Sunpure sets sights on omnichannel food biz

South India’s most popular edible oil brand Sunpure is facing a tough competition from large food giants from other geographical regions like Adani Wilmar and Patanjali Foods. The edible oil company has taken the challenge in its stride. It is warding off these threats by bold outflanking manoeuvre that not just aims to protect its existing turf of South, but also slowly expand in West and East and eventually penetrate into the unorganised North, where mustard oil rules the roost. Sameer Ranjan Bakshi had a tete-a-tete with the General Manager - Sales & Operations of M K Agrotech Pvt Ltd, Gokaran Singh Pawar, to know more about the company’s line of action that involves not just positioning the brand on trust and purity factors, but also launching new segment of food products and aiming to leverage the consumer tech platform to appeal to new generations.  

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How have you built your moat in South India, especially in a low margin business like edible oil at a time when bigger companies (Adani Wilmar and Patanjali) are trying to grab a bigger market share by translating their efficient supply chain management into their bottom line? The best way to stave off competition is focusing on gaining trust through the purity of our product. Though they (our competitors) have port-level facilities, we have our port terminal at Mangaluru and we have a very strong fleet of tankers to get our crude oil from port to our refineries that are located at Nelmangala, Srirangapatna and Challakere. We have about 60 tankers for bringing crude oil to refineries and about 150 tankers for delivering oil from refineries. We also have a large number of depots across the southern states of India and even in Maharashtra that keeps lubricating our supply chain system.  As edible oil is a low margin business, how do you handle the challenges from organised and big retail and wholesale players who always bargain hard for deep discounts and squeeze margins? We try to maintain a levelplaying field across platforms and retail players, and our quality of our products help us in doing that. I don’t want to boast, but because we have a strong brand recall value, retail players need us more than we need them. This helps us in maintaining the levelplaying field as far prices are concerned across platforms. We have also relaunched our online store four weeks ago. We also sell our products on Amazon, Flipkart, Big Basket and other offline stores. But it is normal to see some price differentials amongst e-commerce players as they try to offer discounts and attract customers. But again, the price differentials would range just Rs 1-2.  Please tell us about your growth story and market share? Pandemic was a blessing in disguise for food companies. So, we saw huge growth in the last few years. People stayed at home, but homemakers were the ones who were busy cooking food to cater to their family members’ increased munching desires. Work from home and study from home hugely contributed to our growth. In Karnataka, we have a handsome 40% market share, whereas in South India, we would be having a market share of about 18-20%. We don’t have a presence in North India that largely consumes mustard oil. Besides South, we have business presence in Maharashtra and Odisha. We have plans to expand our groundnut oil business into Gujarat because groundnut oil is consumed a lot in that state. As far as North and West Bengal is concerned, we have plans for either inorganic or organic growth. Mustard is grown, crushed, and used in most of the households in the Gangetic plains. It is not an organised business in North India  Please tell us about the challenges faced due to Ukraine war and the lessons learnt? The food industry was caught unawares by the Ukraine war. There was a huge impact on the shipments of sunflower oil to India. Serious shortage of oil compelled us to diversify and look into local produce. It gave us food for thought: Why are we so dependent on imports for our cooking? Ninety per cent of our palm and sunflower oil are being imported. We decided to go back to our roots 25 years ago, before sunflower became our preferred cooking oil. Then, everything was made of groundnut oil. Thus, we started looking at groundnut as an alternative for imported edible oil. So, we started a new line in groundnut refining which is a very good alternative for sunflower and soyabean oil. And we saw that people are ready to replace Sunflower oil with refined groundnut oil when there is a crisis.  You have intended to become a full stack food company. Please tell us about your investment and expansion plans? How is the offtake seen in new lines of businesses like sugar and wheat flour? We have decided that eventually we want to become a large food company, connecting consumers to wellness. We have set a target of more than Rs 200 crore to be invested in a three years ti