Catching on the increasing demand for Mediterranean cuisine and healthy cooking oil in India, world's leading olive oil producer Borges is expecting to clock Rs 100 crore in revenues by the end of this fiscal.
To achieve its target, the Spanish brand is all set to launch a new product line early next year that will be supported by an aggressive advertising spree, including a television campaign. The brand has set aside 16% of its total revenues for marketing.
"The way our business is panning out, we may cross the Rs 100-crore mark soon,â€ť said Rajneesh Bhasin, Managing Director, Borges India.
The company has set an ambitious plan of growth. Rajneesh Bhasin, Managing Director, Borges India, said, â€śWe did a business of 10 million Euro (Rs 75 crore) last year and aim to triple the business to Rs 225 crore in the next three to four years.â€ť
"We have a couple of innovations coming up. As soon as we are ready with the new product range, we will come back with a large 360-degree advertising campaign," he said.
Borges also has presence across pasta, table olive, canola oil, vinegar almonds and walnuts brands in India. The categories are expected to contribute strongly to the growth of the company as the awareness and popularity about the Mediterranean foods increase in India.
The olive oil segment in India is expected to be around Rs 350-400 crore in size. The category saw its highest point in 2012-13 with 65 per cent growth, which went down to -9 per cent in 2013-14. The figures again went up to 22 per cent in 2014-15 and was in its worst phase in 2015-16 with a de-growth of -12 per cent as the price of olive oil went up by 30 per centÂ because of the low olive crop output in the Mediterranean countries, the rupee depreciating and high import duties.
Indiaâ€™s olive oil consumption in the financial year 2016-2017 stood at 12,739.49 tons which is about 15 per cent higher than the last year.
The olive oil consumption in India is likely to be around 35,000 tons in next four years, which would take the overall size of industry to Rs 1,000 crore.
The olive oil category is divided into two segments: Core olive oil and pomace olive oil. In the core olive oil category, Borges claimed to command around 30 per cent market share. According to the import data, Borges stands at the second position.
However, the company claims that it is the top player in India. â€śAccording to our internal data if you talk about core olive oil, we are the number one. The number two has far less market share than us. We have a complete 10 per cent lead over the second best. We donâ€™t function in the pomace olive oil category because it is not considered healthy for consumption," Bhasin claimed.
Almost 60-65 per cent of sales for the brand come from modern trade channels and the rest from the premium retail shops.
Borges, the 100% subsidiary of Borges International Group, is expecting to get strong numbers through e-commerce segment as well. E-retailing contributes around 15-20 per cent of the companyâ€™s turnover. â€śE-commerce is going to become an important channel to focus in times to come. We have a nationwide reach through E-Commerce,â€ť said Bhasin.
FMCG giants such as Marico and Cargill have their own olive oil products and pose strong competition to Borges. When asked about the competition, Bhasin said the brandâ€™s real competition is yet to come.
â€śGlobally we have competition. Unfortunately, none of them are in India today. Borges is lucky in India as we are eight years ahead of them already. The brands selling in India donâ€™t have names outside India.
Bhasin said that the only marketing challenge that the category faces is the level of awareness among consumers about the olive oil category. The brand, ever since its launch in India in 2010, has been educating potential consumers about the benefits of using olive oil for cooking.
Before 2010, olive oil was mostly used as massage oil in India, Bhasin said. He added, "Some of the myths about using olive oil for cooking are that olive oil has a low smoking point and overheating can turn it carcinogenic. Also that olive oil had a fruity taste.â€ť
To break the myth and make the oil more acceptable to Indian kitchens, Borges launched the extra-light variant of olive oil, which was a runaway success for the brand. â€śItâ€™s not extra-virgin but more refined. Since it is refined, the smoking point is much higher than you normally need in Indian cooking,â€ť said Bhasin.
After the success of the extra-light olive oil in India, a lot of other brands launched their versions. Borges claims despite competition it commands around 65 per cent market share in the sub-category.
The 121-year-old Spanish brand is currently focusing on the cities with population more than one million plus as the company believes that their target audience resides in these cities only. Therefore, the focus is only on top 58 cities in India. Globally, Borges sells in over 100 countries.
About its advertising campaign, Bhasin said that after a gap of five years, the olive oil brand was planning to return to television advertising next year with an intention to give the brand a push.
â€śWe are again looking at coming up with a television campaign and returning big time to above-the-line advertising next year," he said.
Dentsuâ€™s Carat is the brandâ€™s media agency on board.
Borges earlier had the Bollywood actress Chitrangada Singh as the face of the brand a few years ago and also did a few above-the-line advertising, including television commercials as well. The brand reduced its pace in the ATL space and picked up in the below-the-line advertising in the last two to three years.
Borges India Family TVC:
Bhasin explained Borges advertising move, â€śEarlier Borges was a small company. Anytime we used to run a large marketing campaign, our P/L used to bleed.â€ť
But despite being off from the television for a while, Borges has been very aggressive on the digital front. A significant part of the company comes from digital on the back of digital marketing. â€śDigital is an important medium for us and we continue to invest in it,â€ť he added.