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This is an abridged version of the case The Indian Kitchen Salt Market - Brand Wars." Case Studies are
intended to be used as a basis for class discussion rather than to illustrate either effective or ineffective
handling of a management situation.



CLMM- 026

Branding Commodity Product Indian Salt Industry
Salt, once a commodity product, has now become an FMCG product with top
business groups launching branded salt products with heavy promotions and unique
positioning. At the end of the year 2000, the branded salt market had as many as
seven players vying for consumer mind-space and a market share.
The salt market in India can be broadly classified into the branded and unbranded
sectors. In the 1980s, the Indian salt market (both organized and unorganized) was
estimated to be about 5 million tonnes per annum and was valued at Rs 5 billion. Salt
penetration in India is estimated to be 93.8% (96.8% in urban areas and 92.7% in
rural areas). The highest salt penetration levels were in big towns (98-99%
penetration).
Till the early-1980s, most Indian households used either local brands of salt or
unprocessed/unrefined salt that was sold loose (not packaged). The product was
regarded as a commodity and the extent of user involvement in its purchase was
extremely low. As a result, no national-level corporate ventured into this segment.
However, one of Indias leading business houses, the Tatas, saw immense potential in
this market and decided to launch a national brand of kitchen salt.
The product was launched in August 1983, and the company positioned it as a salt
that was processed (cleared of all impurities) and refined, unlike loose salt.
Emphasizing the fact that it was the first packaged salt, Tata Salt highlighted the
issue of impurities in salt sold in the loose form or sold by local brands.
Branding Commodity Product Indian Salt Industry

2
The decision to enter the branded kitchen salt market paid off well and Tata Salt
became a runaway success. The fact that there were no other brands to compete with
at the national level helped Tata Salt a lot.
In 1991, DCW Home Products Ltd., launched its brand of salt under the name
Captain Cook. The unique selling proposition of the Captain Cook salt was its free
flow. Captain Cook was marketed through major advertisement campaigns, unlike
Tata salt whose advertising support was negligible. Humorous TV commercials for
Captain Cook emphasized the free flowing attribute of the brand, and compared it
with the sticky, messy salt used hitherto (the reference to Tata Salt was rather
evident). Thanks to Captain Cooks promotional efforts, customers actually began
regarding the free flowing attribute as an important one, much to Tata Salts
chagrin.
To counter Captain Cooks free flow campaign, Tata Salt launched a new campaign
with a tag line stating that Tata Salt was the saltier salt. The company advertised and
marketed it by showing that adding even a little Tata Salt to a dish was enough to get
a good taste, unlike the salt manufactured by other brands. It emphasized that a packet
of Tata Salt would last longer than those of other brands owing to its high salt
concentration. Apart from this, Tata Salt also included the free flow proposition in its
advertisements, although in a rather subtle manner.
While Tata Salt and Captain Cook fought it out in the market, HLL entered the fray
with its Annapurna salt brand in 1996. Annapurna was the first brand that was
positioned primarily on the health benefits platform. HLL highlighted the issue of
iodine content in the salt and claimed that it was higher in Annapurna than in other
brands. Analysts said that the fact that iodine content had not been used as a
positioning plank till then was rather surprising, since a large number of people from
developing countries such as India were found to be iodine deficient and iodized salt
was as an easy way to offer this essential nutrient to them. Adding the minimum
required level of iodine to salt was mandatory; a minimum of 15 parts per million of
iodine is required for trading in salt. However, the penetration of iodized salt in the
country was very low at 5%. Within a short period, the brand reached the second
position in the branded salt market.
Branding Commodity Product Indian Salt Industry


3
In the late 1990s, salt began losing its commodity status in the country at least in
urban India, which seemed to have taken to branded salt in a big way. Industry
watchers noted that the market was following the global trend of commodities
becoming brands as the markets for traditional brands reached saturation levels.
However, even they were not prepared for the frequency with which new brands
entered the segment in this phase. While there were only three brands in the market
between 1983 and the mid-1990s, the market saw the entry of five national-level
players in the late 1990s.
In January 1998, Dabur India Ltd., launched its salt under the brand Nutrasalt. Dabur
advertised Nutrasalt as a salt with low sodium content and positioned it on the health
platform.
In November 1998, Marico Industries, which owned the popular Parachute (hair oil)
and Saffola (cooking oil) brands, launched Saffola salt. Marico joined the Nutrasalt
category of premium salts by pricing Saffola salt at Rs 20 per kg. Saffola salt was
packaged in a reusable jar and was also positioned on the health platform, being
mineral enriched low sodium salt.
The launch of Nutrasalt and Saffola salt was viewed with skepticism by many
analysts, who said that the pricing strategies adopted by Dabur and Marico did not
make sense. They doubted whether consumers would pay Rs 20 for a kilo of salt
when Tata Salt, Annapurna and Captain Cook were available at Rs. 6, Rs. 6 and Rs. 7
respectively.
Another Indian FMCG major, Nirma, entered the salt market with its brand, Nirma
Shudh, in 2000. Nirma claimed that since the entire manufacturing process of Nirma
Shudh was free from human intervention right from the pumping of seawater to the
packaging of salt, it was of better quality.
Dandi salt was launched in October 2001 by the Kunvar Ajay Group of Industries
(KAG) and was positioned on the purity platform with the focus being on the fact that
it was triple refined. What set Dandi apart from other brands was the way KAG
promoted the brand. The company seemed to have been the first one to realize the
importance of frequent airing of short and strong advertisements to influence the
buying behavior of consumers for a low-involvement product category like salt. KAG
spent Rs 80 million on promoting Dandi and aired its commercials on almost all
major TV channels in the country.
Branding Commodity Product Indian Salt Industry


4
The next company to enter the market was Cargill India Ltd., in December 2001 with
the Naturefresh brand. Naturefresh was also positioned on the health platform the
difference being that the salt was enriched with calcium and magnesium along with
iodine. The company also claimed that its brand of salt was the most granular salt
available and was processed to remain free-flowing under all weather conditions.
Though Tata Salt and Annapurna were well-established brands, they could not afford
to turn a blind eye to the success of the new brands. Both Tata Salt and Annapurna
realized that in order to hold on to their market shares, they would have to put in
place measures to help their brands remain the salt of choice. Both Tata chemicals
and HLL decided to reposition and relaunch their brands towards this end.
HLL re-launched Annapurna Salt in 2001 with a new patented technology that
prevented the loss of iodine during all the stages storage, transportation and even
cooking. Given the concern for iodine intake in the country, the brand was expected
to benefit from this new salt processing technology. HLL also tied up with the
International Council for Control of Iodine Deficiency Disorders (ICCIDD), a
worldwide organization that educated people about the importance of iodine and the
adverse effects caused by its deficiency. Annapurna salt was the first brand in India to
have ICCIDD endorsement.
In late 2001 Tata Chemicals re-launched Tata Salt with a new advertisement
campaign that added a patriotic angle to the purity issue. The new advertisements,
released in August 2002, featured ordinary people performing their duties with
integrity and commitment and saying Maine desh ka namak khaya hai.
1
The
campaign was used to reassure Tata Salt users of the fact that by using a pure salt he
is a pure human being. The company also changed the packaging of the product,
making use of bold orange stripes in place of the earlier green stripes.

1
A phrase that literally means Ive eaten the nations salt. However, in India, its use is usually in the
context of showing loyalty to someone. A person who has consumed someones salt is seen as being
obligated towards the other person. Thus, the TVCs depicted Indians showing allegiance to their
country by performing their daily duties in an honest manner, thereby paying back their obligations of
having eaten the nations salt. Tata Salt acted as a metaphor in this context to evoke a purely
emotional response.
Branding Commodity Product Indian Salt Industry


5
Despite the fact that the number of players in the branded salt market had increased
by the end of the 1990s, 70% of the total market (17 million tonnes) remained in the
hands of the unorganized sector even at the end of 2002. Except for companies like
KAG, most of the organized sector players were FMCG giants with strong financial
and marketing backing, and even they were few in number. Though the market has
minimal production costs and entry barriers, not many seem to be willing to enter
the fray.

Questions for Discussion:
1. Analyze the evolution of the organized segment of the Indian salt market.
2. What marketing strategies did the big players adopt to transform a commodity
into a branded product?
3. What set Dandi apart from other brands was the way KAG promoted the brand.
Comment.

Additional Readings and References:
1. Narasimhan, S. Lakshmi. Marico Salt Rides Piggy-Back on Saffola.
www.domain-b.com. 31, January, 1999.
2. Captain Cook Atta not to be Relaunched. www.financialexpress.com.
17, September, 2001.
3. Chatterjee, Purvita. Will Dandi Steal a March? www.blonnet.com.
29, November, 2001.
4. Cargill Foods Launches NatureFresh Salt. www.responservice.com.
January 2002.
5. Bhushan, Ratna. Salts Sweet Success. www.blonnet.com. 20, June, 2002.
6. Bhatnagar, Mohini. Nirma Makes Mentative Efforts to Enter Premium End
Market. www.domain-b.com. 12, October, 2002.
7. Agarwal, Sujata. A Brand Worth Its Salt. www.tata.com. 02, December, 2002.
8. Chandran, Praveen. Thou Salt Sell More. www.domain-b.com.
09, August, 2002.
9. Shukla, Gouri & Jain, Shweta. Saying it With Salt. www.business-
standerd.com.