Finance @ Knowledge Zone


Carnation Nutra Analogue Foods Ltd.

- by Manisha Kale *

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Key Future Value Drivers

  • Carnation's Nutralite has a bright future with health experts advising margarine over butter.

  • Nutralite can replace butter in all applications. It can be used for cooking, baking, frying, and as a spread on bread, toasts, biscuits etc. Hence, there are tremendous growth prospects for the product.

  • Carnation is targeting urban health conscious middle class segment. As the health awareness among Indian populace is at a never before high, the product has also shown extreme consumer interest which is only expected to increase from here.

  • Margarine is priced comparatively cheaper to butter. Hence, making it an attractive option for general masses.

  • Unlike diary products, Nutralite margarine is not prone to conventional problems attached with diary products pricing, shortages, low shelf life, and health risk.

  • Carnation is well-equipped to produce industrial margarine, puff pastry margarine, creaming margarine as well as dairy and non-dairy spreads. Hence, it can productively diversify to a number of user segments.

  • Carnation is using State-Of-Art Technology for its operations. Nutralite is manufactured & packaged using sophisticated imported European machinery.

  • The company has set up a strong distribution across India with about 250 distributors.

  • Infrastructure. The company has nearly doubled its capacity for manufacture of 'Nutralite Margarine'. It is also setting up its own storage area in prime areas enabling easier marketing of products.

  • The company is planning on launching an aggressive marketing campaign in Q3 aimed at image-building & awareness creation.

  • The company is also considering exports aimed at Middle East & African nations.

Threats & Challenges

  • People still look with suspicion on analogue foods taking them to be artificial food & prefers the traditional milk-based products. Awareness creation is a major challenge before the company.

  • The operation of the Company is limited to one segment viz, packed food products.

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* Manisha Kale, MBA (Finance), is currently working in Indiabulls Financial Services Ltd. as Manager-Equities. She is independent of the management of the researched company. The information contained in the article has been collected from sources believed to be reliable; the author accepts no responsibility for the accuracy of its contents.