INTRODUCTION

This project is carried out to understand different aspects of a distribution

channel. For this we selected a certain company and two products under the
same group. The selected company is Ruchi Soya and the brand is Nutrela.
We are currently discussing about two products under the brand Nutrela
soya chunks and Nutrela oil.
ABOUT THE COMPANY
Ruchi Soya Industries is a part of the Ruchi Group of Industries. A FMCG
company, Ruchi Soya is one of the leading producers of vanaspati, soya
foods, edible oils and bakery fats in India and is also the biggest exporter of
soya meal from India. It is also the highest exporter of soya meal, lecithin
and other food ingredients from India. It has become one of the leading
companies in the country on the basis of its strict standards of quality
control, continual innovation and invention, and superior trading skills. Social
initiatives of Ruchi Soya with a focus on healthcare, education and womens
empowerment, help in creating sustainable value for society as well as the
organisation.
It has a very wide and extensive distribution network that comprises over 7
lakh retail stores, over 100 company depots, and around 6,000 distributors.
Ruchi Soya has attempted opened new markets with its emphasis on
providing value goods to consumers in popular and premium range. It has a
strong base in modern retail and prestigious hotel chains.
MAJOR BRANDS UNDER RUCHI SOYA

Nutrela

Ruchi Gold

Sunrich sunflower oil

Mahakosh

Soyumm

PRODUCT PORTFOLIO OF RUCHI SOYA

Nutrela has instant soya, ready to cook soya mixes, refined oils and table
spread under its brand offerings. The edible oil range holds a number of
brands including Mahakosh, which is an umbrella brand containing Soyabean
oil, Cottonseed oil, Groundnut oil: Ruchi Gold Palmolein and Ruchi Gold
Mustard oil; Nutrela oils, namely Nutrela Soyabean oil, Nutrela Mustrad oil,
Nutrela Sunflower oil, Nutrela Groundnut oil and Nutrela Rice Bran oil; and
Sunrich sunflower oil. Sunrich is a healthier, lighter and clearer super refined

sunflower oil brand. Ruchi No 1 is a leading edible oil and Vanaspati brand.
Ruchi Gold and Ruchi Star are mass edible oil brands. The two vanaspati
brands, Nutrigold and Ruchi No. 1 are regional leaders in their respective
categories. It also manufactures the soap brand Ruchi No. 1, available in four
variants.
MANUFACTURING CAPABILITIES
Business
Oilseed

Verticals Capacities

per

year Locations

Extraction 3.72 million metric ton

Edible oil Refining

10

3.04 million metric ton

13

Palm Fruit Processing 0.90 million metric ton

Vanaspati & Bakery 0.53 million metric ton

2
7

Fats
Soya meal Capacities 3.05 million metric ton

10

Wind

Power 85.3

MW 11

Generation

SWOT ANALYSIS OF RUCHI SOYA

Strength

Indias largest manufacturer of edible oil

Superior procurement,

trading skills and tough

quality control standards

Continuous effort to meet consumer needs

Wide and extensive distribution network

First exporter of Soya bean meal to South East and

Middle East

Crushing capacity of about 4 million tons annually in

14 plants, extend over 11 locations

Ready-to-eat products on the Nutrela brand

No control on raw material prices as product is agro

based

Weakness

Comparatively less brand awareness

Expansion into premium segments and global

markets

Tie- up with restaurants and hotels

Strong industry portfolio

High growth prospects in the edible oil industry

Control over the price fluctuations

Ruchi Soya has recently teamed up with Japanese

multinational

Kagome

and

Mitsui

to

enter

processed tomato business in India.

Joint venture with J-Oil Mills and Toyota Tsusho

Corporation to launch products like functional
healthy cooking oils in India.

Joint venture with a Canadian Research company

to offer high yielding soya seed varieties in India

Opportunity
Threats

New initiatives like palm plantation and renewable

energy sources

Food market rules and regulations

Entry of more domestic and international players

Foreign incidents likely to impact the sunflower oil

market

Rupee depreciation against foreign currencies has

a negative impact on the oil import trading

COMPETITION

K S E Ltd.

Agro Tech Foods

Vimal Oil & Foods Ltd.

Vijay Solvex Ltd.

Anil Modi Oil Industries Ltd.

Gujarat Ambuja Exports Ltd.

Tirupati Industries (India) Ltd.

Gokul Refoils

Sanwaria Agro

Ruchinfra

Anik Industries

Rasoya protein

Raj Oil Mills

AVT Natural Products Ltd.

Natraj Proteins Ltd.

Indian Extractions Ltd.

NUTRELA
Nutrela was launched by Ruchi Soya Industries. Ruchi is the market leader in
the soya food segment with the Nutrela brand having more than a 50
percent market share. The company was initially interested in soya oil
extraction with soya meal as a by-product. The company identified soya meal
as a protein rich food at low cost in India.

PRODUCTS
Nutrela soya chunks, granules and mini chinks
Nutrela, one of the most trusted, 100 % vegetarian Soya food brand in the
country, offers Soya granules, chunks and mini chunks, which are full of
nutrition and are also easy to prepare. Nutrela has enjoyed the trust of its
consumers, both in India and overseas, for more than 25 years and continues
to expand its range to give more offerings to the consumers.
Nutrela mustard oil
It is made from the first press of finest quality of mustard seeds. Containing
Omega-3 and Omega-6 it provides health benefits like, Helps avoid Coronary
Heart Diseases, Helps Digestion and Blood Circulation, Improves Immune
System.
Nutrela soyabean oil
It is the number one low absorption refined Soyabean Oil in India. It also
contains natural plant sterols that helps in reducing cholesterol. It lasts 5
times more than regular Soyabean Oil and is enriched with Vitamins A, D & E.
Food cooked with Nutrela Soyabean Oil is 25% less oily. It gives health
benefits like, Healthy for Heart, Low absorption will lead to lower oil Intake.
Low Absorb Soyabean Oil is available in: 500 ml pouch, 1L bottle, 1L pouch, 5
L Jar, 15 L Jar. Health Benefits provided are: up to 25% Lighter, less Oil per
serving.
Nutrela sunflower oil
It is the number one low absorption refined Sunflower Oil in the country, and
is enriched with Vitamins A, D & E. It lasts 3 times more than regular
Sunflower Oil and is 25% less oily when food is cooked in it. Health benefits it
produces are: Up to 25% Low Absorption, Up to 25% Lighter, Less Oil per
Serving, Contains Plant Sterols that Reduce Cholesterol. Low Absorb

Sunflower Oil is available in: 500 ml pouch, 1L bottle, 1L pouch, 5L Jar, 15 L

Jar.
PROJECT OBJECTIVE
To study the effectiveness of distribution channel of Nutrela products (soya
chinks and oil) in Manipal and Udupi region
SCOPE AND LIMITATIONS
Our research is limited to the distribution channel of Nutrela Oil and Soya
Chunks in Manipal and Udupi region.
METHODOLOGY
The research work is being carried out in three phases. The same are
described below.
Phase 1
Secondary research:
Literature Review, personal interview. Other information was collected from
the websites and news-papers.
Phase 2
Primary research:

Design a questionnaire from the parameters collected through

secondary research.

Discussion with distributors of Nutrela products and retailers through a

structured questionnaire.

Phase 3:
Analysis of the findings and recommendations.
Discussion structure

Conduct an interview with the local retailers in Manipal /Udupi region.

In depth interview with the distributors of Nutrela products in

Manipal/Udupi.

Meeting: Collected data regarding the distributors profile, distribution terms

and policies, distribution processes. Further interviews to collect data
regarding the following: Revenue, Cost structure (Opex), capex, working
capital and channel ROI, redistribution resources and manpower, number of
outlets covered/beats/frequency of servicing. Any current problems faced by
distributor and any scope for improvements were also recorded through the
interviews.
INDIAN NUTRELA MARKET OVERVIEW
Ruchi Soya has entered the ready-to-cook (RTC) category under its flagship
brand Nutrela. The new products launched would include Nutrela Instant
Soya and Nutrela Ready Mixes. It is planning a 10% market share in this
segment by 2019.
Sunflower oil market in India has been growing at a fast pace owing to the
high growth of income levels, increasing trend towards spending, better
living standards and growing health consciousness among Indian consumers.
The current sunflower oil market in India is over INR 180 Billion of which
South India is the major contributor (almost 70%). This trend is expected to
grow with a CAGR of around 9.5% during 2013-14 to 2016-17.

REFERENCES
[Link]
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Nutrela Distribution Channel Analysis

The companies policies towards recruiting of a new distributor depends on
the size of the region they service and no. of retail outlets or wholesalers
they distribute to. In tier 2 and tier 3 cities, the company has the same
distributor for both the products- soya chunks and oil products.
In the financial year 2014-15, Ruchi group added 283 new distributors for
their products. Any distributor is required to do the following
Meet sales targets

Promoting new products and any special deals of Ruchi Soya and oil

products to his customers

Advising customers about delivery schedules and after-sales service
Record orders and sending details to the sales office
Giving feedback on sales trends

When recruiting a new distributor the company looks at the distributors

financial status, capacity to maintain a large inventory of diverse product
lines. Any new distributor should place a deposit of Rs. 2 lakhs in tier 2 or 3
cities. The deposit amount depends on the size and the no. of outlets they
service. The deposit has to be made to the company through cheque.

Distributor Profile
The distributor is presently designated the position of Sales officer of Ruchi
Soya industries. He has been the distributor for the company for more than 8
years.

He is the Sole distributor for all the product lines under Ruchi Soya industries
in the Udupi and Manipal region. Distributes brand such as Nutrela, Ruchi
Gold, Sunrich .The distributor has access to oil refining, vanaspati and soya
manufacturing facility located in Mangalore. All the manufacturing facilities
are located close to the post and Mangalore has easy access to port. So the
distributor is able to service his customers (retailers as well as wholesalers)
in quick time as the product is manufactured locally as well as they have a
warehouse facility in Udupi for oil products and C&F for soya products in
Hubli,Karnataka.
The total turnover of the distributor is around Rs. 23 lakhs per month. Major
share of this revenue is through their edible oil segment. Ruchi Soya earns
revenue of Rs. 3 lakhs per month and edible oil earns revenue of Rs 20 lakhs
per month. In edible oil segment,

turnover

ruchi soya; 13%

edible oil; 87%

Region-The distributor services only retailers as well as wholesalers and there

is no direct distribution to any institutes. The distributors spread of area is in
Udupi district from Kota to Udupi (hejbhettu) .This includes Manipal area.
Total no. of retailer and wholesalers the distributor services is around 450.
Mode of operation-He is in involved with only business to business selling,
there is no direct selling to the consumers. Even the company does not have
any tie ups with other business which are functioning as service providers

such as educational institutes, hospital etc. There is a huge scope for growth
for the distributor in this segment, especially in Manipal region.
Product stock- The distributor keeps one weeks stocks in the warehouse.
Around 150 cases of oil and 15 boxes of soya chunk are the weekly
requirement which will be kept in the warehouse.
The various brand and their SKUs is shown in the picture below

The various SKU under each edible oil category as well as soya products are
mentioned below
The premium high quality sunflower oil is offered in 500 ml, 1 litre,
5 litre and 15 litre and 15 Kg. packs.

Soyabean oil Available in 500 ml, 1lt, 5 litre and 15 litre and
15 Kg. packs. Filtered groundnut oil Available in 1 Litre. & 5
Litre. And 15 Litre and 15 Kg

The Palmolein oil is offered in 200 ml, 500 ml, 1 litre, 5 litre and 15
litre and 15 Kg. packs.

A value for money mustard oil brand from Ruchi, available in 200
ml, 500ml, 1 litre, 15 litre.

Low Absorb Soyabean Oil is available in:

500 ml pouch, 1L bottle, 1L pouch, 5 L Jar, 15 L Jar.
Low Absorb Sunflower Oil is available in:
500 ml pouch,
Healthy Kacchi Ghani Mustard Oil is Available in the
following sizes:
200 ml bottle, 500 ml bottle, 1 lt bottle, 1 lt pouch, 5L Jar.1L bottle,
1L pouch, 5L Jar, 15 L Jar .

Available in 3 forms
Chunks : 75 gms, 100 gms, 200 gms and 1 kg packs
Granules : 200 gms and 1 kg packs
Mini chunks :75 gms, 200 gms pack

Total of 2500 cases of edible oil and 60 cases of soya chunks are distributed
every month by this distributor. 2500 cases amount to 25 tonne of oil.
Around 500 cases out of the total 2500 cases oil are for mustard oil.
Sunflower oil is the most sold product whereas the demand for mustard oil is
comparatively less in Udupi and Manipal region .It sells more in eastern part
of India.
Each case consists of around 12 boxes. So the total SKU of oil sold is 30,000
whereas the total SKU of soya product sold is around 720 boxes per month.
Most selling product is 1 litre pouch in edible oil segment. 200 gm. and 90
gm. is the most selling SKU in soya products.

Other business interest/Future Plans The distributor is mainly involved in

ruche group products .In future, he plans to expand his presence in both
Udupi as well as in Mangalore by scaling up the infrastructure and improving
the warehouse facility. The distributor is interested in servicing the education
institutes directly, especially in Manipal region as presently all the institutes
are having business with major retail outlets present ion Manipal.
Distribution Structure
The various channel member in ruche Soya industries channel. The company
does not have any stockist/super stockist. The distributor get the products
delivered to him from manufacturing facility located closest to him. All oil
manufacturing facilities are located near ports. The company has 2-3
distributor in Mangalore region and 1 distributor in Udupi district. This is
dependent on the size of order they place with the company.

warehous
e,

distributo
r

retailer/
wholesale
rs

end
customer

Location of factory/production unit - The Company has extensive distribution

reach in PAN India. It has strategically located manufacturing facilities
striking the right balance between proximity to raw materials (cultivating
states and ports) and proximity to markets, with an aggregate daily crushing
capacity of 13,694 MT of oilseeds and aggregate refining capacity of 7,570
MT of oil.
It has Manufacturing facilities across 19 locations in India, giving access to
markets across India.

92 company depots (with storage and other logistical facilities) which

serve 4,230 distributors across the country reaching 510,000 retail

outlets
All refining plants located near ports, providing easier access to
imported edible oil Distribution through pipes at ports saves
transport cost and time. Mangalore is one such location which has
access to port and hence there is a manufacturing facility for
vanaspati, soya product and refining of oil here.

Hence the distributor requires one day booking by the retail

stores/wholesalers which are located urban, semi urban depending on their
order size. If the retail outlet/wholesalers make a onetime bill of Rs. 5000
then the distributor delivers to them the next day after making the order.
Also these outlets need to be present in urban or semi urban area. For
outlets located in rural areas order is delivered a week after the order is
made .If the order size is small enough to be delivered in a bike ,then they
deliver to the outlets located in rural areas in 2-3 days.
The stocks despatched is flexible as there is no fixed time or the quantity and
depends in the retailers. Oil market is a daily market and it fluctuates by Rs.
1 or Rs. 2 on a daily basis. So the distributor visits all major outlets once a
week to collect any order or collect payments. So, the retailer is charged the
price for that particular day and hence the rate of oil varies on every order
whereas the soya chunks rate remains almost fixed.
The distributor visits retail outlets in rural areas once a month, to inform him
about the latest oil price and also to collect any orders.

Product margin and turnover:

On an average, the distributor makes a margin of 5% and the Retailer margin
is 10 % on oil products. In soya products retailers makes a margin of 15%. In

a month around 18 tonne of sunflower oil is distributed by him towards

retailers and wholesalers. This amounts to around 1800 cases. Mustard oil is
5 tonne, i.e., 500 cases and soya products is 2 tonnes.

product cases sold

sunflower oil

mustard oil

other oil products

8%
20%

72%

Financial and other Support from Ruchi Soya Industries:

The company sometimes offers promotional activity to push their products. If
a distributor placed an order for 500 cases, then 25 cases will be provided for
free. The distributor can then pass on this incentive to his retailers
depending upon the order they place with the distributor.
Also the distributor is charged daily rate for the oil products, and sometimes
there is a certain percentage of discount offered when distributor places an
order for bulk profit.
Oil products sell more during summer season and there is a minute decrease
in the demand for oil products during winter. Hence it is a very seasonal
product. Also, the demand for different oil product varies across all the states
with eastern region having a much higher demand for mustard oil in eastern

India such as west Bengal, Orissa than in southern Indian states. Hence the
demand for mustard oil in Udupi district is low.

Market operation
The market operation of a distributor enlists all the functions that he has to perform
as a part of his duties and responsibilities. In the case of our product the distribution
channel is as follows: - First the company keeps the goods in its warehouse from
where the product is taken by the distributor to supply it to the retailers and
wholesalers. Nutrela doesnt has any stockist or super stockist deployed for its
distribution. While having a personal interview with the distributor of nutrela,
following aspects of market operation carried out by him were noted down.

1. Order booking or ready stock

The distributor books the order given by retailer and supplies the good on a
weekly basis. In urban area, order booking by the retailer has to be done one
prior to the delivery date whereas in rural areas retailers need to book 2 or 3
days in advance for an on-time delivery. In both regions if the quantity
demanded is less, then the distribution is carried on a two wheeler otherwise
a car is deployed. This is done to ensure cost effectiveness.
2. Number of retailers by outlet type/classification
Currently the distributor serves to only retailers and wholesellers. The total
number is around 450 retailers and wholesellers. They do not supply to the
institutions as of now.
3. Indicative sales dispersion across different outlet type/class
Distributors most of the sales comes from supplying the goods to the
retailers. From retailers alone the sales is around 70 80% while remaining
coming from the wholesellers.
4. Market coverage servicing frequency and process backward from
warehouse and forward to retailers
The distributor covers the wide-ranging area from Kota to Udupi Manipal
region covering around 30 Kms in the state. Distributor supplies once a week
to its customers. The process followed by him is that first the company keeps
the goods in its warehouse from where the product is taken by the distributor
to supply it to the retailers and wholesalers.

Market development
Market development are the activities carried out by both the retailers and the
distributors in order to push the products into the market. This is also done by

providing certain schemes/incentives or offers by the company itself to maintain

good working terms with the distributor.
Currently if the product is near expiry (i.e. 1 month) then company takes back the
product without any charge to retailers. If more than 2 3 months then they push the
retailers to sell the products, if the product still remains then they take it back when
it nears expiry.
Also at times the company offers promotions like providing free 25 cases to the
retailers on the order amount of more than ------------ cases.
No events or programs are being conducted as of now both from the companys
side as well as from the retailers side.

Customer segments
The distributor is involved in B2B Sales. His monthly target is 18 ton (1800 cases)
for sunflower oil and 2 ton for soya chunks. Each case has 12 boxes. Currently the
sales dispersion of the two products is as follows:1. Sunflower oil 20 lakhs/month
2. Soya chunks 3 lakhs/month
Currently following are the different SKUs supplies by the distributor.
3. Sunflower Oil - In measures of 5 litter, 1 litter and 1/2 litter. Among these 1
litter package sells the most.
4. Soya products In measures of 1 kg, 500 gm, 200 gm and 90 gm pouch.
Among these 200 gm and 90 gm sells the most.