‘We have been growing at 35% CAGR while the market has been at over 10%’

Freedom Healthy Cooking Oils - an edible oil brand - that started business in the last decade has today become a market leader in four Indian states and the largest sunflower oil brand in India. In a conversation with exchange4media, the Senior Vice-President - Sales & Marketing for Freedom Healthy Cooking Oils - P Chandra Shekhara Reddy - talked about the company's marketing strategy, the challenges and opportunities facing the cooking oil industry, and his vision for the future of Freedom oils.

Edited Excerpts:

The edible oil industry is highly competitive with many established players. Can you elaborate on the strategy that Freedom adopted to make a name for itself and stand out in this crowded market?

Pricing is very sensitive in the edible oils sector but we are able to pass on any price increase or decrease to the market, hence it is not a big concern. That's an advantage of the edible oils industry. In our trade, there's transparency between the manufacturer and the consumer that the prices do fluctuate. We do pass it on to the consumer but there is a demand correction that happens.

Talking about being competitive, 95-90% of the raw material is basically a commodity and hence it is not in our hands, it is in the market's hands. But two things help us - one is sourcing the right quality raw materials and the right time. The second is that within these commodity players, the cost of manufacturing is too critical. Being a late entrant to the market, all our plants have the latest technology. This has helped us to meet the increased demand with a completely robotic plant with low processing and packaging costs. Hence, we are able to distinguish ourselves and have remained competitive with the volumes that we are in today. The size and scale of our manufacturing capacity give us that edge.

How has the appointment of actors Yash and Radhika as brand ambassadors impacted Freedom's brand image and market presence?

We wanted to bring them in post the KGF 1 release and that is when we signed him as he became an India star post that, but in the south, he was already very well known. Our focus was on Karnataka when we signed on Yash, and with Radhika being his better-half, this was a perfect balance for us. COVID-19 and the short supply due to the war in Ukraine hampered the marketing activities we planned with them. Barring that, this partnership has worked for us, the product awareness, penetration and the market share have all increased.

Can you share some insights into the digital and OTT platforms that Freedom is using for customer outreach? How effective have these platforms been in reaching out to customers?

Digital is a brilliant platform, but my observation is that it is skewed towards the <25 years old demographic, which is also our target - >25 plus especially women and we see that a lot of consumers including women are using digital. Our brand journey started in 2010, and until 2014, we spent very nominally on digital but with the digital explosion, we have increased our digital spending. In fact, Google partners with us and is sharing our data. We spend a lot on YouTube and on other mediums. There's a lot one can do on digital in terms of engagement, on social media platforms like Facebook, we always call for the reactions and wait for comments. That’s possible on digital which wasn’t the case with mass media. We are also collaborating with cookery programs on the OTT platforms to drive more reach and awareness.

In your opinion, what has been the key driver of customer engagement and brand usage for Freedom?

Since we are not into E-commerce - the click-to-buy segment is crucial, it’s more about leading consumers to our brand website, and we are constantly monitoring the feedback. We also post surveys which we have done in the past and launched a new SKU just to take feedback. Our commitment towards Digital is increasing year after year. The various touch points and the way a consumer behaves are changing and as the consumer changes, we are also changing and realigning our marketing spends.

How are you balancing price competitiveness and maintaining quality standards at the same time?

Whatever may be the price, whether we lose money or gain because of fluctuating prices, we never compromise on the quality. As far as price competitiveness is concerned, in most of the markets where we are in a market leader position (except in Karnataka), we are the price leader also.

The market size is increasing, and a lot of people are converting to sunflower oil which is our flagship brand. Barring COVID-19 and the Ukraine war fluctuation, in the history of our brand, the market has always been growing at more than 10% CAGR while we have been growing at 35%. That is only possible when you are giving the right value to the consumer in terms of quality and price and our success story is an illustration of this. Not only that, but the ability to service the customer as quickly as possible is also a plus. Servicing the retail orders and distributors quickly is critical because due to fluctuating prices, they don't want to carry too much inventory. Today, we can service any of our primary orders from our distributor within two hours. We have built that kind of volume and distribution strength.

Among AP, Telangana, Odisha and Karnataka - which is your biggest market? Are there any plans for national expansion?

Wherever we are present, we are the biggest player. In Andhra Pradesh, we are at 60% market share, in Telangana, we are at a 35% market share, in Orissa, currently, we are at a 71.9% market share, in Chhattisgarh we are at 5%, in Karnataka, we're at 6%. At an all-India level, we are at 19.8% while the next brand is at 16%.

If we look at our top four states, we are the largest sunflower oil brand in the country. We are also present in Chhattisgarh and Jharkhand in bits and pieces here and there, but in our top four states, we are the largest player. We are very focused and expanding and we have been looking at it state by state. So, in the last five years, we have been adding products because the consumers’ demands for different categories of oils are increasing. Geographically, we added up Chattisgarh very recently. After this probably will be adding either Maharashtra or Tamil Nadu.