A Pune company turns hot favourite on dining tables in US
MIRIAM JORDAN

NEW YORK, FEB 27: Back in the early 1990s, Tasty Bite Eatables thought it had a winning idea for India's growing urban middle class: vegetarian Indian meals with an 18-month shelf life in a country where refrigerators are a luxury.

It flopped. Not only was boil-in-a-bag convenience ahead of its time in the newly opening economy, but at about a dollar a package Tasty Bite was too pricey.

Today, however, the India-based company has new owners, a new marketing strategy and a new life in America. In just four years it has become the most popular ethnic brand in US natural-food stores, according to Spence Information Services, a market-research company specialising in the natural-food industry. The Pune company is launching a line of Thai meals, and recently its Jaipur Vegetables and Siam Green Curry started migrating to mainstream US grocery chains including Safeway and Gristedes Foods of New York.

``They taste very homemade,'' says Sarah Chang, a computer professional in Sunnyvale, California, who is the mother of two toddlers. ``When there's no time to cook, I just plop one in the microwave.'' Her favourite flavor is Kashmir Spinach.

Tasty Bite's 10-year transformation is a telling reflection on India's changing marketplace as its economy has cracked open, as well as the importance of overseas Indian money and business savvy. The company's first hope came in 1992 from PepsiCo. The beverage company had entered India three years earlier, when free-market reforms were just beginning. The Government required Pepsi to generate one dollar in export sales for every dollar it earned in India. Pepsi went shopping for local food investments and spotted Tasty Bite.

``We liked the food, we liked the concept,'' says Ashok Vasudevan, then a member of Pepsi's start-up team in India, but ``we hated the packaging. We hated the plant.''

Pepsi agreed to distribute Tasty Bite abroad and began helping the small company upgrade its facilities. But just a year later, the Indian Government abolished its export requirement. Pepsi, preferring to concentrate on its core business, walked away from Tasty Bite.

By 1994, however, Vasudevan was no longer at Pepsi. In Old Greenwich, Conn, he and two fellow overseas Indians who had set up a consulting firm specialising in South Asia decided to step into the Tasty Bite vacuum. Their company, Preferred Brands International, began marketing the product in the US in 1995. It took management control two years later, and last year acquired ownership in a joint venture with Commonwealth Development, a British investment house.

The overseas Indian team's first goal was streamlining the product line, cutting it to five varieties from 28. Instead of four package sizes, they offered just one: for two servings. They replaced the stodgy packaging with boxes that have an upmarket matte finish adorned with Indian floral motifs. The meals got new, catchy Indian names, such as Madras Lentils instead of dal makhani, and Bombay Potatoes for alu chole.

Vasudevan says the target market was ``food-conscious Americans''. Sales of natural foods were growing 23 per cent annually, he says, compared with 2 per cent for the mainstream grocery segment.

Five varieties of Tasty Bite were introduced to Southern California in 1995. Trader Joe's was one of the first natural-food chains to stock Tasty Bite, and it now carries the meals in nine varieties. ``Our customers enjoy vegetarian meals that are easy to prepare,'' says Cara Yokomizo, a buyer for the chain, which sells each packet for $2.19 (the average retail price throughout the US is about $3.50).

Tasty Bite had sales of just $1 million in 1996. They doubled in 1997, as the product appeared on the shelves of health-food stores in Northern California, Washington, Arizona and New Mexico. In 1999, US sales reached $3.8 million. Sales are expected to cross $5 million this year, with profit margins of about 35 per cent. Total brand sales at the retail level are expected to hit $12 million.

``It's one of our top sellers,'' says a spokeswoman for Mountain People's Warehouse, a large natural-food distributor. ``It appeals to people on the go, yuppies and folks of Indian origin.''

Tasty Bite consumers are three times more likely than the US population as a whole to have a household income above $75,000, have at least four years of higher education and hold white-collar jobs. Tasty Bite is now available in 20 American states, and about 87 per cent of all consumers are non-Indians, according to independent consumer surveys.

Aside from convenience, the selling point is the product's healthful image. The company grows its own vegetables and cooks them at a modern plant in Pune. Dishes of lentil, spinach and chickpea are packed in a sterilised foil envelope, which retains freshness and flavor without refrigeration or preservatives. The technology, known as retort pouch packaging, was developed for the Apollo space programme.

To cater to US health-food sensibilities, the company cut the saturated fat and salt content by about a third when it launched the products in the US. Nevertheless, some consumers still worry. ``The only problem is that they're very high in sodium and oil,'' says Chang, the California consumer.

Last year, the company launched its line of Thai meals as well as a retail Web site. It also took its boldest step yet: It returned to the Indian market.

Its instant meals are now available in five cities, and will appear in an additional six over the next four months. ``It's time for convenience foods to enter India in a big way, and we want to be one of the early movers,'' says Ravi Nigam, president of Tasty Bite India. But it has had to change its recipe slightly. ``What we offer in the US would pass as bland for Indians,'' Nigam says.

-- Courtesy The Wall Street Journal

Copyright © 2000 Indian Express Newspapers (Bombay) Ltd.