Case Challenge

August 06th 2017

Business Strategy- Aashirvaad Atta

Instructions:

Teams will submit a case analysis/solution document comprising no more than 6 pages of
single spaced, 12-point font (including illustrations and excluding TOC, Cover page). The
first page of the document must comprise of an executive summary of the solution
suggested by the team. The executive summary should be limited to one page only.
There is no pre-determined structure to analyse the case. Participants are free to use any
format which best illustrates and provides convincing arguments supporting their
solutions.
Wherever necessary, the participants must refer to the sources of information and data.
Case presentations will be judged based on the following criteria the originality,
creativity and uniqueness of the idea will receive the highest weightage; the feasibility of
implementation, sustainability and scalability of the idea; its fit with ITCs vision and the
manner in which it can leverage ITCs strengths; the thoroughness of research, analytics
and economic logic used to defend viability and execution of the idea.
Last date for submission of case solutions is 20 August 2017. Teams must send their entries
to the email ID provided for the campus
For full details, please refer to the Interrobang Season 7 Case Challenge Brochure available
with your Campus Point of Contact or contact interrobang@itc.in.
 Business Strategy- Aashirvaad Atta
ITC Interrobang Season 7 Case Challenge1

In the year 1999, a group was chosen from various fields with a singular agenda of creating a
successful food and beverage business at ITC. Ramesh and Romit, the two whiz kids in the
group, decided to approach a consulting firm to understand what could be the potential entry
segments for the business. After months of data collection and analysis, they created a huge
entry strategy for the business. Biscuits, Atta, Rice and Refined Oil were some of the initial set
of categories that they proposed to enter with.

On February 2000, they were summoned to share the entry strategy with the Board. After a
lot of deliberation, the board sanctioned the Foods Pioneering Team to start business with
the entry in Biscuits one of the largest food segments, Atta that was primarily unbranded
and hence was expected to have a great future- and Ready to Eat segment which they
envisaged the convenience seeking Modern India would adopt. The foods team was sent
from Kolkata to Bengaluru to start operations. Ramesh was entrusted with the responsibility
to start the category. One of the first thing that Ramesh did was to call his favourite research
company and gave them a detailed brief to explore the category. Mr. Josh the lead researcher
on the category came in with a very exhaustive approach. Considering that Ramesh had a
huge budget constraint, he decided to cut down on the scope & focus on the market construct
first. Josh came back in a months time and showed a dire market condition.

1This Case is developed by and is the sole property of ITC Limited. This is for academic purposes only and is not
intended to be copied or displayed or reproduced at any place outside the Campus.
Branded Atta was negligible in the market, with 0.2 Mn tonnes, which was approximately
Rs 660 Cr in value, and half of this was contributed by National players like Annapurna etc.
Although Ramesh was extremely disappointed to see this, he was also equally positive since
this segment was growing disproportionately at around 30% and a 3-year CAGR of 25%.

The entire ITC team regrouped along with Josh and decided on the next steps. The task was
to figure out the consumer perspective towards the category and more importantly the core
reasons why majority of people still consumed unbranded Atta. It was again a long gestation
period of around 8 weeks, post which few key issues understood by team were:

1. Lack of consistency of the Atta in the

Nature Fresh
bag leading to dissatisfied homemaker
22%
Annapurna and the family.
(HUL)
32% 2. Most consumers felt that Branded Atta
was grinded long time back and was
Healthy World
11%
packed later thus leading to loss of
freshness.
3. Most of the Atta brands were actually
Pillsbury
13% Shakti Bhog
22%
selling Maida and not Atta.
4. Atta was not grinded as per the need of
the consumer of that specific market.

While Ramesh was from Tamil Nadu and Romit was from Delhi, they soon realized that they
look at the category very differently and hence were extremely worried on how they will be
able to sell the same brand to different people of India using the same communication or brand
proposition.

West is the most evolved and discerning region, they rely a lot on their understanding of the
category and hence even today around 90% of people from a city like Mumbai continue to
buy wheat and then grind it, instead of buying Branded Atta. In North, it is an integral part
of their food habit and consumed multiple times in the day. While in the rice dominated
geographies of East and South, East has a more ingrained habit of roti consumption but South
is the non-frequent user of the category. The core reason for entry of the category in South is
primarily due to health reasons and is advocated primarily by doctors. With such diverse
level of acceptance of the category, it was evident that the same brand needs to communicate
differently to different people.

With all the required information, Ramesh now had to put a plan in place and execute the
same. He quickly gathered a small team, used the synergy of ITC group companies and within
a span of another two months they took the launch plan to the Board. The Board was
extremely happy and advised the team to hasten the launch and crunch the timelines by 6
months. Even today, the core principles laid down by Ramesh and Romit are being carried
forward.
They started to source Atta directly from farmers and today they engage with around 4500
Choupals from over 30,000 villages. With the help of their E Choupal experts, they choose the
best quality grains over 70 grades so that they can create optimized products for consumers
for every part of the country. To provide freshly grinded Atta, they created factories in
various locations and today they have more than 250 factories across the country to ensure
that Aashirvaad Atta can be delivered within a distance of less than 200 Km from any of the
large consumption market. Maintaining best in class quality is a core DNA of ITC and hence
to ensure that they designed 234 tests and 176 checks. Also with the help of ITCs Agri
Business Division, they created an SOP such that each bag of Aashirvaad can be traced back
to the farm from where the grain has been procured.

Post a few teething problems, Aashirvaad Atta slowly inched to become the largest branded
Atta in India. By this time, the Foods Division became the most sought after place for most
new joinees and some of the aspirant current employees within ITC. Ramesh called for a
celebration as Aashirvaad reached its landmark of Rs 100 Cr. However, this celebration did
not last long as Ramesh was quickly summoned by the Central Management Committee at
Kolkata to present a long-term strategy for Aashirvaad Atta business. Ramesh went back to
the research agency to look at the current trends and provide some inputs on what could be
the possible extension platforms for Aashirvaad. In the long briefing meeting with the agency,
the marketing manager of Aashirvaad, Vineeth insisted that it is important to put down few
of the core values of Aashirvaad and what that Aashirvaad doesnot represent. This, Ramesh
thought was a good input as it will act as guard rails to decide what the probable extension
platforms are.

A combination of consumer perspective, internal stakeholders beliefs and understanding of

the brand and the category, led to a detailed brand key for Aashirvaad. For simplicity,
everyone was handed a small note, which summarizes what Aashirvaad is, and what it should
never be.

Looking at the trend in consumer attitude and their eating habits, one of the variant extensions
suggested was meant for those consumers who are discerning, understand the category, are
knowledgeable and looks out for something that is best in class. Vineeth suggested the name
Aashirvaad Select. The entire proposition that he designed was that Select would be created
from Sharbati / Sehore grade of wheat, which is grown in a few fields of Madhya Pradesh.
This wheat is considered the king of wheat and hence rotis made of this wheat has a
sweetish taste and remains soft for a very long time.

Alongside they observed that consumers in India were becoming health conscious and were
not only talking about this need but were acting on it too. People started engaging in strategies
like cutting down on oil, sugar, started with some physical exercise like walking etc. Having
observed this, the second plank suggested was a launch of Multigrain Atta. The construct of
this product was such that it replicated the combining of Chana, Soya and Atta and to that;
they added Oats, Maize and husk. Through this product, the core benefit that Vineeth wanted
to provide to the consumers was a more nutritious Atta. It also would help the mother to
provide healthier rotis to the kids who generally create a lot of fuss in eating healthy food like
vegetables and fruits.

Having heard the two propositions, Ramesh was positive about them and satisfied that the
brand team was ready to take Aashirvaad to a next level. Over the next two years, Vineeth
and his team under the guidance of Ramesh communicated about Aashirvaad Select and
Aashirvaad Multigrain to generate a substantial incremental business for the organization.

Through the augmentation of the portfolio the value added part of Aashirvaad accounted for
more than 10% of the total business, however Vineeth and his team was also successful in
growing the core. Aashirvaad continued to dominate as the largest brand and the fastest
growing brand in the country.
Most of the growth was from converting the unbranded consumers to Aashirvaad user. Wheat
and Loose Atta contributed to more than 50% of Aashirvaads growth. In south India,
penetration of Aashirvaad grew to around 70% of urban households. Vineeth and his team
kept conducting yearly equity study only to realise that Aashirvaad has become an Olympic
brand across the country. The research agency also came back and told the brand team that
in the eyes of the consumer, Aashirvaad stood for joyful nurturance and this was in complete
sync with the desired values that the brand wanted to own.

While all the inputs worked positively for the brand, it was critical for the business to
accelerate the trajectory. Ramesh hence called his team and gave them an agenda:

1) What are the next levers of growth for the business?

a. Existing
b. New platforms
2) What should be the infrastructural requirements to make the new levers successful?
3) What are the marketing tasks to make both the next macro levers successful (existing
& new)?

He realized that one singular team if entrusted with trying to explore growth levers in the
existing business and identifying new avenues might find it difficult and he might achieve
suboptimal solutions in both. Therefore, he identified Anuj, a member of the current team, to
lead the new business.

Anuj soon realized that his search for new avenues needs to satisfy a set of criteria:

1) A large business opportunity of around 500 Cr and above.

2) It should be in harmony with a consumer trend.
3) It should abide by the brand world of Aashirvaad.
4) It should capitalize the business synergy of ITC (Agri Business, Paper Division, Hotels,
Lifestyle, etc.)

Anuj started with simple consumer ethnographic research work, trying to understand what
are the pain points in consumers life and what out of that various food products are being
able to solve and what of those they are still trying to search for a good solution. He travelled
across the country and met dozens of consumers across various life-stage and societal strata.
At every point in his research, a few strong themes emerged:

a) Health
b) New experiences
c) Showcasing oneself
d) Hunger to know more
e) A movement towards smaller meals throughout the day

While he was still trying to put his head around so much of information, he met Sudhir (his
counter-part) in a training program in Mumbai. Over the two-day training period at Mumbai,
he realized that Sudhir is privy to a large piece of research work dedicated to Health needs of
Indian consumers. Anuj realized that the core health needs or apprehension, which the
homemaker has for her husband and elders in the family, is around immunity, heart health,
diabetes, weight management and lack of energy and stamina. Next day morning when Anuj
was on his way back to Bengaluru, he found that a leading newspaper was carrying an article
on Diabetes and which mentioned that India has the second highest Diabetic population in
the world ~ 69.2 Million as of 2015. Moreover, as per WHO by 2030 India will have 87 Million
Diabetics. It also mentioned that as per experts one of the issues that a diabetic person faces is
sudden spike in sugar level in the body once the person consumes carbohydrates.

Anuj came back and interacted with the R&D division and found that they can create an atta
variant which can address the specific problem that the daily mentioned. He carried out a few
concept researches and came back with a plan to launch an Atta variant with clinical backing
to strengthen the credibility. He went back to Mr Ramesh and presented the business case.
After a lot of discussion, the decision was taken to go ahead with the launch.

Anuj made a 360 degree launch plan, decided on the distribution norms and executed what
appeared to be a flawless plans. However, post almost a year into the launch it was observed
that the offer was struggling in the market place to achieve the targets that it has set for itself.
Mr. Ramesh, Vineeth and the CEO of the Division Mr Dubey asked for a detailed review of
the launch. Below are some of the excerpts of his document which stated the inputs that Anuj
had executed on ground:

The usual 360-degree approach was taken, as we supported the variant with TVCs (almost 3 to 4 months
spread over 8 months; (https://www.youtube.com/watch?v=jzMJcg9-WVE), print ads explaining the
benefit and the ingredients and radio to support. Considerable amount of one to one interaction also
happened at modern trade and premium outlets. Considering that, this kind of an offer requires
credibility we went and met doctors (GP and endocrinologists explaining the product and the benefit,
requesting them to suggest the same to whoever they think needs it.

This was an ideal offer to use digital media as we needed to sharp target. Google network, Youtube and
Facebook were all used to speak to the relevant consumers basis their interests.
Other than activations through doctors and diabetic clinics, many other BTL investments were done to
support the launch like outdoor hoardings, metro train branding etc. Despite all the effort put although
awareness generated was around 30% to 40% but the conversion to trail was very weak to sub 20%.
The sales numbers reflected the business struggle as well.

Indexed Sales

266 242
194
100
First 3 6 Months 9 Months 12 Months
months

In the review meeting, Mr. Dubey and Mr. Ramesh asked some very relevant questions to
Anuj for which he did not have a response:

1) You have a business target of 6000 Tonnes in the year and as per the rate, it appears
that we will not even touch 4000 Tonnes. How do you plan to achieve it?
2) You have spent similar amount of money to what we generally do when we launch a
new variant but your brand measures are very weak Why is to so?
3) You have a clinically proven product; do you think you need to change your
communication plan?
4) Do you think you need to relook at the target group you are talking to? Currently you
are communicating to NCCS A, 45+ Yrs.
5) How should you optimize your spends going forward?
6) Should Aashirvaad enter into more of specific health benefit led products? If so what
should be the next set of line extensions? Hence, how should the portfolio look like 5
years down the line?
7) How should team Aashirvaad manage this portfolio from a supply chain perspective?
Should you focus on the traditional channels or do you need relook at the supply
chain?

Assume that you are part of Anujs team and you along with Anuj need to come back to the
senior management in the next 10 days with proper responses.