Sugar manufacturers in India are in a dilemma, as the branded packet sugar does not seem to be quite sweet to the Indian taste buds. According to sources, Indian consumers, rather than buying packed sugar, prefer to buy loose sugar because of its low price. Consequently, manufacturers like Balrampur Chini Mills (BCML) are gradually phasing out their packets from the markets, while sugar majors like Bajaj Hindusthan have decided to stay away from the apparently profitable market. Dhampur Sugar and Daurala Sugar, the mid-sized sugar firms, on the other hand, are keen to develop the packet sugar to cater to the niche Indian taste.
"Though most of the sugar manufacturers, if not all, entered the packaged sugar segment with much fanfare, none of us have been able to wheedle consumers away from buying loose sugar," industry sources said. Loose sugar is cheaper by atleast Rs. 4-5 per kg. The expenses involved in the packaging of sugar accounts for the high price of the packaged sugar. The rates of the packaged sugar also depend upon the brands of the same. Those related to the large retail format outlets as well as the kirana shops too confirm that the demand for branded sugar is miniscule compared to loose sugar.
Unlike Bajaj Hindusthan which decided to take stock of the segment before taking a decision, BCML entered the market about two years ago but decided to phase out its packet sugar. BCML Managing Director Vivek Sarogi said, "We worked at it professionally for more than a year, but since we could not recover costs involved in packaging, maintaining a full-fledged sales and distribution team and higher mark-up which the retailer and whole-salers demanded over a period, we decided to discontinue selling packaged sugar under the brand." Apart from loose sugar, the company has been selling white crystal sugar under the Balrampur brand at around Rs. 25 per kg.
Despite all this, the mid-sized companies like the Dhampur Sugar and Daurala Sugar are determined to develop the seemingly lucrative market. "We intend to continue to push the Dhampur band in the market as we feel the segment has a huge potential. With higher disposable income in the consumers hand, the awareness for hygienic quality packaged sugar among health conscious and high income group seems to be on the rise," said Saurabh gupta, Director, Dhampur Sugar.