The Tasty Bite Story

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The Turnaround Story Contd...

A decision to enhance the business through e-business was also taken. The second 'C' of the strategy - conversion - concerned entering into conversion contracts with the National Dairy Development Board (NDDB) and the Maharashtra Agricultural Development and Fertilizer Promotion Corporation (MAFCO) for utilizing TBEL's individual quick freezing (IQF)⁴ facility at its plant. The third 'C'- collaboration - addressed the necessity of attaining optimum utilization of TBEL plant capacities through collaborations.

TBEL's 2,000-tonne cold storage facility for storing ice cream, pulp and vegetables was leased out to HLL and Tropicana (a juice brand from Pepsi). As a result of this, capacity utilization of the plant reached 90% in 1998-99. The fourth 'C' - cultivation - was reflected in the initiatives taken at Bhandgaon, Maharashtra, where the company's 25-acre farm was situated. TBEL employed the local farmers and trained them in hi-tech methods of cultivation for producing high quality vegetables. This in-house sourcing of raw material enabled TBEL to maintain quality standards besides reducing its dependence on others. The company's expansion plans required a considerable amount of money. Payments for placing a product in just one store of a chain in US ranged between $ 5000 and $ 10,000. Even with a narrower base of natural food store chains, it was difficult for PBI to pay $ 10,000 to each of the 200 stores it had shortlisted. To overcome this problem, the company undertook a cluster analysis study5 in various US cities and generated a demographic profile6 of the customers they needed to concentrate on.

The company found that its potential customer's age group was between 25-54, with average earnings of $ 75,000 a year. This helped the company narrow its focus and reduce its list of stores from 200 to 80. This reduced the amount of payments to be made to stores from $ 2 million to a more manageable $ 800,000.

A smaller list of stores also led to a more focussed distribution strategy. Unlike other Indian food companies, PBI worked very hard to offer its customers products beyond pickles, spices and papads.⁷ The company thus decided to launch a wider range of products specifically targeted towards local US customers.

After some intensive research, it decided to launch the Tasty Bite range in the $5 billion natural food category⁸ through mainstream retail chains in the US. PBI also began advertising through sweepstakes⁹ at the retail level and in-store demonstrations, thus enhancing awareness and encouraging customers to experiment.

This also helped in lowering advertising costs significantly. The company also focussed on increasing the Americans' understanding of Indian food. PBI realized that the average American customer was not able to understand the products being offered and their Hindi language names did not make sense to the customers.

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4] A cold storage technology, freezes cooked or raw food products at certain temperatures for retaining the texture, nutrition and good taste.
5] Cluster Analysis is an analytical statistical technique that arranges research data into mutually exclusive and collectively exhaustive groups (or clusters) where the contents of each cluster are similar to each other, but different to the other clusters in the analysis.
6] Demographic Profile is based on the age, gender, life-cycle stage and occupation of consumers.
7] An Indian side dish generally made of black gram flour.
8] The natural foods category consists of products that are minimally processed and are free from artificial ingredients, preservatives and other chemicals that do not occur naturally in food.
9] Sweepstakes includes any procedure in which a person is required to purchase something, pay something of value or make a donation as a condition of awarding a prize or receiving, using, competing for, or obtaining information about a prize.

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