This is how Ching's Secret owner Capital Foods is spicing up the 'Desi Chinese' foods market

The company behind Bigg Boss’s favourite chutney dominates Ching's Schezwan Chutney market with 90% share, eyes expansion into spice and noodles.

Over the past few months, a string of prominent companies, including Nestle, ITC, Hindustan Unilever, and Tata Consumer Products, have expressed keen interest in the Mumbai-based enterprise, Capital Foods. 

According to media reports, Nestle India Ltd and ITC Ltd, major players in the food industry, have emerged as the frontrunners in the competition to acquire Capital Foods. The potential deal could assign a valuation of Rs 4,000 crore to Rs 5,000 crore to the producer of renowned brands like Ching’s Secret and Smith & Jones.

Why do some of the largest food companies in the world have an appetite for a local producer of sauces and noodles?

The two cornerstone brands within Capital Foods' portfolio are Ching's Secret and Smith & Jones. Ching's Secret is dedicated to crafting chutneys, instant soups, Chinese spices, sauces, and noodles that cater specifically to the 'Indian Chinese' culinary style. On the other hand, Smith & Jones specialises in offerings like pasta mix, pizza ketchup, and cooking pastes.

"Schezwan became a hit, as it was something completely fresh and new in the market. Many noodle brands existed before, but the market was chaotic and disorganised. Schezwan introduced a new flavour that people hadn't experienced before- 'Desi Chinese'. Ching's started with this fresh food category, especially the popular Schezwan chutney. This taste became a big success," says Digbijoy Chakraborty, general manager, marketing, Capital Foods.

The task of creating something universally appealing is formidable, requiring a fusion of ideas, astute marketing, and external influences. However, Ching's has succeeded by finding a gap in the market.

"In India, chutney is a key part of our food culture. Ching's connection with chutney made it stand out. Even though sauces existed, the new Schezwan flavour made Ching's grow quickly in just 10-11 years. Now, it's almost as big as the second-largest ketchup brand in India," he adds.

As per a report by Mint, based on Capital Foods' recent disclosure to the Registrar of Companies, the company recorded a revenue of Rs 580 crore in the fiscal year 2022. This figure reflects a decrease of 14% compared to the previous year.

Competitive edge

While Ching's was pioneering a new category, numerous start-ups and national brands began imitating both its flavour and name. However, what strategies is Capital Foods employing to sustain its competitive advantage?

"We've maintained around 90% of the market share in this category for quite some time," he states.

The primary objective of the brand is to ensure the accessibility of Ching's Schezwan chutney for anyone seeking it. Chakraborty also adds that quality is paramount. "We conduct blind trials, extensive research, and never assume anything. In a competitive landscape where every company is striving to innovate, we are committed to maintaining our high standards. The Schezwan chutney we provide is the closest you'll get to authentic Schezwan chutney in the country."

Additionally, Capital Foods holds a trademark registration safeguarding the term 'Schezwan Chutney' for its brand, Ching's Secret. The company has fought and won cases against other entities that used the 'Schezwan Chutney' title for their products. The nomenclature is extremely crucial to Ching's Secret as it reflects its 'Desi Chinese' proposition. That is, the 'Chutney' brings the 'Desi' touch to the condiment.

Also Read: Why 'chutney' is key to Ching's Secret’s recipe for success

Consumer base

Speaking on expanding from its strong consumer base in western and central India, Chakraborty says, "Our journey began, mainly catering to the Western Indian markets, particularly Maharashtra and Gujarat. Gradually, we expanded to Delhi, UP, Bihar, MP, and Bangalore. However, our presence in the Southern markets like Hyderabad and Tamil Nadu has been limited due to our focus on other regions and distribution strategies. But things are changing. We've established a dedicated team to drive distribution across the board. Our prime focus will now be to drive availability and distribution across."

He adds, "This shift is informed by the realisation that everyone in India enjoys desi Chinese cuisine. While the potential is evident, it's essential to invest in ensuring that availability matches the demand, which wasn't the case earlier. In essence, we're evolving our approach to match the evolving tastes and demands of the Indian market."

Recently, to celebrate its 25th anniversary, the company has introduced three innovative products that enhance Indian flavours These include Ching's Secret Dragon Fire Chutney, Ching's Secret Sriracha Green Chilli Sauce, and Ching's Secret Jain Schezwan Chutney.

Marketing efforts

The brand has initiated brand marketing campaigns, collaborating with celebrities like Bollywood’s Rohit Shetty and Ranveer Singh. The latter featured in the campaign video 'Made in India,' continuing the ‘Ranveer Ching’ brand ad series, while Shetty contributed to the campaign for Smith & Jones Pasta Masala.

Guided by Ajay Gupta, managing director, Capital Foods Limited, the brand has launched popular campaigns like 'Desi Chinese Humara Hai' and 'Pasta Masala Ka Blockbuster.' Shetty also appears as the face of Smith & Jones Pasta Masala in the third campaign.

Out of the total budget, the brand allocates 70% to advertising efforts. The highest chunk, over 50%, is allotted to TV advertising, followed by outdoor, print, and then digital advertising.

As per Chakraborty, the brand’s A&M spending is slated to increase by almost 15% in this fiscal.

"Our focus will increase tapping newer media avenues like OTT and with sustained impetus in market-specific advertising and communication inputs in the form of print, outdoor and consumer engagement activities," he explains.

He goes on to add, "The performance in the e-commerce sphere isn't as strong, as we don't believe in discounts. Our business largely revolves around physical retail outlets. The primary revenue stream from consumer purchases predominantly comes from general trade establishments."

Recognising the shifting trends, the brand has ventured into the realm of OTT platforms. This decision is rooted in the understanding that urban audiences are increasingly transitioning from TV to OTT platforms.

"We acknowledge the need to engage with this consumer base across all channels, prompting our foray into OTT. Moreover, the dynamics of consumer integration on OTT are akin to those on TV," he asserts.

Over the last four seasons, the brand has maintained a consistent presence in the kitchen of the Bigg Boss house.

"We were the first to do in-show integration with Big Boss. The reason Bigg Boss is a great fit for us is because it has a cult following, which spans various income segments and demographics. One major benefit we gain from Bigg Boss is its strong audience engagement. When we engage with the show, we not only connect with dedicated followers in India but also extend our reach to an international audience," shares Chakraborty.

Reality shows often have their own unique themes and audiences. How did the brand ensure that the collaborations align with its brand values and resonate with its target customers?

"We constantly strive to align with our target market's age bracket when considering shows to associate with. Our approach is to be innovative and select shows that are both innovative and appeal to a wide audience, rather than being niche. While people are familiar with Ching's, these shows provide us with an opportunity to present our diverse portfolio to a broader and varied audience," he explains.

For more than 10 years, the brand has teamed up with shows like Bigg Boss and Khatro ke Khiladi. Every year, the brand has been growing by over 20%. Further, speaking about the expansion plans, Chakraborty notes that the chutney category in India is expanding and consequently, the brand's role in the chutney category will expand as well.

"There is a tremendous scope in the country from an individual point of view. Moreover, our play in the spice and noodles categories will also increase," he asserts.