1

RETAIL PENETRATION STUDY OF EDIBLE OIL

MARKET IN HYDERABAD

Prepared for

Adani Wilmar

Prepared by

Sidharth Choudhari

PGDM - MM1012121

Balaji Institute of Modern Management

Pune – 411 033

July 2011

2

ACKNOWLEDGEMENT

I am highly indebted to Mr. VIPUL RAJYAGURU for his guidance

and constant supervision as well as for providing necessary

information regarding the project & also for his support in completing

the project.

3

CERTIFICATE

This is to certify that this internship report on “Retail Penetration study of

edible oil market in Hyderabad ” at Adani Wilmar is a bona-Fide work of

Mr. SIDHARTH CHOUDHARI under my guidance and support. This report

is a part of Post Graduate Diploma in Management (PGDM) course with

specialization in MARKETING stream and content and the work done is

genuine with respect to the information covered and thought expressed. The

internship period was of two months ( 1st june 2011 – 31

st july 2011 ).

Mr.VIPULRAJYAGURU

SeniorManager

ADANIWILMAR LTD.

DATE:

PALCE:

4

CONTENTS

TOPIC PAGE NO

1.Executive Summary 5

2. Introduction about the Industry 7

3. About the Company 9

4. Research Objectives & Methodology 11

5. Data Analysis and Interpretation 12

6. Conclusion 25

7. Recommendation 26

8. Limitation 27

Annexures

i) Questionnaire

5

CHAPTER 1

EXECUTIVE SUMMARY

The research conducted was objective in nature. Hyderabad city was surveyed to attain

certain objectives. The survey was conducted to analyze the retail penetration of the

various brands available in the market, classifying the various types of stores i.e general

stores, oil stores, food stores, grocers and other stores also analyzing the size of the

various shops and the number of brands that they keep in the various categories like soya

bean oil, sunflower oil, olive oil, mustard oil, palm oil and also finding the penetration of

the various brands of basmati rice .

With these objectives in mind survey was conducted in Hyderabad city. Questionnaire

method was used along with interviews to obtain the required information. Care was

taken so that the responses could be collected from maximum number of shops from a

particular area and also the adjacent areas. The areas on which the brand track survey

was done from the housewives were selected along with some other areas close by.

The sample size of 200 respondents was taken for this purpose from various parts of

Hyderabad. All the four zones of the city were considered to have an overview of the

brand presence in various stores.

After the survey was complete , the data was first sorted then analysed on chosen

parameters. This analysed data was later converted into form of graphs such as bar

graphs . This was to make results easily comprehensible by anyone going through the

report. This also made it easy to draw conclusions based on the research and provide a

presentable format of the report.

Later on , all this information was compiled in the form of a presentable and highly

comprehensible report.

The important findings are:

Most of the outlets visited were multibranded.

Among the total shops that were covered maximum shop owners were stocking

Goldrop , followed by stocking of Ruchi Gold , Krishna & Vijaya , Fortune.

According to most of the shop owners consumers prefer Goldrop in the sunflower oil

segment, the presence of Goldrop is most of the shops indicate the good distribution

network of the brand.

In the palm oil category Ruchi Gold is the leader outplaying most of the other players

with its presence. Goldrop manages to be a distant second player when it comes to the

retail penetration. Shop owners expressed that Ruchi Gold is the leader when it comes

to palm oil category when it comes to Hyderabad city.

6

In the category of Olive oil Figaro is the front runner with its presence in most of the

stores followed by leonardo.This category do not include the Indian players. Its an

expensive oil . All the companies are generally Italian in this segment.

Most of the purchase made by the respondents was made from the local market (

Begum bazaar is a huge market when it comes to edible oil category in Hyderabad).

Distributer supply was found in a few cases.

Most of the dealers knew about the brands but said that since only a few brands sell

they have stopped stocking the other brands.

The schemes provided by the local brands like Goldrop are much lucrative to the

shop owners and they get good credit from the market as well as some distributers.

In the Basmati rice category India gate rice dominated followed by Kohinoor, Dawat

and some other brands.

7

CHAPTER 2

INTRODUCTION – ABOUT THE INDUSTRY

The edible oil industry is one of the leading sustainers of the positive annual economic

growth rates. The raw materials required for edible oil processing are sunflower, cottonseed,

soybean, oil palm. The other available oilseeds are sesame, peanuts and oil fractions of crop

plants. The major product of edible oil is processing vegetable cooking oil, which is used for

frying. Generally, the crude oil is purchased on large scale, refined and then sold either as

bulk or packed items.

The domestic demand for edible oils has grown at a

CAGR of about 5% from FY 2000 to FY 2010 mainly driven by improving per capita

consumption. India’s annual per capita consumption of about 12.7 kg is well below the world

average of 20 kg; thus signifying substantial growth potential for the edible oils industry. The

growth of branded edible oils is expected to remain favourable on the back of the

development of the retail sector and rising income levels. The consumption pattern of edible

oils is a function of regional tastes, preferences and relative price levels. Palm oil is the

cheapest variety of oil and accounts for around 35-40% of overall consumption. The

dependence on imports remains high due to less than adequate growth in production. Imports

contribute to 45% of total consumption with certain segments like palm oil relying entirely on

imports.

The demand growth for edible oils is expected to be favourable driven by

growing population, increased per capita consumption and increasing affluence levels. India’s

annual per capita consumption has shown an increasing trend; growing from 4 kg in the

1970s and 10.2 kg in the late 1990s to a current level of 12.78 kg.

However, this is well below the world average of around 20 kg thus signifying substantial

growth potential for the edible oil industry. The demand for the

overall edible oil market is expected to grow between 3-4% p.a. The growth rate for the

branded edible oil segment (currently 15% of total market) is expected to be higher than the

average driven by increasing income levels, spread of modern retailing and preference of

consumers for quality products.

8

List of Leading Edible Oil Manufacturers in India

2009-10

TOTAL TURNOVER

(RS. CR.)

Ruchi Soya 13,435

Adani Wilmar 6,109

Cargill India 6.042

KS Oils 4,030

Gokul Refoils 2,819

Marico 2,031

Sanwaria Agro 1,117

Source: ICRA Online Analysis

The oil industry is witnessing a 6% compounded annual growth rate (CAGR), while the

branded sector is growing at about 15-20%. Marico Industries' Saffola is seeing a CAGR of

13%, while its Sweekar has a CAGR of 8%. Mother Dairy's Dhara has a growth rate of 6%.

Adani Wilmar's Fortune has a CAGR of 24%.

9

CHAPTER 3

ABOUT ADANI WILMAR

The Adani Group is a Gujarat based Indian conglomerate with the industrialist Gautam

Shantilal Adani as its CMD and promoter. Founded in 1988, the Adani Group .One of

India's fastest-growing business houses The core business of the group is Commodities

Trading, edible oil Manufacturing, Mundra port operations and distribution of Natural

Gas.Adani Group the leader in International trading, Power Sector and Private

infrastructure.

Adani Group is a business behemoth based in India having a global footprint with

interests in Infrastructure, Power, Global Trading, Logistics, Energy, Port & SEZ,

Mining, Oil & Gas, Agri Business, FMCG products, Real Estate Development,

Bunkering.

The entire business of the group is organized under two companies: Adani Enterprises

Ltd. and Mundra Port and Special Economic Zone Ltd. Both companies are listed on The

National Stock Exchange of India (NSE) and The Bombay Stock Exchange (BSE).

The Wilmar Group

Wilmar International Limited, founded in 1991 as a palm oil trading company, is today

Asia's leading agribusiness group. It ranks amongst the largest listed companies by market

capitalisation on the Singapore Exchange .

Its business activities include oil palm cultivation, edible oils refining, oilseeds crushing,

consumer pack edible oils processing & merchandising, specialty fats, oleo chemicals and

biodiesel manufacturing, and grains processing and merchandising

The leading importer of edible oils into East Africa and one of the largest importers of

edible oils into South- east Africa.

The largest global processor and merchandiser of palm and lauric oils.

The largest edible oils refiner in Ukraine.

10

Headquartered in Singapore, its operations are located in more than 20 countries across

four continents, with a primary focus on Indonesia, Malaysia, China, India and Europe.

Overview of Adani Wilamar

Adani Wilmar Limited (AWL), a Rs. 6500 crore company is a joint venture between

two global corporations. Adani Wilmar Limited is a 50:50 joint venture between two

recognized Multinational Corporations – the INR 275 Billion (US $5 Billion), and

Wilmar International Limited, Singapore, Asia’s leading Agri business group with

revenues exceeding US $16.5 billion.

Together, the Adani Group and Wilmar Group have set up India's first port based

refinery at Mundra, Gujarat. Today the Mundra refinery is one of India's largest and

most sophisticated oil refineries. FORTUNE, King's, RAAG, Bullet, Fryola and

JUBILEE are the brands under which AWL(Adani Wilmar) sells its range of edible

oil, vanaspati and bakery shortening.

The company has production infrastructure across the country with a crushing

capacity of over 6000 TPD (Tonnes per Day) and Refining capacity of over 5000

TPD.

AWL is one of the very few national players in the Industry to have this massive

production infrastructure, with all its plants so strategically located to take advantage

of the Import Parity and Domestic crop season.

With 80 branches, 5000 distributors catering to 1 million outlets, AWL's products

reach to 20 million households across India.

The company also has packing operations at Kadi [Gujarat], Latur [Maharashtra],

Jaipur [Rajasthan], Dharwad [Karnataka], Dewas [Madhya Prades], Nagpur

[Maharashtra] and Cochin [Kerala].

VISION STATEMENT OF ADANI WILMAR

“GOLBALLY COMPETITIVE INDIA FOCUSED MNC, WITH LEADERSHIP IN

EDIBLE OIL BUSINESS PROVIDING BRANDED PRODUCTS AND SERVICES TO

THE DELIGHT OF CUSTOMER AND STAKEHOLDERS”

11

CHAPTER 4

RESEARCH OBJECTIVES & METHODOLOGY

Research Objectives

To find out relative strength of leading cooking oil brands in town.

Market Strength to be measured by Retail presence through retailer feedback

RESEARCH TYPE

Quantitative Descriptive Research Study

Research Methodology

Market strength to be checked by visiting all cooking oil keeping retail outlets in a

given area (complete retail census). Retailer response to be taken on structured

questionnaire.

Sample Size - 200 Retailers

12

CHAPTER 5

DATA ANALYSIS AND INTERPRETATION

The data collected from the primary sources (through collection of the responses to the

questionnaire was assembled, sorted, selected and analyzed) .The analysis of the data is as under.

Calculation of retail penetration of different brands:-

FORMULA USED

RETAIL PENETRATION = total number of stores where brand is found of a category

Total number of stores visited – stores where category is not found

Q. 1) Retail penetration for Fortune in different categories.

27.27%

5.12%10.76%

5.38%

67.44%

0

10

20

30

40

50

60

70

80

FORTUNE SOYABEAN

FORTUNE SUNFLOWER

FORTUNE PLUS

SUNFLOWER

FORTUNE GROUNDNUT

FORTUNE KGMO

FORTUNE RETAIL PENETRATION

FORTUNE

The percentages shown in the graph above show the retail penetration of

the various categories in which the brand is existing. Fortune KGMO has

the maximum retail penetration , in soyabean category the brand needs

push , same applies with other categories as well.

13

Penetration of the brand Fortune:-

Out of the total stores visited in the survey ( sample of 200) only 38.5 % stores kept

Fortune.

Q.2) Retail penetration for Goldrop in different categories.

Golddrop is the leading brand of edible oils when it comes to Hyderabad city. By looking

at the retail penetration of Golddrop it can be very well concluded. In the category of

Soyabean oil out of the sample of 200 Golddrop is found in 86.36% of the stores , in the

category of Sunflower oil Golddrop has 97.79% of retail penetration but in palm oil

category it has only 10.49% of retail penetration.

Tha brand is only found in these categories but has its strong presence in the categories in

which it is found.

Penetration of the brand Golddrop : -

Out of the total sample of 200 stores , 95.5% of the stores kept Golddrop brand. The

number show clear domination of the brand in the city.

86.36%97.79%

10.49%

0

20

40

60

80

100

120

GOLDROP SOYABEAN

GOLDROP SUNFLOWER

GOLDROP PALM OIL

GOLDROP

GOLDROP-RETAIL PENETRATION

14

Q.3) Retail penetration of Aadhar and Naturalle ( Sunflower).

Q. 4 Retail penetration of Natraj, Vijaya and Krishna ( Groundnut Oil).

In the category of groundnut oil Vijaya has the maximum retail penetration of 50.29%

followed by Natraj and Krishna with 46.1% and 44.31% respectively.

13.84%

48.2%

0

10

20

30

40

50

60

ADHAAR SUNFLOWER NATURALLE SUNFLOWER

SUNFLOWER OIL

RETAIL PENETRATION FOR ADHAAR & NATURALLE

50.29%

44.31%

46.1%

41

42

43

44

45

46

47

48

49

50

51

VIJAYA GROUNDNUT

KRISHNA GROUNDNUT

NATRAJ GPRUNDNUT

GROUNDNUT OIL

RETAIL PENETRATION OF GROUNDNUT OIL FOR VARIOUS BRANDS

Both brands Aadhar and Naturalle have the retail penetration of 13.84%

and 48.2% respectively. Naturalle has a comparatively strong presence than

Aadhar when it comes to the category of sunflower oil.

15

Q.5) Retail penetration of Ruchi gold , Raag and Alfa ( Palm Oil )

In the category of Palm oil Ruchi Gold had the maximum penetration in the stores . It

led by 98.14 % of retail penetration. The other two brands Raag Gold and Alfa were

faar behind in terms of retail penetration.

Q. 6) Retail penetration of Other brands and Fortune KGMO.

98.14%

0.62% 4.32%

0

20

40

60

80

100

120

RUCHI GOLD RAAG GOLD ALPHA

PALM OIL

PALM OIL - RETAIL

67.44%

45.34%

0

10

20

30

40

50

60

70

80

FORTUNE KGMO OTHER BRANDS

MUSTARD OIL PENETRATION OF FPRTUNE KGMO & OTHER BRAND

MUSTARD OIL-PENETRATION

Fortune KGMO leads with 67.44% followed by others brands in this

category 45.34%.

16

Q.7) Retail penetration of Olive oil brands.

Q.8) Retail penetration of Basmati Rice Brands.

94.44 %

5.55% 5.55% 5.55

0

10

20

30

40

50

60

70

80

90

100

FIGARO LEONARDO OTHER BRAND OTHER BRAND

RETAIL PENETRAION OF PALM OIL

PALM OIL

52.22%

32.22%

5.55%

24.44%

3.33%

0

10

20

30

40

50

60

RETAIL PENETRATION OF BASMATI RICE

BASMATI RICE

In the case of retail penetration of olive oil category Figaro 94.44% leads the

way with maximum retail penetration. The other brands are far behind with

Leonardo having 5.55% penetration and followed by other brands.

India Gate has the maximum retail penetration with 52.22% followed by Kohinoor

with32.22% and Dawat 24.44% respectively.

17

9.Q) Availability of Sunflower oil in Food store(Large, Medium, Small)

Out of total retailers covered, including large, medium and small stores Goldrop

sunflower has the maximum presence in the medium size shops, followed by

Naturalle followed by Adhaar and Fortune. Even in the large and small stores

Goldop Dominates.

10.Q) Availability of Sunflower oil in General store(Large, Medium, Small)

Out of the total retailers covered, including the large, medium and small stores

Goldrop Sunflower had the maximum presence in the medium size shops, followed by

Naturalle followed by Adhaar Sunflower. Even in the large and small stores Goldrop

Dominates.

4

11

5

21

25

4

16

2

0

5

10

15

20

25

30

LARGE MEDIUM SMALL

FOOD STORE

Fortune plus sunflower

Aaadhar sunflower

Gold Drop sunflower

Naturelle sunflower

FORTUNE sunflower

1332

1514

120

33

1

60

13

0

20

40

60

80

100

120

140

LARGE MEDIUM SMALL

GENERAL STORE

Fortune plus sunflower

Aaadhar sunflower

Gold Drop sunflower

Naturelle sunflower

FORTUNE sunflower

18

11.Q)Availability of Sunflower oil in Edible Oil Store (Large, Medium, Small)

Out of the total Edible oil stores covered, Goldrop has the maximum presence in

small edible oil store followed by Naturalle followed by Adhaar.

12.Q) Availability of Groundnut oil in Food Store(Large, Medium, Small)

Out of the total food stores visited Krishna has the maximum presence

followed by Vijaya and Natraj.

0

0.5

1

1.5

2

2.5

MEDIUM SMALL

EDIBLE OIL STORE

Fortune plus sunflower

Aaadhar sunflower

Gold Drop sunflower

Naturelle sunflower

FORTUNE sunflower

1

8

14

2

16

331

02468

1012141618

LARGE MEDIUM SMALL

FOOD STORE

Natraj groundnut

Vijaya groundnut

Krishna groundnut

Fortune groundnut

19

13.Q) Availability of Groundnut oil in General Store (Large, Medium, Small)

In the category of Groundnut oil Viaya oil showed its presence in most of the

stores followed by Krishna then Natraj.

14 Q) Availability of Groundnut Oil in Edible oil Store (Large, Medium, Small)

Out of the total Edible oil store visited Vijaya has the maximum presence in Small

and Medium stores followed by Krishna.

3

52

12

4

54

7

1

41

11

3 2

0

10

20

30

40

50

60

LARGE MEDIUM SMALL

GENERAL STORE

Natraj groundnut

Vijaya groundnut

Krishna groundnut

Fortune groundnut

11

2

1 1

0

0.5

1

1.5

2

2.5

MEDIUM SMALL

EDIBLE OIL STORE

Natraj groundnut

Vijaya groundnut

Krishna groundnut

Fortune groundnut

20

15.Q) Availability of Palm Oil in Food Store (Large, Medium, Small)

In the palm oil category Ruchi Gold was present in most of the stores followed by

Goldrop in Medium stores but the difference between the presence of the two

brands was huge.

16.Q) Availability of Palm Oil in General Store (Large, Medium, Small)

In the palm oil category Ruchi Gold was present in most of the stores followed by

Goldrop in Medium stores but the difference between the presences of the two

brands was huge.

1

21

42

11 1

0

5

10

15

20

25

LARGE MEDIUM SMALL

FOOD STORE

Ruchi gold palm oil

Gold Drop palm oil

Raag Gold palm oil

Alpha palm oil

4

98

28

1

12

24 10

20

40

60

80

100

120

LARGE MEDIUM SMALL

GENERAL STORE

Ruchi gold palm oil

Gold Drop palm oil

Raag Gold palm oil

Alpha palm oil

21

17.Q) Availability of Palm Oil in Edible Oil Store (Large, Medium, Small)

In few Edible oil stores visited in the category of palm oil, Ruchi Gold has the

maximum presence.

18.Q) Availability of Soyabean Oil in General Store (Large, Medium, Small)

In the category of Soyabean oil, most of the general store visited kept

Goldrop, followed by Fortune showed its little presence in the few Stores.

No other brand was found in this category other than the mentioned brand.

1

2

0

0.5

1

1.5

2

2.5

MEDIUM SMALL

EDIBLE OIL STORE

Ruchi gold palm oil

Gold Drop palm oil

Raag Gold palm oil

Alpha palm oil

4

1

11

4

0

2

4

6

8

10

12

LARGE MEDIUM SMALL

GENERAL STORE

FORTUNE SOYABEAN

FORTUNE PLUS SOYABEAN

GOLDROP SOYABEAN

22

19.Q) Availability of Soyabean Oil in Food Store (Large, Medium, Small)

Goldrop has the maximum presence in most of the food stores in this category of Soyabean oil

visited followed by Fortune.

20.Q) Availability of Olive Oil in General Store (Large, Medium, Small)

In the Olive Oil category Figaro was the most found brand among its

competitiors.Leonardo showed presence in few stores.

1 1

2

1

0

0.5

1

1.5

2

2.5

LARGE MEDIUM SMALL

FOOD STORE

FORTUNE SOYABEAN

FORTUNE PLUS SOYABEAN

GOLDROP SOYABEAN

2

11

11

0

2

4

6

8

10

12

LARGE MEDIUM SMALL

GENERAL STORE

Figaro olive oil

Leaonardo olive oil

Borges olive oil

Other Brand olive oil

23

21.Q) Availability of Mustard oil in Food Store (Large, Medium, Small)

22.Q) Availability of Mustard oil in General Store (Large, Medium, Small)

Fortune led the presence in this category with most of the stores keeping the brand. The

other brands were not so dominating in this category.

11

2

5

0

2

4

6

8

10

12

LARGE MEDIUM SMALL

FOOD STORE

Fortune KGMO

Other Brand

3

35

5

29

4

0

5

10

15

20

25

30

35

40

LARGE MEDIUM SMALL

GENERAL STORE

Fortune KGMO

Other Brand

Fortune led the presence in this category with most of the stores keeping the

brand. The other brands were not so dominating in this category

24

23.Q) Availability of Mustard oil in Edible Oil Store Store (Large, Medium, Small)

Fortune led the presence in this category with most of the stores keeping the brand. The other

brands were not so dominating in this category.

2

1

0

0.5

1

1.5

2

2.5

MEDIUM SMALL

EDIBLE OIL STORE

Fortune KGMO

Other Brand

25

CHAPTER 6

CONCLUSION

The data analysis and its interpretation leads to the following conclusions.

Most of the stores visited in the survey were general stores .

If the sample is observed then it would be seen that maximum stores were of

medium size ( 300- 600 sq. Ft) followed by small stores ( less than 300 sq. Ft )

followed by large stores ( more than 600 sq. ft ).

The retail penetration of Fortune brand was only 38.50% in Hyderabad city.

The retail penetration of Fortune was maximum in mustard oil category with

67.44 % of retail penetration.

In the other categories the brand was lagging far behind and needed a lot of

push when compared to the leader.

Golddrop , the leading edible oil brand in the city had an impressive retail

penetration in the categories in which it competes, 97.7% in the sunflower oil

category followed by 86.36% of retail penetration in soyabean oil category

followed by 10.49 % of retail penetration in palm oil category.

Golddrop had an overall retail penetration of 95.5 %

In sunflower oil category other brands like Naturalle and Aadhar had the retail

penetration of 48.2 % and 13.8 % respectively.

In the groundnut oil category Vijaya had the maximum retail penetration of

50.29 % followed by Natraj with 46.1% penetration followed by Krishna with

44.31% retail penetration.

In the palm oil category Ruchi Gold has the maximum retail penetration of

98.14% , the other brands are lagging far behind.

In the olive oil category Figaro has the maximum retail penetration of 94.44%

followed by Leonardo with 5.5% of retail penetration.

Basmati rice market is dominated by India gate Brand having maximum retail

penetration of 52.22% followed by Kohinoor with 32.2 %. followed by Dawat

with 24.44%.

26

CHAPTER 7

RECOMMENDATIONS

PRODUCT

There should be more research and development to outplay the Health factor

and taste of Goldrop edible oil.

PRICE

Pricing structure plays an important role in brand decisions. Thus the prices

should be competitive.

In Hyderabad the prices of the leader are less than Fortune ( the flagship

brand). The presence of other brands of the company is limited.

PLACE

The presence of fortune is limited when it comes to kirana stores.

Some store owners expressed that the company was active in promoting and

pushing the brand a couple of years back but now it does not do it.

Telangana issue in the region has also affected their business so they have

started keeping less number of brands. Company should push its brand to

encourage the shop owners.

The company has to target the small stores in order to have a good influence in

the future. Mostly purchases are made from the general stores ( kirana stores )

only.

The distribution network needs improvement if comparison is made with the

leader.

PROMOTION

The respondents were less aware of the brand due to less promotions made in

the stores.

Presence of the brand in the stores should be felt more.

27

CHAPTER 8

LIMITATIONS

The author of this report had to work under several constraints and limitations.

Some of the key limitations are:

The survey and research has been done only in Hyderabad, therefore the

results show the market position of Hyderabad only

The sample size of the Hyderabad region taken was small, therefore it can be

said that the chosen sample is not the representative of the whole

population .

Respondents may not have been true in answering various questions and

may have been biased to certain other questions.

The questionnaire mostly contained multiple choice questions, therefore

many respondents did not give a proper thought before the questions, and

some answered things which were not applicable. All this increased the bias.