How Marico’s Saffola won the battle for Oats market in India

There was an interesting discussion on LinkedIn today. How consumer insights helped Marico take on Kellogg’s & PepsiCo to build India’s No.1 Oats brand. Srinivas Seshadri, category head for V-Gaurd put up a post explaining this. 

Great brands have one common trait – Consumer obsession. While the majority of the brands contemplate being better than competitors, great brands try to understand what matters in their consumers’ lives and what can the brand do to fulfil it, the post read. 

Seshadri briefly spoke about how Marico became what it is today. A division within erstwhile Bombay Oil focusing on selling smaller, branded edible oil packages directly to consumers instead of traditional bulk selling to other businesses, eventually spun off into Marico.

For those who don’t know, Marico’s whole business approach is based on understanding consumer consciousness. At Marico, this is known as ‘Mariconscious’. 

Saffola was one such brand built on the foundation of product innovation driven by understanding consumer needs.  Marico extended the Saffola brand from heart friendly cooking oils to Oats in 2010. It was the 21st entrant in the competitive Oats market in India. Saffola was up against Kellogg’s at one end and PepsiCo’s 145-year-old brand Quaker Oats at the other end. The road ahead - Product innovation driven by consumer insights, the post stated. 

There was one simple insight that Marico gained from their consumers. Indians like their breakfasts to be savoury and not sweet. The oats offered by competitors at the time were either sweet or plain. No one was doing savoury oats. There was a large untapped consumer segment there. Saffola Oats introduced the world's first 'Savoury Oats.’

And this new offering, skyrocketed Saffola to the top of the table. They had dethroned Quaker Oats. 

Seshadri also mentioned that before tasting success with Saffola Oats, the brand learnt about consumers the hard way. Sensing rising consciousness about healthy eating and leveraging Saffola’s positioning around ‘health’, Marico had earlier launched baked snacks under Saffola made from extruded high-fiber grains. It bombed. Reason - consumers expected indulgence foods to first and foremost be tasty and then healthy!!

Replying to the post, Deepika Warrier, head of marketing at Bajaj Auto shared an interesting take. Warrier in one of her previous roles was vice president of the nutrition category for PepsiCo India. 

She stated that Quaker actually launched savoury ( and sweet ) flavoured oats almost 2 years before Saffola did. What actually did them in wasn’t the tough competition from Saffola but a number of other reasons. 

Firstly, stringent self regulations on sodium control meant that the masala flavour was low in salt and consumers would need to add salt as per their taste , which the brand couldn’t suggest as well. 

Secondly, Pepsico Foods was relatively unfamiliar with the Co-pack bought out ingredients model and insisted on making (masala) or sourcing (expensive veggie flecks from Italy) ingredients themselves and this prevented them from getting past internal gross margin hurdles (as compared to the core) and cause stock outs on ingredients. 

Thirdly, the Quaker brand focused on heart health at its core and since it was sub-scale in the large PepsiCo portfolio, it couldn’t invest the additional A&P to build out flavours. 

Lastly, it’s a pity that PepsiCo didn’t stay the course on building out the more nascent innovation pipelines. So essentially, it wasn’t being the first mover but Saffola’s tenacity and agility and great proposition building that made it win in the flavoured oats market.