“We should advertise the health benefits of quality spices”
Unique Fragrances is a manufacturer cum merchant exporter of Indian grocery, spices & general items, to cater to the tastes of their customers. The company specializes in exporting handpicked, clean and sifted spices in consumer packs as per the requirement of its customers. By building and strengthening its associations with second and third generation migrants and participating in various trade shows, the company has successfully penetrated markets like the US, Canada, Australia and New Zealand.
Rajat Luthra, Director of Unique Fragrances, speaks in his exclusive interaction with TPCI about the company’s journey from being a leading tobacco exporter to an exporter of spices. He also shares his thoughts on the key challenges faced by the sector, India’s perennial strengths as a spice exporter and the importance of raising awareness about the benefits of spices, as detailed in India’s ancient texts.
TPCI: How did you come up with the idea of starting a business in this line?
Mr. Rajat Luthra (RL): My father Sh. Deepak Luthra, started this business of exports of Indian groceries & tobacco products. When I entered into this venture in 2003, it was difficult to differentiate ourselves from the other exporters of the market. That was a time when I thought that we should manufacture/process some product which differentiates us from the others. On a meeting with one of our clients in USA, I found that most of the importers are facing difficulties in importing spices due to adulteration, & premium whole spices were in scarcity. From there on we started exports of premium, clean, sterilized and handpicked whole spices.
TPCI: What were the initial challenges you faced, and how did you overcome them?
RL: Initially when we approached our clients with these premium spices, our prices were way too high in comparison with the prices of other exporters. The second big challenge was procuring good quality clear packaging as the packaging industries in India was still developing. Last, but not the least, talking to these foreign buyers was difficult as internet had not penetrated so much. Hence, finding good buyer was a big task for us.
TPCI: Which markets did you tap for your product and why? What market penetration/promotion strategy did you follow?
RL: The Indian/Asian migrants to USA, Canada, Australia and New Zealand had settled there since long. Their second and third generations were in business; hence these young entrepreneurs understood the effects of the quality products. I used to travel to these countries calling to the clients and assuring them of quality spices, turning them into our permanent customers.
We also exhibited our products through exhibitions promoted by Government bodies like Spice Board of India, APEDA etc. Recently, since the start of digital world, we have also started digital marketing which has increased the number of leads we get every month.
TPCI: Who are your key competitor countries, and what unique competitive advantages have helped you establish your business presence?
RL: In spices, the major competitor countries are Vietnam, Sri Lanka and Indonesia. But in packed spices, Pakistan & UAE are also making their mark due to the tax benefits and subsidies given by their respective governments. The advantages of India are:
a. Availability of almost all the spices, and that India being considered as a one stop shop for spices all over the world.
b. Our better understanding of the spice consumer all over the world.
To stay ahead of the competition we made several changes in the infrastructure to clean, grade and sterilise the most premium spices that go through all the tests in our in house testing labs.
We did extensive market research on consumer surveys to understand the requirements of the consumers. The digital marketing helped us foresee their thoughts, why consumer chooses a particular brand of spices.
We, being a technology driven company, have invested heavily in most modern machinery to clean, grade, de stone, remove impurities, sterilize and grind in cool conditions in order to achieve the best of aroma in the spices. The consistency in our spices has also helped us built the confidence in our consumers.
TPCI: What are the major tariff/non-tariff barriers that you have experienced in the international markets? What should be the roadmap to overcome these challenges?
RL: There are a few barriers but we have overcome the challenges and they do not deter us. The barriers we face are as follows:
a. Almost all the African countries impose higher import duties on Indian products whereas there is practically NIL duty from Middle East, this is where the spices manufactures of Pakistan get the advantage.
b. Although we have SEZs set up by the Indian Government but those exporters who are located in remote villages/towns do not get the benefit of importing wholesale spices from other countries, cleaning and processing & then re-exporting.
c. The Government of India should help these exporters to process and re-export the spices by making the laws governing duties simpler and more efficient. This will benefit our country with inflow of foreign currency.
TPCI: What are the expansion opportunities you envision for yourself in the global market at present? How do you plan to tap them further?
RL: The market potential is huge. There are buyers of quality Indian spices and we are growing at a rapid pace. As Indian food is liked all over the world, there are many untapped countries which we have to reach for quality spices.
Exhibiting our products worldwide and then tapping these consumers through digital marketing seems to be a good way of going forward. Availability of latest technology and its import at lower duty rates shall bring in more opportunities for Indian exporters to supply good quality Indian spices.
TPCI: What is your view on the general competitiveness of Indian exporters in this sector? How can it be further enhanced?
RL: Earlier most of the Indian exporters were competing with each other on price sensitivity but we need to understand the consumer needs and their eagerness to buy good quality spices, so our focus should be on customer satisfaction. We need to tell our consumers the health benefits of good quality spices as described in Ayurveda and earlier Grantha’s. The Government should educate the farmers to produce good quality spices through improvisation of technologies and deletion of fertilization and chemicals, which shall enhance their income many folds in the long run. India needs to advertise the health benefits of good quality Indian spices, which help the consumer in India as well as abroad to buy Indian spices.