Tata Salt has sprinkled its product and marketing strategy by rolling out close to a dozen variants.
Can milk and salt be the same? Can India’s biggest milk brand and the country’s largest salt brand have something interesting in common? Can milk be milked in countless ways, and can salt be taken in pinch, grain and dash? Well, the answer is yes.
But to understand salt, let’s start with milk. Amul has over a dozen variants: Cow milk, Gold, Gold Special, Diamond, Buffalo Milk, Deshi A2 Cow Milk, Slim n Trim, Chai Maza, Taaza, T-Special, Shakti, UHT Milk, Lactose-free Milk and Camel Milk. Though all are milk, most are more than milk. They are value adds, which cater to all kinds of pockets, tastes and consumers.
Cut to salt. Tata Salt has sprinkled its product and marketing strategy by rolling out close to a dozen variants. Have a look: Tata Salt, Crystal, I-Shakti, Shuddh, Immuno, Iron Health, Pink Salt, Lite, Superlite, Rock Salt and Black Salt. Well, salt and milk definitely have one thing in common: Multiple variants.
Salt, though, is much more than milk. And Tata Salt has peppered its blueprint that is highly differentiated. Take, for example, Shuddh. It caters to mid-price markets, exists in specific geographies like Andhra Pradesh, Telangana and Karnataka, and consumers in these regions prefer solar salt, which is made by evaporation process. Then there is Crystal Salt. It’s a category that’s used extensively in South India, and it's largely used to make pickles, curries, sambhar and batter.
If there are variants catering to different geographies, then there are versions made for different socioeconomic strata as well. Take, for instance, I-Shakti, which is a low-priced salt catering to the bottom of pyramid (BoP) segment. The power of this category (BoP) is evident from the fact that of the total powdered salt category valued at Rs7,500 crore, this segment contributes to nearly 50 percent of the sales!
There is something for another pocket of users: Health conscious, and the ones suffering with medical ailments. Lite and Superlite have 15 percent and 30 percent low sodium, respectively, compared to other variants. Then there is Iron Health, a double fortified salt that targets iron deficiency. With an estimated 67 percent children under the age of five and 47 percent of girls under 15 being anaemic, Iron Health caters to this segment of population. And if you thought, the right amount of iodine is what you need, then give it a thought. There is Immuno, a value-added salt with Zinc. Also read: A pinch of salt: Can Tata Salt be a Horlicks, Complan or Bournvita?
But is there a method in the assault of so many brands of salt? Deepika Bhan explains the logic. “Our portfolio of salts reaches over 20 crore homes in India,” claims the president (packaged foods) of Tata Consumer Products. As consumers evolve, she reckons, they demand more categories. Across the industry, there are cases of successful categories winning on the back of strong portfolios. “An evolving portfolio positions us as a comprehensive salt company, catering to a wide range of consumer needs,” she adds, underlining how the strategy of sub-segmentation works. In the low-priced segment, for instance, there are a spate of counterfeit brands and regional brands. “I-Shakti is positioned to offer a high-quality salt at a reasonable price,” she says. It also gives consumers the access to convert from low-grade salts to a quality offering, she adds.
Tata Salt, reckon marketing and branding experts, has done well to milk the various needs of the users. A commodity, points out Harish Bijoor, explaining the various stages in the growth of a commodity, is a basic item which has a lowest common denominator avatar. A commodity first becomes a product, then a brand, and then come various sub-brands catering to niches. Tata’s salt game, much like other commodities which have become brands such as milk, sugar and tea, mirrors the normal evolutionary path. Initially, the highest sale will come from the flagship, which is the core offering. “And later, value-added play will gain momentum,” adds Bijoor, who runs an eponymous brand consulting firm.
So, has Tata Salt also seen a similar trajectory? Bhan shares a data to beef up her case. “We have witnessed a growing demand for value-added salts,” she adds. From 1 percent of the salt portfolio in FY20, the value-added salts now make up 5 percent in FY23. “There’s clear evidence that our strategy of offering a range of salt variants has been successful,” she claims, adding that there has been an increase in value market share between FY22 and FY23. “It clearly demonstrates that our strategy is working,” she adds.
The strategy, interestingly, also works on another front: Tackling inflation. Here’s how it’s linked. The inflation, points out the latest equity research report of ICICI Securities, forced Tata Consumer Products to raise prices of salt aggressively—close to 33 percent in just 12 months—resulting in volume decline. A steep increase in input prices—coal, brine, packaging material, transportation cost—led to contraction in the margins of Tata Salt and Tata Consumer over the last few quarters. “It forced TCPL to hike prices from Rs21/kg in the first quarter of FY22 to Rs28/kg in the second quarter of FY23. “But as the product portfolio matures, it will provide a cushion against any inflationary pressure,” the report maintains, adding that a wide range of brands will provide ammunition to grow the market shares via focusing on the right SKUs depending on macros prevalent at any point of time. To structurally reduce the commodity linkage, the report underlines, Tata Consumer is working on sub-segmentation and has rolled out multiple premium as well as value-for-money salt variants. “As the new launches mature, they will provide more stability to market shares as well as margins,” it noted.
The challenge, though, for the brand would be to ensure that multiple variants don’t cannibalise each other. Take, for instance, Lite and Superlite. “If the idea is to have a variant with low sodium content, then why have multiple avatars?” asks Ashita Aggarwal, professor of marketing at SP Jain Institute of Management and Research. “If 30 percent is better than 15 percent, then why have one with 15 percent,” she asks. Then there is an issue revolving around names. Immuno Plus is salt with zinc, and Salt Plus is salt with iron. “Now both have ‘plus’ in their names. How would a user remember which plus stands for which mineral?” she says.
Meanwhile, Bhan is confident that the strategy has been firing on all cylinders. Looks like there is a pinch of salt for everybody!