It’s fair to say that Kishore Biyani-led Future Group knows a thing or two about private brands. Historically, the Biyani family started its journey in fashion from selling fabric to making garments, and then, finally, retailing these garments as well. This knack for home-grown products, says Ashni Biyani, Kishore Biyani’s oldest daughter, is something the Future Group is replicating in food and FMCG (fast-moving consumer goods) as well.

Through its Future Retail arm—which owns supermarket chains such as Nilgiris, Easyday and Big Bazaar—Future Group is looking to sell an army of its own brands. From baked goods and organic staples to toilet cleaners and skin care products. Ashni Biyani, incidentally, is the MD of Future Consumer Ltd (FCL), the entity which houses all of Future Group’s private grocery and FMCG brands. These products, it hopes, will give it the cutting edge in a grocery retail market where modern grocery retailers—hypermarkets, supermarkets—like itself account for less than 3% of the market.

According to 2018 data from market research firm Euromonitor, while the Indian grocery retail market was valued at Rs 25,36,380 crore ($367 billion), modern grocery retailers accounted for just Rs 60,800 crore ($8.8 billion). The rest of the market belongs to the estimated 12 million kirana stores (mom-and-pop stores) spread across the country.

With such a small share of the grocery retail pie to play for, modern grocery retailers see a unique opportunity to maximise margins through private labels. It’s not a new trend either—it took root in India in the early 2000s. Up and down the country, grocery retail chains began making and selling their own products. Many brands, like Tasty Treat (by Future Consumer) and Masti Oye (by Reliance Retail)—all manufactured, packaged, marketed, and distributed by modern retailers—were born.

The retailers’ own children.

Zero marketing cost. Zero distribution cost. High discoverability at stores through premium shelf space. Family perks.

The process was simple enough. Choose a low-involvement category of a leading FMCG brand. Pick the highest selling product from the category. Tweak it a bit. Change the packaging. Voila! A new private brand is born. In India, private brands started as either straight-forward copies of whatever FMCG product sells well or products in low product differentiation categories like staples.

Enter customers.

Case 1: Look for their favourite brand. Pick up an item. Also, pick up a private brand or two.

Case 2: Look for their favourite brand. Fail to find it. Pick up a private brand instead.

Case 3: Look for the cheapest item in a category, which inevitably ends up being a private brand.

That’s how these private brands entered the lives of consumers. One shopping trip and category at a time. And over time, the private label movement has hit critical mass.

AUTHOR

Rozelle Laha

Rozelle joins The Ken in Mumbai from Fortune magazine, where she was a Principal Correspondent covering retail and FMCG. In her seven years of experience, she has written for publications including Hindustan Times, Mint, and Businessworld. Rozelle also spent some time working in the PR industry. At The Ken, Rozelle will track leading retail and internet companies from Mumbai.

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