Tetra Pak packs a punch with new strategy

N. Shatrujeet

agencyfaqs!

PUNE, Sep 15

At 10-billion litres a year, the Indian milk industry is big - actually, the largest in the world. And Tetra Pak India Ltd (TPI) wants to corner all the action in this industry in its thirst for volumes.

Correction. TPI - a 100-per cent subsidiary of Tetra Pak International, which is a part of the US $12-billion Tetra Laval Group of Sweden - wants to corner all the action in the fruit juices, fruit drinks, edible oils, tomato-based products and other ready-to-heat/eat segments as well. And the company has drawn up an aggressive multi-pronged strategy to help it achieve this goal.

Communication is one key element. It is vital if the targeted sales turnover of Rs 160 crore for the year 2000 has to materialize - which, if it does, would be a 100 per cent growth over the turnover of Rs 80 crore in 1998. And in the long run, communication would determine the outcome of TPI's aim of converting the market situation from ‘gentle push' to one of ‘pull'.

To meet these objectives, TPI is putting in place a two-tiered communication approach - a move that it terms ‘relationship marketing'. On one hand it is reaching out to its direct customers and the retail-level trade, communicating the cost, distribution and retailing advantages of tetra packaging. On the other, end users are being addressed with the promise of safety, convenience and hygiene.

The latter is more perceptible, and is part of TPI's efforts to acquire a ‘face' that the consumer can identify. Not that the company has spelt this out in as many words. A pretty obvious move, nonetheless. Since its entry into India in 1986, TPI has essentially been a backroom player. It was more than content selling its expertise to marketers. The consumer, of course, associated the tetra pack with either Frooti or Jumpin' or whatever. TPI was even beyond peripheral vision.

However, in 1999, for perhaps the first time, TPI took a step towards addressing the consumer directly. It kicked off a generic campaign in the print media to jointly launch products in the ultra-heat-treated (UHT) milk segment. The campaign highlighted the inherent goodness of milk, even as it emphasized the safety and hygiene aspects of UHT milk in Tetra Pak packages.

Then there was the ‘Tetra Pak Dial-a-Drink' promotional campaign that TPI organized in tandem with major liquid food brands. Under the promo, consumers were encouraged to place orders of their favourite tetra packed drinks with TPI and win prizes on a daily basis. It goes to TPI's credit that it got competing brands to participate in the promo.

In its effort to increase target consumer contact, TPI has been very aggressive in its participation in exhibitions and consumer shows. Notable examples are ‘Megamart-99' in Margao, Goa, and ‘Ripples' in Hyderabad, where TPI aimed at "educating, entertaining and persuading consumers to buy tetra packed liquid foods". TPI also sponsored the ‘Healthy Times Happy Times Inter-School Carnival'- targeted at school children and parents - that covered six cities, with participation from over 25 schools per city. According to the company, the emphasis has been on consumer interaction - which spurs sampling.

All this raises a pertinent question - what objective does TPI's heightened consumer focus fulfill? Generating awareness about the safety and hygiene-value of tetra packed liquid foods, what else. And in the process, increasing consumption. While TPI sees these efforts and joint promos as brand building initiatives and "significant contributions towards building its customers' brands", the bare truth is that companies who have been marketing tetra packed foods have failed to communicate the benefits of tetra packaging to the consumer.

TPI has been working equally hard at the backend. The company is launching an awareness campaign about quality standards of tetra packed milk, targeted at milk cooperatives. Again it has helped Shivamrut Dudh Utpadak Sangh, Karnataka Milk Federation (KMF) and Andhra Pradesh Dairy Co-operative Federation Ltd (APDCFL) launch products by appointing marketing consultants, dealers and distributors, and providing market research and retail audits.

When Rajasthan Cooperative Dairy Federation hosted a National Milk Seminar aimed at upgrading the knowledge base of technical managers of dairies, TPI provided it with a panel of speakers. For TPI, value-added service to its customers seems to be the mantra. As more tetra packed brands enter the market, the company is looking at innovative joint promotions for each brand.

Further, it also claims to provide customers with an advisory service on packaging, package design and material handling. TPI has a retail audit system covering 800 shops in seven grade-A cities that tracks product sales, market share and stock-outs. It has a Technology Centre at Pune to develop new products and test formulations. These services are put at the customer's disposal free of cost.

"Our customers' success is our success, and this truly drives and decides our business," says Stefan Johansson, vice-president, sales & marketing, TPI. "When it comes to support of expertise, we believe in tailor-made solutions for customer. We have a strong base of knowledge here at Tetra Pak India, but we also use our global organization when needed. If the situation and the customer demand it, we'll readily bring in external expertise."

That India is a priority market for the world's largest liquid foods processing and packaging company is an understatement. Tetra Pak International has already invested over Rs 165 crore in India - and that is just towards setting up the Takwe factory, the acquisition of Hindustan Packaging Company Ltd (HPCL) and the acquisition of the Processing Systems Division. Further, TPI is laying great emphasis on key start-ups of Tetra Fino installations. Tetra Fino is a new, low-cost packaging technology specially developed for emerging markets such as India.

Identifying areas of potential growth is one thrust area. "We have applied a ‘outside-in' approach to identify potential growth areas for both existing and new market categories," says Johansson. "Till now, we have analyzed the white milk category in India and parts of the ready-to-heat/eat category. We'll soon start the same process for beverages and other categories like tomato-based products."

TPI has identified three areas of potential growth. One is in Tetra Fino Aseptic packaging system. "The pouch, as a packaging format, is known and accepted by the Indian consumer. Tetra Fino Aseptic adds the value of being 100 per cent bacteria-free and tamper-proof," says Johansson. The other growth areas are branded milk in Tetra Brik Aseptic systems and ready-to-heat/eat dal - also packed in Tetra Brik Aseptic system. "This is a challenging project that forces us to draw on all our local and global expertise, both within the processing and packaging divisions," concedes Johansson.

Naturally, communication is high on Johansson's list. "The benefits of Tetra Pak processing and packaging technologies are many and different, depending on who you are in the food value chain," he says. "The clear benefits to the consumers are safety, convenience and consistent high quality. The benefits to the retailers and the distributors are stackability, shelf appearance and space savings. The benefits to our customers can differ depending on what type of market they are in. But safety, consistency, cost, distribution reach, differentiation possibilities, turnkey responsibility etc are what broadly appeals to them. This is part of our saying that Tetra Pak is ‘more than the package'."

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