US Quaker Oats to make debut in India

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BOMBAY -- Chicago-based cereals marketer Quaker Oats Co. has been given the go-ahead by India's Industry Ministry to establish a wholly owned subsidiary in the country on the lines of rival Kellogg Co.

The proposal for Quaker Oats India, backed with an investment of $20 million, was submitted by the marketer last year. But political factors delayed a decision by the then Indian National Congress, along with plans for other economic reforms. The green light was officially given on July 31.

Quaker's entry will intensify competition in the estimated $4 million breakfast cereals market, which has doubled in size due to Bombay-based Kellogg India's efforts. Kellogg today holds a 53% share of the market, followed by former market leader Mohun Meakin's Mohun Corn Flakes, based in Ghaziabad, Uttar Pradesh, which has a 17% share. Regional brands account for the remaining 30%.

India's predilection for hot, savory and oily breakfasts is a formidable challenge to both local and multinational marketers. Essentially perceived as an indulgence of the upper-income and Western-influenced groups, cereals are now actively promoted by Kellogg as a nutritional product.

Besides regular advertising in print, TV, outdoor and point-of-sale via Hindustan Thompson Associates of Bombay, Kellogg is targeting schools and institutions and organizing "Breakfast Weeks," health symposia and consumer contact programs at department stores and other locations. Kellogg debuted in India in September 1994 with Corn Flakes, Wheat Flakes and Rice Flakes.

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