The spices market is highly competitive
…says Navas Meeran, vice chairman of Eastern Condiments Pvt Ltd (ECPL), which is one of the largest exporters of curry powders in India. When Meeran joined his father in running the family-owned business in 1994, the turnover of the company was in the range of Rs10 crore. It did not take long for Navas Meeran to rework the business model and prepare for long-term growth. And, at the heart of his business model, was the core competency they had built up-an efficient distribution system. Eastern Curry powder did not remain in the league of the small player for long.
By 1998, the company’s turnover had surged to Rs 40 core and it was producing and selling a full range of curry powders. By 1996-97, Eastern brand crossed the boundaries to touch Karnataka. And in 1999, the Meerans took a strategic decision by getting into direct distribution of their products everywhere. Eastern’s turnover stood at Rs 162 crore in 2005-06. By 2006-07, it surged to Rs 208 crore. In the West Asian market, the company pulled off a triumph by emerging as the largest selling curry powders brand in the UAE.
At present, the company is weighing several new opportunities like private labelling and capturing new export markets. In this exclusive e-conversation with Richy D Alexander, Meeran shares his views on the Indian condiments market vis-à-vis the future plans of the company.


On the Indian condiments market…
The condiments market in India, specifically with respect to spice trade, is growing at a fast pace. The sector constitutes two main categories – straight powders (raw spices like coriander, chilly, turmeric, pepper, etc, in whole and in powder form) and blended spice powders (masala). While straight powders account for 70 per cent of the market, the blended spice powders make up for the rest.
The presence of regional and local players is significant in the straight powder’s market, while in the blended spices market the presence of organised sector is more prevalent. The masala market is characterised by regional tastes, which is different from region-to-region, state-to-state, or even within states. This poses a challenge to any national brand. And, with the influx of modern retail outlets, the markets are bound to expand further.

About Eastern Condiments Pvt Ltd…
Eastern Condiments Pvt Ltd (ECPL) commenced as a trading enterprise in Adimali - a remote village in Kerala, en route Munnar. It was established by a visionary entrepreneur M E Meeran and incorporated as a private limited company in 1989. Since then, the company has established itself as a leading player in the processed spices segment.
For 10 consecutive years, the Spices Board of India rated ECPL as the largest exporter of spice powders in consumer packs. This has helped the company in establishing itself as one of the market leaders for straight powders and spice masala in India The company exports its products to the markets in Middle East, Europe and the US. It has sales & distribution arrangements in 10 countries.
The company has several quality certifications and accreditations to its credit, which includes HACCP and ISO 22000. It is, today, on an aggressive growth path and is in the process of transforming itself into a highly mechanised, quality-conscious and IT-enabled organisation. It recently bagged investments from the US-based New Vernon Pvt Equity Ltd.

The company’s performance in the past one year…
ECPL clocked a turnover of Rs 200 crore for the financial year 2007-08. It has been growing steadily for the past few years, and during the last year, the brand made its foray into some of the North Indian states, which improved its distribution network in more than 10 states. We have done well in the southern region, while we have also grown steadily in other regions. We are increasing our product portfolio to include products with regional flavour and have successfully launched a few new products.
The company has increased its production capacity to 300 tonne per day and has emerged as one of the largest integrated spices and condiments processors in the country. The capacity expansion is a part of the series of efforts to consolidate market leadership of the company and expand towards new areas.
EPCL, the flagship company of the group, started production from its new facilities after installation of technologically advanced imported machinery and successfully conducting product trials. The current capacity expansion was undertaken with an investment of Rs 50 crore.
The company also plans to set up a chilly processing plant at Guntur in Andhra Pradesh, coriander plant at Rajasthan and an export unit at Kothamangalam. These plants are in various stages of their planning and implementation.
The Spices Board of India selected the company for two awards for outstanding export performance of spices in consumer packs during 2003-04 to 2006-07 and also for outstanding export performance of spice mixes (including curry powder) during 2003-04, 2005-06 & 2006-07. The award is a testimony of their set global standards in quality and manufacturing process.
A unique business model employed by the Eastern Group, by making every distributor a partner and providing additional incentives to them, has proved to be of immense help in entering new markets. We are making a major foray into the Western Region, especially Maharashtra and Gujarat. The number of vehicles in Mumbai rose to 61 after launching the scheme one year ago.

Demand for Indian spices with respect to exports…
Indian spices are in great demand all over the world. They are mainly exported to the US, Europe, GCC countries, etc. According to the Spices Board of India, the country exports more than 0.40 million tonne of spices annually, and also accounts for around 48 per cent of the global export volume and 44 per cent of the export value. Overall, spices are grown in about 2.9 million hectares of the country. The spices production in India, as much of the agriculture in the country, is undertaken in millions of tiny holdings that determine the livelihood of a large number of the rural population.
According to the International Organization for Standardization (ISO), there are in all about 109 spices and India produces as many as 75 in its various agro-climatic regions. The term ‘spices and condiments’ applies to the natural plant or vegetable products or mixtures in whole or ground form, which are used for imparting flavour, aroma and piquancy to food items. Spices are also being used within the country for imparting flavour to the foods and in medicines, pharmaceuticals, perfumery, cosmetics as well as several other industries.

Eastern Condiments’ overseas operation…
ECPL operates through a set of dedicated distributors in most of the countries and has established its exports market in the Middle East, US, UK, Australia, Germany, etc. Majority of the exports is in the Middle East where the demand for exports is quite high. The company is also setting up a joint venture in the Middle East for processing and packing commodities. The joint venture with UAE-based Jaleel Traders for processing spices is about to commence the functioning. The facility is expected to improve the market share of the ‘Eastern’ Brand in the entire region of West-Asia. ECPL has been awarded the ‘Largest exporter of blended spice in consumer packs’ award by the Spices Board of India for 10 years in a row. Besides spices and condiments, Eastern Group has business interests in rubber re-treading, mattresses (Sunidra brand), readymade garments (King Richard brand) and packaged drinking water.

Quality initiatives taken by the company…
The company has installed a fully automated quality control laboratory to check quality in spices and ready-to-eat food products. The raw materials to finished products pass through stringent quality control measures. The lab has three sections - the chemical, instrumentation and the microbiological. The full bench of equipments from Biomerieux ensures that test results are received within hours compared to normal testing time of 2-3 days.

The competition within the spices market...
The spices market is highly competitive. It is high in case of straight powders segment, which includes different categories of suppliers and product value addition is limited. In the blended spices segment, taste and product quality are the differentiators. Capabilities in sourcing raw material, product development, supply chain management, and distribution network act as a key success factors in this highly competitive environment.

Trends in the condiments market…
It is a very dynamic market and we have been noticing the trend where the conversion from home ground powders to buying loose powders and now to the current inclination of buying branded spice powders is on the rise. The market for blended spices and ready-to-cook spice powders/paste is also growing albeit not at the same pace. A thriving economy with a growing middle-class segment and changing lifestyles offers ample growth opportunities.

Future growth strategies of the company...
We have a variety of strategies, which are the mantras for our growth. These include product portfolio addition; distribution channel expansion; setting up new manufacturing facilities; upgrading existing facilities; improving supply chain capabilities; acquiring and nurturing talent; imbibing state-of-the-art technology, etc. The group, with a turnover of Rs 260 crore, is aiming to achieve a target of Rs 1,000 crore by 2011. As part of our current expansion programme we will be entering the seeds and pulses market in the retail as well as bulk segments.

Outlook for the Eastern Condiments’ business...
Product portfolio addition, distribution channel expansion, setting up new manufacturing facilities, upgrading existing facilities, improving supply chain capabilities, acquiring and nurturing talent, imbibing state-of the art- technology wherever applicable etc. are what we believe are our mantras for growth. As part of our current expansion program we will be entering the seeds and pulses market in the retail as well as bulk segments. ECPL is on an aggressive growth path and in a few years from now we would emerge as a leading player in the Indian as well as the international markets