Well-oiled ops help Idhayam stay on top

“In TN, we have 60 per cent market share. We had entered undivided Andhra Pradesh around three years ago. In another four years, we aim to emulate the success that we have had in Tamil Nadu, in those two states - AP and Telangana,” says company CEO VR Muthu, who is unfazed by the presence of sesame oil brands such as VVS, Sastha, Anjali Foods and Pasumark. “Despite their dominance in the districts such as Madurai, Virudhunagar and Namakkal, they have a patchy presence. We are an established player owing to our early mover advantage,” he says, giving an overview of the sesame or gingelly-oil business and the outlook of his company. In TN, which contributes to 80 per cent of its business, there are almost 15 lakh consumers of his product, says Muthu, who has set a target of adding another five lakh customers in this state in the next few years. 

“We feel that number is achievable in the Andhra market, where our door-to-door campaign has kicked off” he says, adding the monthly offtake in TN was 1,400 tonnes and this volume took a hit during the slump period five years ago to 1,100 tonnes. “When our product was priced Rs 80 per litre in 2006-07, we were showing a trajectory of high growth (volume of 1,400 tonnes per month) but prices hit a peak of Rs 290 per litre in 2013. That was the period when sesame seeds exports to China were on a high and the global output dwindled. With Africa, Sudan and Nigeria entering the export scene, sesame exports from India got affected. This led our prices to fluctuate to Rs 140 per litre in 2008-12. 

In 2010-11 our turnover was Rs 250 crore. But, with our current pricing at Rs 175 per litre, we feel this is the best time for business and are upbeat about posting a good growth,” he said. Talking about deploying new ways of branding to expand his customer base, Muthu says “We have been distributing samples to doctors, focusing on the legacy of the product and the benefits of using gingelly oil. We have got on board 500 of the 13,000 retailers in Chennai using this strategy.” Using Metro rail stations like Vadapalani for flex boards advertising has resulted in more brand recall than popular visual media. The presence of the Tamilians abroad enabled the brand to venture into overseas markets such as the US, Australia, Middle East and Sri Lanka. “Our products are available from Toronto to Sydney,” Muthu says, noting that direct exports of typically ‘full container consignments’ are meant only for locations in the US, owing to a larger concentration of Tamil people. 

In other locations such as Malaysia and Sri Lanka, the brand is retailed through the merchant route. Apart from Idhayam, the company also has the low-priced SimSim range of gingelly oil and ‘Har Dil’ brand of mustard oil (monthly offtake of 150 tonnes). “SimSim is subsidised at Rs 30 per litre less than its counterpart Idhayam,” he says adding the price discrimination is to position the product as an “affordable” product. Also, the company had introduced 50 ml packs to target the mass market. Incidentally, the sale of mustard oil was more in south as the scope of its use is pronounced in Ayurveda, masala (spice) and pickles segments.