We hope to be in metros & big cities by year-end: Akshay Bector

Cremica Group, the Punjab-based maker of ketchup, mayonnaise, spreads, biscuits and buns, is managed by brothers Akshay, Anoop and Ajay Bector. The Rs 500-crore firm was set up by their mother Rajni Bector in her garage over three decades ago, and is today a leading supplier of bakery products and condiments to quick-service restaurant chains like McDonald’s, Café Coffee Day and Barista. The brothers plan to demerge into two separate entities, paving the way for an exit for private equity investor Motilal Oswal to offload its 20% stake (bought for $13 million in 2010). While the biscuits business is planning an IPO, condiments under Akshay Bector is going national in the retail space by foraying in the high-margin kettle chips (cooked in small batches) segment. Bector spoke to ET on the benefits of the demerger, the business plans to leverage its association with restaurants and prospects of high-margin packaged foods. Edited excerpts


Cremica isn’t yet a national player, despite being around for years. Why?

That’s not entirely true. We work closely with restaurants and coffee chains in the condiments space — through that channel we have been national for years. Within condiments, we touch two million consumers daily. But in retail, yes, our presence was so far restricted in the West and South. We didn’t focus on distribution enough. But we are beginning to seed markets like Mumbai, Pune, Chennai and Hyderabad with products like ketchup, mayonnaise and kettle chips under the Opera brand. Before the year-end, we hope to be in the metros and big cities.

You’ve launched packaged snacks at premium prices at a time when consumers are cutting down discretionary spends. How will you get volumes and compete with aggressive players like Frito-Lay, Parle and ITC?

It’s a bold move – to compete with the names you’ve mentioned. But we still expect reasonable volumes... that’s because we are leveraging our long-standing association with restaurant chains and coffee shops. We believe that’s our big advantage. And while we have experimented with some snacks earlier, we realised the products were not differentiated. In case of Opera, our competition will be more from imported products. That’s why we will retail the product only in high-end grocery stores.

Why did the Cremica Group decide to buy back the stake held by PE fund Motilal Oswal? How much is Cremica paying for this buyback?

The businesses are in a developmental stage. We need a few more years to make the bottomline predictable for any equity investor. The buyback agreements are in place. Now it’s a matter of process. We expect to close it by year-end. I can’t comment on the valuation.

Why did the family decide to demerge biscuits and condiments?

The demerger will help us focus better on our businesses. We believe it will be beneficial in the long term. The two were originally separate and later we did try to run the businesses as unified. But the family agreed it’s better to split up.

Any more packaged snacks you intend to launch?

Not immediately – our focus is on the existing business and kettle chips. The bandwidth to enter newer categories is not available with us at this stage.

Is it true that one of the co-owners, Ajay Bector, will also offload his stake and exit the family business?

I can’t say