Paan turns over a new leaf as FMCG

The ubiquitous paan is quietly shedding its repulsive spit stains image and gaining cool quotient as an FMCG product.

The modern no-spit paan has approval of the food regulator, is assembled and packed at factories and comes with a shelf life of more than six months.

"We sell about a lakh paan pieces a month," said Pankaj Shah, fourth-generation entrepreneur of Chandan Mukhwas, a Mumbai-based supplier of mouth fresheners.

"Consumers want convenience and hygiene and paan is no longer frowned upon." Chandan Mukhwas sells a dozen variants from about 3,000 stores.

It also exports to nearly 30 countries, catering mainly to Indian diaspora. There are over a dozen other brands that sell paan, such as Dizzle, Yamu's Panchayat, Mapro Mazaana, Pethawala Agra, Surbhi, Dil Bahaar and Natraj.

Mukhwas or mouth fresheners is one of the largest categories within food, but largely unorganised. Retailers, however, expect sweet paan to outpace western desserts, if marketed well."Add shelf life, remove harmful ingredients, brand it and you have an Indian equivalent of After Eight mints," said Devendra Chawla, president of FMCG and brands at the Future Group that runs the Food Bazaar chain of supermarkets.

"This is category creation that can give chocolates a run for their money if positioned well. Indian consumers embrace traditional food products that are packaged well." There are an estimated 7 lakh shops nationwide selling the desi treat, which, according to the Bhagavata Purana, was even chewed by Lord Krishna. Paan has been retailing online in markets such as the US for about five years now.

Twist in the paan
So, what has really changed in India? As traditional recipes from aam panna to jaljeera are branded for organised trade now, the all male paan too has left the street corners and is sold at supermarkets and online stores. And women are a big customer segment.

"It reaches us mostly as a friend of tobacco and men. We're missing a trick there. Paan is quintessentially an Indian food and if placed on the food shelves and not near tobacco, would find its rightful appeal amongst families," said Damodar Mall, chief executive at Reliance Retail, which is doing a pilot study in the National Capital Region to present fresh chilled paan next to yoghurts.

Paan companies are also exploiting the halo effect from herbals. "Paan has medicinal quality and is used as digestives for centuries. We are just adding a cool quotient to it by packing it attractively," said BK Shaw, general manager at New Delhi's Yamu's Panchayat, which partnered Reliance Retail to list its products.

The company runs 56 paan outlets, many of them 'manned' by women. Sweet pan, lacking cured tobacco, is priced at Rs15-35, with a host of options, from chocolate-coated and strawberry paan to saffron and kiwi.

Although companies claim modern trade helps in creating higher visibility, margins aren't lucrative. Paan parlours sell fresh paan at Rs 10 to as much as Rs100 a piece. On the other hand, cost of branding and packaging can eat into profit unless volumes are large enough.

The flipside comes from the local 'panwadi.' "People will still prefer fresh pan as it can be customised and made to order rather than having a processed one," said Mahesh Tiwari, a local paan shop owner at Mumbai's western suburb of Borivali.

(Source: ET Retail.com dated 2016-09-17)