Placeholder for Team Logo

here

Agri Business Entry Strategy Edible

Oil Industry
Television
Partner

Knowledge
Partner

Agenda

Industry
Analysis

Product
Strategy

Roadmap

Sourcing
Strategy

Financials

Supply
Chain
Strategy

Marketing
& Branding
Strategy

Rising oil consumption and a staggering growth in

branded segment present a huge potential.

I
N
D
U
S
T
R
Y
A
N
A
L
Y
S
I
S

INDUSTRY SIZE (MN TONNES)

& GROWTH
CAGR-Imports - 10%
CAGR - Domestic
Production - 1%

20
15
10

INDUSTRY MAPPING
Brand

Market
Share
10.9%
10.2%

5
0
05

06 07 08 09 10 11 12 13
Import
Domestic
Total

KEY INDUSTRY TRENDS

Oil consumption to grow with
increasing population
Branded segment growing at
15-20%
High yield oil seeds to reduce
dependency on imports

4.8%
3.3%
3.2%
2.9%

Synergies with existing businesses and multiple

other reasons favour Mahindras entry into edible oil

Why Edible Oil?

Why will Mahindra Succeed?

Channel reuse, seed supply and
information dissemination

Increase touch points

with urban retail
customers

Enable farmers to
achieve True Farm Tech
Prosperity

S
Y
N
E
R
G
Y

Internal warehousing & logistics

solutions and 3PL opportunities
Financing needs of tillage
equipment to achieve better yield
Unified Agri-Business and
combined brand promotion
Exclusive Retail store for brand
promotion
Partner with existing tractor
customers
TEAM NAME ,
CAMPUS NAME

Rising awareness of natural anti-oxidants, emerging trend of

alternate usage of different oils and packaging inconvenience
faced, present an opportunity for a new player.
Methodology: In-depth interviews
Profile: 20 Traditional Retail stores owners (Indore); 50 customers spread across Odisha,
Bihar, West Bengal, Maharashtra, MP, NCR, Karnataka

Packaging Inconvenience
Willingness to try packets
with in-built dispensers

Rising focus on
natural anti-oxidants
and minerals
Trend of using
different types of oil
alternatively

FGD
Take

Customer
Speak

Shopkeeper
Speak

Low margins due to

intense competition

In B2B, price is the major concern since oils have

very less differentiation

Methodology: In-depth interviews with hotel owners, namkeen makers, traders & farmers
Profile: 4 Hotels( Indore ) and 2 Namkeen Makers ( Indore ), 2 traders, 10 farmers

Traders bring new brands for testing

Price and taste are important
parameters

Traders do a sanity
check on free
samples given by
companies

Hotel Owners/Namkeen
makers Take

Traders
Speak

Farmers
Speak

Look for Stable

sustainable income
Additional benefits
in case of excess
production

Current brands focus on health, taste & heart

Positioning Of Competitive Product Set

Taste & Health
Healthy Oil for healthy people

Healthy Heart
Suno Dil ki Awaaz, Dil ka Haal
Value for Money
Thoda Aur Chalega, Oil that
isnt oily
Focussing on kids health
Fit hai to Future Hai

Symbol of health

Introducing

Delays
Ageing

Prevents
Cancer

Sabor
oils
o
Every

filled

with Nutrition,
Purity and Trust.

Improves
Memory

Oil
By Mahindra Agri

Stay young & healthy with the

goodness of natural anti-oxidants

Ab aap rahen tann aur mann se young

Oil
By Mahindra
Agri

BRAND MANTRA

Nourishing edible oil that keeps you young &

healthy naturally

BRAND CHARACTER

Modern, Lively, Convenient

BRAND BENEFITS

Delays ageing, prevents cancer, improves

memory

POINT-OFDIFFERENTIATION

Rich in natural anti-oxidants, Easy to pour,

Rich colour, Double Filtered

REASON TO BELIEVE

No addition of synthetic anti-oxidants,

Packaging Innovation

Positioning Statement
For SEC A & B women in the age group of 25 to 40 years, Saboro is a nourishing edible
oil that keeps one young & healthy naturally due to presence of natural anti oxidants and
comes with a nozzle cap on the packet.

Mahindra should invest in established & growing

edible oil types
SELECTION PARAMETERS
Fat Content:
LOW
PR
OD
UC
T
ST
RA
TE
GY

Smoking
Point: HIGH
Current
Market Size:
HIGH
Synergy:
SIGNIFICANT

ADDRESSING CHANGING TRENDS

Packaging Innovation

ACCEPTED OILS
Mustard
Soya Bean
Rice Bran
Sunflower

Or
d
y i na
Oi r
l

REJECTED OILS
Olive
Ground Nut
Palm

Combo Packs
1 litre

Sourcing & Supply Chain Strategy

Sourcing
Oil

State

Mustard
Oil

Rajasthan,
U.P. &
Haryana

Current
Production

Mustard
Soyabean
Sunflower

5.42 mmt

Rice
Bran Oil

Chattisgarh,
U.P.

Soya
Bean Oil

M.P.,
Maharashtra,
Rajasthan &
U.P

11.7 mmt

Karnataka,
A.P.,
Maharashtra

0.4 mmt

Sun
Flower
Oil

Supply Chain
5
1
Oil Depot
Supply High Quality
Samriddhi Seeds +
1 depot in Haryana,
Farm Support
Punjab, Uttarakhand,

0.3 mmt
(Oil)

2
Extraction & Storage
of Seeds

1 Godown for 8-10

villages
Oil Extraction
Facility

Mustard 1 in UP
Soybean 2 in MP
Sunflower-1 in AP

Chhattisgarh,
Jharkhand
2 depots in MP, Gujarat,
Rajasthan, UP, West
Bengal, Odisha, AP

Refining

Port Locations
Mustard Kolkata
Soyabean Surat
Sunflower- Vizag
RiceBran Mumbai

Sales & Distribution Strategy: Focus only on B2C

CHANNEL
PREFERENCE
B2C
Company

2 ltr

Distributor

Retailer

5 & 10

&1

Litres

Litre
Plastic pouch

High retailer margin 3-4%

Distributor Margin 2-3%

Plastic Containers

Dispenser
Pack

Attractive trade promotions

Retailer store tie up.

TEST
&
LAU
NCH
MAR
KETS

Phase wise launch: Prevents too much capital

investment & provides a gradual learning curve for
distribution channel

Test Market
Aim: To gain consumer feedback
Mustard
SoyaBean
Sunflower
RiceBran

Bhubaneshwar, Kolkata
Indore, Ahmedabad
Hyderabad, Delhi
Pune, NCR

Launching Of Oil
Phase 1:
Rice Bran - NCR, Other Urban areas
SoyaBean - Western & Central India
Phase 2:
Sunflower- A.P., Karnataka, Urban areas
Mustard - Eastern States and U.P.

Mustard
Soyabean
Sunflower
Rice Bran

BR
AN
DIN
G
STR
ATE
GY

Saboro brand name will give rise to an integrated

food business in future

Brand Name Options

New Name:

Mahindra
Oil:

Saboro Oil:

High marketing costs

involved to create
new brand
Will give rise to
another disjointed
business
People associate
Mahindra with SUVs
or tractors
Will give rise to
united food business
While promoting for
oil, Saboro fruit
brand will also get
promoted

Proposed Brand Architecture

By Mahindra Agri

By Mahindra Agri
Suffix Agri shifts the recall of
customers from SUVs and
tractors to farm-tech prosperity

Activation Strategy: To create a buzz about

Mahindras foray into edible oil
DISTRIBUTOR CONNECT
Get product feedback by hosting
dinners in major cities for distributors
Free samples to their warehouses
ONLINE
MARKETING

Brand story on
YouTube channel,
Facebook page
Start discussion forums
& engage audience
CUSTOMER REACH
Sample 200 ml packets to
Mahindra employees, Mall
crowd
Provide discount coupons to
Mahindras customers in
other categories

By Mahindra
Agri

Ads in regional dailies &

TV Channels
Stalls in malls to let
people taste snacks
cooked in Saboro oil

EVENTS
Sponsor food-festivals
Set stalls in fairs

Marketing Strategy: Reach majority of the target group

by appealing to their emotions, ethics & logic
Pathos- Appeal to emotions
Highlight Saboro brand
story
Farmers talk about farmtech prosperity

Ethos- Appeal to ethics

Feature on health shows
& magazines
Doctors to review &
provide feedback

Ads & social networking

sites covering customer
testimonials.

Sponsor cookery shows

Product placement & ads
in daily soaps

Health campaigns on
social media
Post brand story on health
communities

Logos Appeal to logic

Health awareness
campaigns to demonstrate
benefits of natural antioxidants

Demonstration of
packaging innovation in
malls

Show food standard

approval stamps on
packets

Comparative depiction of
levels of anti-oxidants on
packets

Financials: Project is viable with high positive NPV &

payback period of less than 5 years
Scenario Analysis

Scenario

Pessimistic

Realistic

Optimistic

Market Share in Branded

3%

6%

9%

Revenue in 2020(crores)

11,005

16,508

24,762

Net Income in 2020(crores)

440.2

660.3

990.4

3%

4%

5%

Initial Investment(crores)

1,500

1,500

1,500

Project NPV(crores)

565.5

2,631

4,696

Discounted Payback

3.25

Average Profit Margin

Roadmap

2016

2017

Phase 1

Phase 2

Launch

Launch

Soya Bean
+ Rice Bran

Mustard +
Sunflower

2018

Start educating
rural consumer

2019

Launch a mass
market product
with sub brand

2020

Enter into rural

market with
small SKU

Executive Summary
In order to devise an entry strategy for Mahindra into edible oil, we started with an industry
analysis, followed by an extensive primary research where we interacted with customers
across 8 states and other stakeholders.
Industry analysis shows that the branded oil segment is growing at a rate of 15-20%
presenting a huge opportunity. Moreover, Mahindra can increase its urban touch points and
derive synergies from its existing businesses through this venture. From primary research, we
found there is a rising focus on purity & natural anti-oxidants. Current packaging poses a
certain inconvenience to consumers. To address these findings, we propose a nourishing
edible oil that keeps one young & healthy with the goodness of natural anti-oxidants. We
also propose a packaging innovation by giving nozzles on top of 1-2 litre packets for easy
use.
We decided to launch Mustard, SoyaBean, Sunflower & RiceBran under the name
Saboro in two phases. To reach majority of the target group of women in the age 25-40 we
devise a market plan which appeals to their emotions, ethics & logic. From a financial
perspective, the project is viable as it has high NPV of INR 2649 crores with a payback
period of under 5 years. We finally show a roadmap for the product over next five years where
Mahindra gradually enters mass market with a sub-brand.

Thank you!

Television Partner

Knowledge Partner

Placeholder for Team Logo

here

Appendix- 1
Financial Status Of Project In Realistic Scenario
2016

2017

2018

2019

2020

Branded in MMT

12

13.91

16.00

18.40

21.16

Mahindra's Share in Million Litres

242

556.64

960.20

1,104.23

1,269.87

Mahindra's Revenue in crores

3,146

7,236

12,482

14,355

16,508

Expenses in crores

3,020

6,946

11,983

13,780

15,847

Net Income in crores

125.84

289.45

499.30

574.20

660.33

3%

4%

4%

4%

4%

251.69

377.54

377.54

377.54

Profit Margin
Initial Investment in crores

1500

PV of cash flows in crores

125.84

NPV in crores

2631.133
All currencies in INR

Appendix- 2

Financial Status Of Project In Pessimistic Scenario

2016

2017

2018

2019

2020

Branded in MMT

12.10

13.91

16.00

18.40

21.16

Mahindra's Share in Million Litres

242.01

417.48

640.13

736.15

846.58

Mahindra's Revenue in crores

3,146

5,427

8,321

9,570

11,005

Expenses in crores

3,020

5,210

7,988

9,187

10,565

Net Income in crores

125.84

217.08

332.87

382.80

440.22

2%

3%

3%

3%

4%

188.77

251.69

251.69

251.69

Profit Margin
Initial Investment in crores

1500

PV of cash flows in crores

125.84

NPV in crores

1308.80
All currencies in INR

Appendix- 3
Financial Status Of Project In Optimistic Scenario
2016

2017

2018

2019

2020

Branded in MMT

12.10

13.91

16.00

18.40

21.16

Mahindra's Share in Million Litres

363.02

834.96

Mahindra's Revenue in crores

4,719

10,854

18,723

21,532

24,762

Expenses in crores

4,530

10,420

17,975

20,671

23,771

Net Income in crores

188.77

434.17

748.95

861.30

990.49

4%

5%

5%

5%

5%

377.54

566.32

566.32

566.32

Profit Margin
Initial Investment in crores

1500

PV of cash flows in crores

188.77

NPV in crores

4696.7

1,440.30 1,656.35 1,904.80

All currencies in INR

Appendix- 4
Assumptions
CAGR of Branded
Total Branded
Total Consumption in MMT
Branded Consumption in MMT
Average Price Per Litre in INR
COGS
PFW
COMP
S&D
Marketing
Total Expenses
Investment for capacity in INR
crores
Discount Rate

15.00%
50%
18.3
9.15
130
75.00%
2.00%
2%
7%
10%
96.00%
1500
15%

Appendix- 5
Capacity Requirements
Crop

Oil to be
Refining
Oil
Produced
Capacity (daily) Yield
(annual)

Seed
Crop Yield
Crushing
Hectares
Requirement
(tonnes/hect
Capacity(daily)
needed
(annual)
are)

Soyabean

533

1.8

15%

3555

12

1.3

2735

Mustard

431

1.5

35%

1233

1.2

1028

Sunflower

228

0.8

32%

714

2.3

0.9

793

Rice Bran

76

0.3

All capacities in 000 tonnes

Appendix- 6
Competitor Analysis
Company

Income

Expenses

Ruchi Soya Inds. Ltd.

2,65,655

2,60,901

12,499

Adani Wilmar Ltd.

1,44,103

1,43,470

Gokul Refoils & Solvent

Ltd.

58,999

Marico Ltd.

PAT

PAT%

4.71%

2,362

0.89%

4,541

3.15%

754

0.52%

59,106

2,525

4.28%

129

0.22%

35,188

32,224

6,240

17.73%

4,290

12.19%

Liberty Oil Mills Ltd.

20,941

20,666

368

1.76%

109

0.52%

Godrej Agrovet Ltd.

28,688

27,849

1,901

6.63%

1,001

3.49%

Gemini Edibles & Fats

India Pvt. Ltd.

16,618

16,583

1,266

7.62%

73

0.44%

Sanwaria Agro Oils Ltd.

16,275

15,730

800

4.92%

205

1.26%

Average Top 10 players

PBDITA PBITDA %

6.04%

2.20%

Appendix- 7
Competitor Analysis
BUYERS CLOUT: HIGH

SUPPLIERS CLOUT:MEDIUM

Consumers are price sensitive

Very little product

differentiation in unbranded
segment

In branded, customers are little

more sticky
COMPETITIVE INTENSITY:

Large number of oilseeds

producers, although the
produce per farmer is low
However, MSP acts as floor
price

HIGH
Highly fragmented industry
Capacity utilization is low
because of less availability
THREAT OF SUBSTITUTES: of raw material
MODERATE
High tendency to down trade
within category in unbranded
segment
In branded, consumers are
more health and conscious, so
extent of down trading is less

THREAT OF NEW
ENTRANTS: LOW
Large dealer/retailer
network represents the
industrys biggest entry
barrier.
Heavy investment in brand
building
High initial investment