If Indians were to get choosy, ‘western snacks’ would be impacted first: Bikaji

Bengaluru: At a time when brands are doubling down on their ‘healthy’ offerings, Bikaji believes that the chatter around health consciousness is bigger than the potential market. The bhujia-maker, like other consumer companies, acquired several brands in the frozen food and bakery products’ space to expand its portfolio. In an interview with DH’s Sonal Choudhary, Bikaji Foods International Chief Operating Officer Manoj Verma talks about expansion, acquisition, demand and more.

What would you attribute your plunge in profit and margins to? Also, what does the demand environment look like?

The third quarter of fiscal year 2025 (October-December) was not as good for lots of reasons beyond our control. It derailed the momentum and we are bouncing back. Potato and palm oil prices were very high which led to a negative growth of 15-16 per cent in that category. The demand factor for the overall food category in the last 3-4 quarters has been subdued growth. However, the fourth quarter has seen a revival. Rural is at the forefront for the last three quarters while metro is the worst impacted, which is at a flattish growth.

Recently, we have seen the emergence of a new set of consumers who are shifting towards healthier alternatives and ingredients. How is Bikaji looking to tap into this segment?

So, Bikaji will not stay behind on that. For years now, we’ve had a range of so-called healthy, roasted snacks However, we believe that this market has not evolved as much. Even though a lot of direct-to-consumer (D2C) brands started coming up during Covid, most of them have wound up or are in the process of shutting their brands. Hence, I think this is a little ahead of time, maybe in 5-7 years, we will see the contribution of healthy snacks pick up. But in terms of readiness, yes, we are there.

Lately brands have come into question for passing off certain products as healthy even if they are high in sodium, fats, sugar and palm oil. Does Bikaji use different ingredients for the same products intended for the export markets, given that their regulations are stricter?

We export to many countries which are very stringent, like the USA, one of our largest export markets. So, the understanding and consciousness has been there for years, we abide by the quality norms with our research and development (R&D) consistently at work. We use a specific type of edible oil, which is approved according to Food Safety and Standards Authority of India (FSSAI) rules. While a local brand can use any type of oil, we use the most acceptable quality.

You have a significant presence in North and East India as compared to the southern region. Are you looking at any expansion plans in the latter?

If you look at our strategy, we've divided India into three parts. We enjoy market share leadership positions in Rajasthan, Assam and Bihar. From our business standpoint, they contribute upwards of 70 per cent to our revenue. Then there's a set of states which we have identified and picked up as focus states where we are focusing our expansion in, including Delhi, Haryana, Punjab, and Uttar Pradesh, Karnataka and Chhattisgarh.

How has your sales from online platforms been as compared to offline trade?

So, in India, and more so for this category, the offline or say general trade is the largest channel and will continue to be for many years now. Certainly, online has seen a momentum and this is because of ease. Another reason is marketing and discounting. For us the quick-commerce channel or e-commerce has grown by 50 per cent in the previous fiscal year, but still the contribution is less. About 80-82 per cent of our business comes from general trade. and the remaining 8 per cent is about, which comes from modern trade. 2 per cent plus is quick-commerce. About 3.5-4 per cent is exports and then some institutional sales, like railways, common stores and canteens among others.

Health experts have cautioned that India is becoming the obesity capital of the world. Would you concede that your category of business is facing more headwinds due to increased scrutiny of what's a healthy snack and what isn't.

We strongly believe that snacking is about taste. So, one would want to abstain from having something rather than eating something which they don't enjoy eating. Hence, I think we are a little far off from this stuff. Today, western snacks categories like potato wafers, onion rings are bigger than the traditional snacks category. We believe that if at all this impact would come after many years, it will be first on the western snacks and then some of the traditional snacks.

Can we expect more acquisitions in the pipeline? Any particular product sector you’re interested in apart from frozen, instant food products and bakery?

Not for now, we have enough and more on our plate. In terms of future ready, we have invested quite a lot in building our capacities. Today, we talk, our capacity utilisation is about 48 per cent. Now we are focused towards delivering volume growth as we increase our utilisation, as this utilisation increases.