An Irate Distributor:

The Question of
Profitability

By Group 7
 INTRODUCTION
Nutripack India
• Subsidiary of NutriPack ltd, a global
US based food company
• Established in 1994
• Headquartered in Gurgaon
• By 2010, Brand’s turnover had
reached 7.5 Billion
• Product Portfolio: NutriPower,
NutriJams, Glucolin and
HoneyBeez
Indian Retail & FMCG Sector
• Retailing in India is one of the pillars of its economy
• It accounts for about 10 percent of India’s GDP
• India is one of the fastest growing retail markets in
the world, with 1.2 billion people.
• FMCG is the Fourth Largest sector in the India
Economy
• Total Market size of USD 13.1 Billion in 2012
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Retail Trade Background
& Situational Analysis
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 INDIAN RETAIL TRADE - BACKGROUND

• US$470 Billion in 2011, CAGR of 7.5% - one of the fastest in the

Indian Retail Market world

• In terms of geography, culture as well as channels to reach

Diversity customer

• Rising disposable income & increasing consumption

Tier II & Tier III Cities
• Grocers, paan shops, famly managed shops, hawkers,
Retail Formats supermarkets and teleshopping

• Focus on expansion in rural sector where most of population

Rural Sector resided

• Existence of MNCs with established distribution networks

MNCs
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SITUATIONAL ANALYSIS of AMIT’s TERRITORY

Nutripack
Ltd

Carrying & Forwarding Super

Agency
Distributor

Distributor Sub
Distributor

Wholesaler

Retailer (Urban &

Rural) 5
 SITUATIONAL ANALYSIS of AMIT’s TERRITORY

▰ Intermediaries in FMCG Distribution in India

▰ Existence of competitors- Healthy, Bonny in Health Food Drink
and Mazaa, Keswani in Jams
▰ Territory taken over from Rahul Ray, recorded CAGR of 32% in
Central Maharashtra

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2
Basis for Selecting
Jalgaon district for
Expansion
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JALGAON FOR EXPANSION

India’s Tier 2 & 3 cities were developing and about to compete with metropolitans

Kumar focussed on district specific reports showing untapped potential in the region

Jalgaon being a major agricultural centre and a feeder market for surrounding villages

Existing partnership with Sachin Agency, who were the largest distributor in central
Maharashtra

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3
Perspectives of Kumar &
Mandore

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 KUMAR’s PERSPECTIVE

Low Retail
• 750 outlets – competitors : 1800
Coverage
• Interior retails complained about credit period,
No Credit Period
schemes & discounts not uniform
Mandore • Not tapping potential market
Decrease in
• Of NutriJams & NutriPower in last 4 years
Market Share
• Needed more efforts from intermediaries especially in
More Efforts
Jalgaon region

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 MANDORE’s PERSPECTIVE

Low • Working on a margin of just 4.5%, he is able to make

Profitability a profit of just 2.6% after deducting his expenses

Investment • If he invests more, it would increase his yearly

Dilemma expenses by about half a million

• Rather than increasing the investment with NutriPack

Low Returns he can invest in the bank and get a 10.5% return
yearly without the hard work

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4
Arguments for Mandore
to Invest

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 MARKET SCOPE OF NUTRI POWER

▰ Availability of Nutri Power has decreased from 50.87% (i.e. available in only 680
outlets out of total 1337 outlets) in 2009 to 45.90% (i.e. available in only 729 outlets
out of total 1588 outlets) in 2011
▰ Nutripower covers 45.9% of total outlets whereas Healthy is covering 89.3% of the
outlets
▰ Increase in infrastructure and investment will lead to tapping of almost 50% untapped
market in the Nutri Power product line

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 MARKET SCOPE OF NUTRI JAM

▰ Availability of Nutri Jam has decreased from 34.51% (i.e. available in only 369 outlets
out of total 1069 outlets) in 2009 to 26.92% (i.e. available in only 342 outlets out of
total 1270 outlets) in 2011.
▰ Jams Nutrijam is covers 26.9% of total outlets whereas Mazaa covers 73.8% of the
outlets
▰ Due to small infrastructure and inefficiency in production to cater large number of
outlets to keep their product, the company is losing its market share to others

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 BENEFITS FOR MANDORE

▰ Increase Sachin Agency’s investment in NutriPack India as its potential is very high
▰ With a small investment, the considerable benefits are much higher
▰ The reach of the products should be reached to make it comparable to the
competitors
▰ With an increase in reach and improvement in infrastructure, NutriPack has the
potential to become the MARKET LEADER in many sectors in which it is just a
challenger

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5
Recommendation to
Sachin Agency

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 RECOMMENDATION

Uniform schemes and cash discounts across all outlets of similar value.

Increase personal visits to retailers.

Invest and expand the business

Discretion of offering discounts should be with Mandore, not with salesman

Credit period should increased

Because of low margin product, sales should be increased by giving more offers to customers

Clear all the dues with Mandore to gain his trust

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THANKS!

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