The ghee category is expanding and has potential

Bhaskar S, Export Director, RKG Ghee, opines that the ghee category is gaining traction in the international market due to growing awareness of its health benefits. But tax structures in many countries are more of a burden than the restrictions posed by India’s free trade agreements (FTAs). Therefore, he suggests that the taxation needs to be taken care of in the FTAs.

IBT: How would you describe the journey of  RKG Ghee, its vision, and key achievements?

Bhaskar S: RKG Ghee is a 90-year-old company that is available in 5 states situated in the southern part of the country. Over these 9 decades, this family run business has also managed to establish its presence in over 15 countries. While it has emerged as a renowned name in the Middle East market since the last 25 years, it has been expanding globally since 2015. The key products that it exports include Ghee, Virgin Gingelly oil and Organic ghee. The company aspires to be the No.1 ghee brand globally and create a benchmark in organic ghee, as it seeks to increase its overseas presence.

IBT: What is your company’s reach as per product segments and markets? What are the key ingredients for success in international markets in your view?

Bhaskar S: RKG Ghee is positioned as a premium Indian brand and has a market presence starting from small C-class stores, B-class supermarkets, hyper- & A class markets, boutique & premium stores, online stores, wholesale as well as HORECA segment. In terms of overseas markets, it is available in the UAE, Oman, Saudi Arabia, Qatar, Bahrain, Kuwait, Hong Kong, New Zealand, the USA, Singapore, Malaysia, Brunei, Thailand, Mauritius, and Australia. Its products are available from small 50ml tins to big 5 ltr tins to meet the requirement of all kinds of customers.

IBT: What are the key ingredients for your success in international markets, which could be imbibed by other Indian companies?

Bhaskar S: The key ingredient to the brand’s success is understanding each market and working accordingly with distributors. Further, RKG has gone to launch products in new packing formats based on the country’s requirements and environment. The initial supplies are fixed based on the number of outlets and consumer base. We always want fresh date stocks to be available on the shelf as the first impression from the consumer is always the best impression. Principles like consistency in its quality, purity, flavour and supply play a major role.

IBT: What key lessons has RKG Ghee learned from the COVID-19 pandemic? How have you adapted and realigned your business model?

Bhaskar S: The brand has learnt a lot during the COVID-19 pandemic. Sales were very volatile as there were sudden urgent orders and later drop in sales. Consumer and economic behavior were not predictable. Adding to these woes, there were the shipping and ocean freight issues. The pandemic has taught us that anything could happen and things don’t always work as per plans.

IBT: What advice would you like to offer to young entrepreneurs on managing risk, coping with failure, and leadership?

Bhaskar S: Failures are common in business, we need to take failures positively and try to learn from them. Every failure makes the business and the entrepreneur stronger. At the same time, we need to take calculated risks. When we fail, that failure should not financially affect us in such a way that our progress goes back by a couple of years. Calculated risks and failures refine us to be good leaders.

IBT: How do you view India’s level of competitiveness in your sector, and how can it be enhanced?

Bhaskar S: There is a huge potential for my ghee in India as well as in the global market. That’s the reason why we are expanding our infrastructure as well as product placement globally by finding the right channel partners. The ghee category is expanding and it’s a healthy product. People are turning towards healthy products, which means we have a huge potential ahead.

IBT: Government has announced schemes such as PLI and Atmanirbhar Bharat. How can these be leveraged to enhance India’s processed food industry and enhance its global share in line with its rich agri potential?

Bhaskar S: The Indian Govt is encouraging and supporting the industry in every possible way to increase exports. Moreover, the Indian diaspora can be found all over the world and it is a readily available market for consumer products. RKG is a 2 start export house, AEO tier one approved, EIA approved and now going to be a bonded manufacturing facility.

IBT: What role can FTAs play? How can market entry barriers be eased for Indian exporters?

Bhaskar S: Ghee, falling under the dairy category, has restrictions to enter many countries. Even then, there are plenty of uncovered potential markets to enter and play. Indian products are being recognized and welcomed in most countries. However, the tax structures in many countries are more of a burden than the FTA’s. They levy higher taxes for imported goods and lower for the locally packed or manufactured. The taxation issue could be taken care of in the FTAs.

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This interview is a part of TPCI’s Connect initiative. Views expressed are personal.