Can Hindustan Unilever’s Kissan get Indians to embrace peanut butter like it did with jam?

FMCG giant Hindustan Unilever (HUL) has just added peanut butter to its Kissan line of foods and refreshment (F&R) products. The new product has been initially launched in South Indian markets. It falls in the sweet spreads category, which includes jams, marmalades, honey, nut-based spreads, etc.

The segment is reportedly valued at around Rs 250 crore and has gained acceptance in North Indian markets (like Delhi and Punjab). Peanut butter dominates the nut-based spreads market, growing at more than 35 per cent CAGR consistently over the last five years. There are a host of smaller/regional brands in the segment, but popular players include food brands like Sundrop, Dr. Oetker, etc.

While taste is a factor that influences purchase, the major marketing message has been around health and the high protein content of the product. Fitness-oriented brands, like MuscleBlaze, also offer peanut butter.

Kissan’s peanut butter is priced at Rs 175 for 350 gram. In comparison, Dr. Oeter’s sells 340 gram for Rs 169 and Sundrop sells 200 gram for Rs 100.

India got its first peanut butter decades ago, in 1962, with the brand Prutina. After being inert for many years, the segment only saw some traction in the last couple of decades, with entries like Sundrop, Funfoods, etc. It is yet to see the same acceptance as other rival formats, like jam, honey and butter. Also, major food companies like Britannia, Parle, ITC, Amul and Nestle are yet to dip their fingers into it.

However, considering the large number of players already present in the segment, we asked the HUL team the reason behind the late entry. A company spokesperson says that the peanut butter market in India today caters mostly to the segment of fitness enthusiasts, who consume it as part of a nutritious diet. These are the early adopters of the category, who have, in many cases, started taking to it as recommended by nutritionists/dieticians.

Now, the task on HUL’s desk is to develop a market beyond the nutrition enthusiasts. “Given the high nutritive value of the product, we believe there is a larger market to be developed by targeting mothers, who are looking for nutritious and convenient food solutions for their children.”

The brand aims to leverage its rapport with Indian mothers (built over 86-plus years) to drive affinity with the TG (Indian mothers). “The time is ripe for us to enter this new category and democratise the habit of consumption of peanut butter.”

Why did HUL choose South Indian markets for the initial launch, instead of the rapidly growing North Indian markets? The spokesperson says that as per IMRB data (on geographical dispersion of category adoption), South India offers the best opportunity for chosen target segment of mothers looking for nutritious and convenient food solutions for their children.

“Also, the taste of peanut is quite popular in all the states in South India, across a variety of dishes – savoury and sweet – which makes it easier for the people here to take to the product easily. We foresee that peanut butter can easily become a regular breakfast/snack accompaniment to bread/roti/dosa, or even as a nutritious shake mixed with milk.”

The peanut butter-dosa combo doesn’t come as a surprise because Kissan is a brand that taught Indians to consume roti with tomato ketchup.

Also, apart from just being a food, peanut butter is a culture thing in the West, like bread and jam has turned out to be in India. HUL will need to make a fair amount of investment, in terms of advertising and marketing, to drive adoption at that scale.

“A host of activities are planned on various media (platforms) other than TV, including activations and reach-out programmes to educate consumers on the right nutrition with the product in an entertaining manner.”

The target for now is to build salience with mothers and, in turn, kids. The brand’s first TVC, which is an animated and cartoonised film, also reflects this.

The spokesperson reveals that the product seems to have been adopted by metros first, followed by Tier-I towns. A significant trend is the interest in protein and healthy food, and food that can help in immune functions of the body.

“As peanut butter meets all these requirements, we feel that the time is right to explode the market in India. Specifically, given that it has more quantity of protein than that in egg, dal, milk, poultry, fish, curd and paneer per 100 gram of product, and at a very moderate price per gram of protein, this can be taken beyond large towns and grown.”

Kissan, as a brand, is the market leader in jams in India and has played a key role in making jam an indispensable part of Indian breakfasts and school tiffin boxes. We asked if peanut butter has a separate market than jam - if it will share the kitchen cabinet with jam or, if it was more of an either-or situation. The spokesperson responds, “It depends completely on the consumers’ preferences. We foresee that those who believe in supplementing their diet with the right balance of protein and micronutrients, will choose the product.”