery products in six to nine months. A lot of innovations are in the research and development (R&D) stage,” Soni said.
In 2016, the company was acquired by private equity group Everstone Capital from Hindustan Unilever. Rajev Shukla, MD, Everstone Capital Asia, Singapore, and a Director on the Board of Modern Foods, stated, “Everstone will continue to work with Modern to aggressively grow the business – both organically and inorganically. The goal is to reach national leadership in three-to-five years in the bread and bakery and the wider packaged foods category.”
Last fiscal, the company closed with a turnover of Rs 270 crore. The target is to earn around one third revenue from selling bakery products by FY2021.