Stocking flavoured potato wafer packs is no longer a wafer-thin business. Singh will not talk about exact margins, but he admits that Bingo, the latest entrant has offered smaller shops like his, a margin that is 4-5 per cent higher than competitor Frito Lay's.
As tobacco-to-hotels major, ITC, set its eyes on this segment a couple of months back, with the launch of Bingo, this category is sizzling. Across the country the action is visible.
In places like Bangalore, promotional events like games and competitions based on Bingo have become a regular feature at large malls like Garuda and Forum on weekends. The brand also tied-up with the Aerosmith rock concert that recently happened in the city.
Last week, Pepsico's snack foods company, Frito Lay, announced a major branding initiative for its Kurkure brand. About 35 AC BEST buses in Mumbai, followed by the Metro in Kolkata would be branded by Kurkure.
The action is also visible at retail points. Small retailers, almost all of whom also sell ITC cigarettes, claimed they had been promised a premium if Bingo display was better. With its sole objective of deep distribution, ITC introduced mega-size wafer trolleys outside most mom-and-pop outlets.
Lay's, the top-selling brand reacted with its own version of trolleys parked next to Bingo's display. Of course there were some places where ITC Bingo blocked out its competition. Across the country, Bingo has laid claim to the large format outlets by tying-up with big retailers like Future Group's Food Bazaar.
But not all organised retailers believe in monopoly. At C3, Kolkata's second largest retailer, Kurkure and Lays dominate the branded snack market. The retailer said they would rather offer choice to consumers.
But there are genuine stock issues for Frito Lay, at least in some parts of Mumbai. In south Mumbai, a shop owner said, "We sell both Lays and Bingo. But we haven't received supplies of Lays, which is in much demand, for the past one month."
Similarly, the owner of a distribution agency for Lays said there was a supply issue. The company executives could not be reached for comment.
According to ITC Foods executives, the company has launched an advertising blitzkrieg across the country to create awareness among consumers.
"The brand name Bingo signifies victory. We have employed various strategies to successfully create an identity in the market in a short span of time," said ITC Foods Chief Executive Ravi Naware.
Frito Lay is reacting with consumer promotions. As a part of its Chai Time Achievers campaign, over the next few months the company will run a campaign where consumers can send in recipes using Kurkure, of which 25 winners would be selected.
These families then would be featured on 1 million packs each before October 2007. The contest is being promoted through a television, radio and outdoor campaign, as well as interactive display units at the point of purchase.
ITC claims that it has done its homework well. It spent close to two years for developing Bingo. The entry was prompted by the fact that there are few players in this segment.
"We found that there was only one organised large player at the national level in the packed snacks segment apart from some regional players. There is a big opportunity for us," says an ITC executive.
He adds quickly that the market for the packed-snack-on-the-go segment in India is around Rs 2,000 crore (Rs 20 billion) and ITC is looking at grabbing a 50 per cent share of the market at the earliest.
"We are offering a wide range to ensure that the consumer is not restricted to a monotonous taste," adds Naware. He adds that Bingo has also got an interesting range in the pipeline.
But as of now, it's still early days to say whether Bingo will emerge victorious. Foodworld representatives in Bangalore admit that Bingo has emerged as a "hot selling" snack.
"It is being replenished on a daily basis," a Foodworld representative said. "We are replenishing the stock every day in all metros and cities with population in excess of 10 lakh," Naware adds.
However, in metros like Kolkata, consumers have not yet switched over from Lays and Kurkure. Smaller outlets in Kolkata confirmed that sales of Lays or Kurkure had not dipped.
"Frito Lay is still cashing in on the popularity and brand loyalty that it managed to establish with consumers over the years. Although consumers want to try Bingo, Lays or Kurkure have not been replaced."