Praveen Jaipuriar earnings call questions

CCL Products (India) Limited CC-Dec24.pdf · 2025-02-06

So, we are still doing the trials. There are some, you know, adjustments, and balancing and stabilization that needs to be done. So, instead of December, probably this quarter, we will be stabilizing that and starting the operations. Parth Agrawal: Got it. Just a last question from my side. So, the B2C… Moderator: Parth, I would request you to rejoin the queue, please. Yes, those were your two questions. Thank you. Parth Agrawal: Thank you. Thank you so much. Moderator: The next question comes from the line of Chaitanya Sharma from TradeWalk Research LLP. Please go ahead. Chaitanya Sharma: Yes, my question is how the rising prices impact the demand of robusta coffee and chicory blends in India, especially if you see in the HoReCa sector and among consumers, and if you could also shed some light on what's your sales percentage in North India as compared to South India and which are your dominating markets? Praveen Jaipuriar: Okay. So, you know, the price increase actually affects all of the segments because the coffee component is pretty large, even if there is a chicory mix there. In the institutional, in the HoReCa segment, they are a little more aggressive because none of the buyers would like to increase their end costing to the customer or the consumer. So, pressures are there on the pricing front. Nobody likes higher prices. But having said so, it's been a challenge and this is a challenge for any category if you see when the commodity prices rise, taking up price increases do pose a challenge, but one has to live with it. We are also very carefully calibrating our price increases, making sure that we strike a right balance between generating enough volumes and not to lose volumes because of prices. But yes, pressures are always there when prices are higher. Coming to your next question, which is about how is our B2C divided in terms of zones and all that. So, you know, as of now, almost 65 to 70% of our sales still come from South, but that's how the category is also constructed. Probably we are a little ahead of the category by 5 to 10% when it comes to contributions. But that is because in the initial 4-5 years, we were very focused in the southern markets. We were very keen to make sure that we are able to have a strong foothold here and then, you know, spread our wings as we play. So, our contribution from the other markets, which is beyond South, has been now constantly increasing. Just to give you a picture, two years ago, our contribution used to be 80-85% from the South, which is now at 70%, which means that the other zones are also growing. We are also expanding distribution. Selectively, we don't want to be all over the place, but yes, selectively in other zones also. And we are very fast picking on, you know, spaces like quick commerce and e-commerce, which we feel is a very efficient delivery and distribution model in non-South markets, where we may not have a very expansive distribution. Chaitanya Sharma: Thank you very much, sir. Just one more follow-up question, if I can ask. Praveen Jaipuriar: Yes, please. Chaitanya Sharma: Yes. So, what's the kind of trend you are seeing in the experimental coffee that you have, be that flavored coffee or decaf coffee, what kind of trends are you seeing there? Praveen Jaipuriar: So, we are seeing quite exciting trends. You know, generally, if you see in any food category, a lot of these trends get built up out of form. And what is happening is that you can see the amount of cafes that are coming up around all of us. And these are serving a lot of experiential and experimental coffees. And that's how when people, you know, get used to these kinds of coffees, then they start consuming at home also. We have seen a fair bit of pickup in segments like flavored coffee and some of the higher end coffees even in home. And that's the trend we are observing. And these are good trends because for any food category to expand, you need a lot of experimental trends to emerge so that a lot more usage of the category can be driven. So, Yes, that's our view. I think it will grow further from here. Chaitanya Sharma: And does it in some way also act as an entry product for people to get into the coffee consuming category? Praveen Jaipuriar: Absolutely. Because, you know, people who are, let's say, if you talk about people who are largely tea drinkers, for them to enter a regular coffee category may be a little difficult because they are not used to the palate. But if you were to serve them flavored coffee or some more, you know, different coffee, probably those become a lot more affable and more palatable for them to drink. So, I think, yes, these do help in, you know, expanding the category and getting more people inside the category. Chaitanya Sharma: Right. Thank you very much. I will join the queue for follow up questions. Praveen Jaipuriar: Thank you.

So, in 9 months, Shirish, we are almost 40 plus growth at the overall level, out of which the brand piece is growing at 50%. Yes. So, if you remember last year, we had done 200 crores. And this year we have given the guidance and which we are well on track to achieve 300 crores on just the branded side. So, that means that we would have achieved a 50% growth. As far as the mix is concerned, almost 50 to 60% of our sales still coming from the general and the regular trade. We are getting a very good listing from quick commerce and e-commerce, which is now almost 20%. 25% is from modern trade. So, that's been the mix for us, right. And as we expand more and more in the North, East, and West, I have a feeling that our contribution of modern trade and quick commerce and e-commerce will probably increase from here. Shirish Pardeshi: And growth rates and maybe follow up here, what is the distribution as of December you are holding? Praveen Jaipuriar: So, growth, I told you, we are growing at 50%. As far as the distribution is concerned, we probably… Shirish Pardeshi: Channel wise. Channel wise. Praveen Jaipuriar: So, Channel wise, I think, I will not, meaning I don't have the ready numbers right now. I will share it separately on the channel wise growth. But just to give you a flavor, my growth rates in quick commerce will be the best followed by modern trade and followed by general trade. Yes. That is because general trade bases are high. We are already a little more entrenched in the South markets. And in the North, East and West, we are probably driving modern trade and e-commerce and quick commerce much aggressively than the general trade so that the growth rates in general trade would be lower than e-commerce and quick commerce and modern trade. So, that's on the growth front. The next one you asked was about… Shirish Pardeshi: Distribution. Praveen Jaipuriar: Distribution, yes. So, we are probably now at around 1,20,000 direct distributed outlets and around, which is general trade, and we are around 3,500 outlets we are covered in modern trade. So, that's our total distribution. And of course, in quick commerce, we are at almost 90%, we are present in the 90% of their dark stores. So, that's pretty good in terms of our distribution, because obviously that's an easier distribution metrics to achieve. But that's the figure on the distribution front. Shirish Pardeshi: Thank you, Praveen, and all the best.