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A Project Report on Nature Valley Growth and opportunities.

By Akhil Malhotra

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1 billion. Retail distribution in Bangalore There are two forms of retail in Bangalore. some examples being: • • • • • Unilever General Mills Nestle Cadbury Coca-Cola FMCG Characteristics The main characteristics of FMCG products are that they can be produced at a relatively low cost and are sold frequently. modern and tradition.Introduction – FMCG The Indian Fast Moving Consumer Goods (FMCG) sector is the 4th largest in the Economy. The market is essentially full of Consumer Non Durable products. Modern Retail 2 . The market size for this sector is in excess of US$13. which in turn are used in everyday situations by majority of the population. but the total profit will increase incrementally due to the large proportion of products sold. There is a large presence of Multinational companies in the FMCG sector. The profit levels per piece may not be high.

Most Modern format outlets will be given credit for their stock for approximately 30-35 days. but the size of orders may be larger. 3 . however the amount of actual outlets is less than that of traditional retail.Modern retail is a new type of retail in India. There are numerous chains of modern retailers.

4 . The DSM will then give the order to the distributor who will inform the company and then the next day the order will be sent to the shop. Traditional trade outlets will pay upfront for the goods they receive. From there the stock would be routed to the appropriate outlet when it is required. There is a huge amount of outlets. The outlet will first be visited by a DSM who will take the order from the outlet.Traditional Retail Traditional retail accounts for a large proportion of trade in India. In traditional trade there is a different system in place. Stock would then be sent to the stores distribution center. This is therefore an automated distribution system. however the size of the outlets are far smaller than that of their Modern Retail counterparts. hence smaller orders being placed per outlet. Distribution In Modern retail orders would be placed via email directly from the outlet to the company.

• • To study the position of the Nature Valley in relation to competitors product. Secondary Source data will also be used in the study and analysis of Nature Valley in retail stores regarding sales figures and competitors’ placement. Data will be obtained from various consumers of FMCG products in Modern Trade Format outlets. The project will last approximately 8 weeks. from the 12th of July till the 3rd of September. visibility and category movement of Nature Valley and its competitor products in modern trade format and traditional trade format.Project Description This project will be a study of the awareness levels of the Nature Valley Granola Bars in Bangalore. I will also be looking to study the retention rates. To study the market capitalization of Nature Valley products in total sales. • Understanding about the functioning of merchandising system. The main objectives of the project are: • To check the availability. visual merchandising and display. as well as Shop-keepers and owners of Traditional trade outlets. I will be looking at the depth and breadth of awareness of Nature Valley and its Competitors. 5 . this will lead me onto the current distribution penetration levels in functional food outlets. • To know the impact of Retail Visibility on customers ultimate purchase intension.

where as in the US there is a vast amount of varieties of bars. There are several varieties of Nature Valley bars: • Crunchy o o o • Roasted almonds Oats and Honey Apple Crunch Chewy o o Fruit and Nuts Mixed Berry Nature Valley is a very new concept to the Indian Market. and flavors. Main differences include the differences in flavors available for Crunchy bars. Crunchy Nature Valley Crunchy bars were introduced into the Indian Market in There are 3 flavors of the Crunchy granola bar: • • • Oats and Honey Roasted Almonds Apple Crunch 6 . There are several noticeable differences between Nature Valley in India and Nature Valley in the UK.Product Description Nature Valley Granola Bars are snack bars that are 100% natural.

This would mean that the current Indian functional food market would be valued at US$ 540 million.0billion is nutraceuticals. Chewy Nature Valley Chewy bars were introduced into the Indian Market early 2010. There are 2 flavors of Nature Valley Chewy: • • Fruit and Nut Mixed Berry These bars are manufactured in India itself.1 billion roughly US$ 1. 7 . “Nutraceuticals can be broadly categorized as products which are extracted from natural sources… which supplement the diet to provide nutrition over and above regular food…” Functional foods hold approximately 54% of that sector.The bars are manufactured in Spain. Of that US$ 13.1billion in India. Market Size As stated above the market size for FMCG is approximately US$13.

an alternative to wholesome granola. and lower quality ingredients such as chocolate and milk. this is mainly due to the fact it is made from cereal. NutriBar is a nutritional snack available in 3 flavors: • • • Choco Crispy Cereal ‘n Milk Nuts ‘n Raisins RiteBite Energy Bar RiteBite is the second competitor for Nature Valley. NutriBar had a larger launch in comparison to Nature Valley and this has meant that a lot of outlets are stocking it. Also the depth of awareness with NutriBar is far larger than that of Nature Valley. Cost wise it is also cheaper to purchase than Nature Valley.Major Competitors There are 2 major competitors to Nature Valley. RiteBite’s main selling point is the multiple varieties which are suited for every conceivable situation: • Sugarless Diet bar o Apple Cinnamon Choco lite • • • • • Choc Delite Nutrition Bar • MerryBerry Low Fat Bar • MultiVitamin Bar Herbal Nutrition Work Out Gym Bar Fruity Choco Nutrition Bar• Krunch Nutrition Bar 8 Women Nutrition Bar o Honey and Nut o • Smart Nutrition Bar . However this does seem to be a selling point for it as that price difference is sometimes why people will purchase it over Nature Valley. they are: • • Horlicks NutriBar RiteBite Energy Bars Horlicks NutriBar Horlicks NutriBar is one of the main competitors to Nature Valley in the Indian market.

9 .In terms of an advertising campaign RiteBite has had several TV advertisements in India.

While looking around I could not even find one bar. The most shocking/interesting thing was that even with a large banner and free Nature Valley bars people were still saying they had never heard or seen anything about Nature Valley. During the weeks in the middle I visited several different areas of Bangalore to see some Traditional outlets. During the first week I was based at HyperCity. however this is not the most shocking fact I found. Also I didn’t hear the phrase “Nature Valley is a snack bar which is 100% Natural” as much as I would have liked. This was worrying until I was told by an employee that they had sold out of the chewy bars. One foreseeable problem was that there were lots of DSMs referring to Nature Valley as a biscuit or even worse as a chocolate.Findings For the last few weeks I have visited quite a few modern retail and traditional retail outlets in various areas of Bangalore. I was informed that Nature Valley chewy stock had actually been sent to the outlet so I was looking forward to seeing how it was doing. During the week I was there numerous promotions were running. which is a large modern retail outlet. The promotion was that if you showed your membership card you would receive a free Crunchy Bar. The fact that there were outlets not stocking it came as a surprise as there were numerous outlets which stocked Horlicks NutriBar. a large proportion of the outlets I visited did not stock Nature Valley and some had never even heard of it. A few weeks after the initial visit I went back to HyperCity to see how Nature Valley was doing. one of which was Nature Valley related. I was conducting some market research with questionnaires1 to gauge the awareness levels of Nature Valley. So during my market research I found that a roughly 20% of the people saying yes they had heard of Nature Valley were actually “ex-pats”. 1 Questionnaire can be found in appendix 10 . this would not help if you’re trying to generate a healthy image for your product.

The jar contains 12 bars of Nature Valley chewy bar. 11 . and I thought as it is at the front of the store it will raise awareness for the brand very passively.Something in tradition retail that I thought was good was that a few DSMs were actually getting the Nature Valley jar orders successfully. This means with a smallish investment you can raise awareness in a targeted area.