Fauji Cereals, a company established in 1954, recently launched a media campaign for its ready-to-eat (RTE) breakfast cereals aimed at highlighting its improved and expanded range.

Fauji Cereals is part of the Fauji Foundation which owns a string of businesses, including Foundation Gas and Fauji Security Services and is associated with others such as Fauji Fertilizer and Fauji Cement.

The production of Fauji Cereals began in 1956 in collaboration with Quaker Oats (UK).

“Quaker Oats designed the building and imported the machinery from Scotland,” says Sultan Khalid Mahmud, General Manager, Fauji Cereals.

In 1962 the link with Quaker Oats was severed, because by then, says Khalid, “we could handle things on our own, although the foundation set by Quaker Oats still carries forward today.”

Fauji Cereals started off in the RTE breakfast cereals range with corn, wheat and rice flakes. Today, it has expanded into other variants as well as into the ready-to-cook range in the form of porridge. The company also produces desserts (mixes, custards and jellies, claiming a market share of approximately 30%) and has recently extended its portfolio to flour and grain.

However, it is in the breakfast cereal category that Fauji Cereals assumes market leadership with an 80% share in a category which according to Khalid is worth “two billion rupees”.

#### Health considerations are turning cereals into an appealing alternative to the traditional heavy (and oily) Pakistani breakfast. Add to this the changing lifestyle of the Pakistani housewife and the convenience of an RTE breakfast is more often than not likely to trump the time consuming preparation required for other breakfast options.

Within this category the competition is primarily foreign driven (Kellogg’s, Nestlé and Weetabix). Local competition, if any, comes in the form of Nutrivita, manufactured by Agroventures, although according to Khalid, Nutrivita has been unable to gain significant market share.

Yet, the growth opportunities are tremendous. For a start, health considerations are turning cereals into an appealing alternative to the traditional heavy (and oily) Pakistani breakfast. Add to this the changing lifestyle of the Pakistani housewife and the convenience of an RTE breakfast is more often than not likely to trump the time consuming preparation required for other breakfast options. Furthermore, cereals are gaining popularity as a snacking option, and parents are increasingly inclined to give their kids cereals as a snack rather than other less healthy impulse products. Moving with this trend, Fauji Cereals are now available in 20g and 30g sachets. The objective here, says Khalid, is to reposition Fauji as a breakfast cereal that also works as a healthy snacking alternative.

To take advantage of these growth opportunities, Fauji has upgraded its machinery (manufactured by Buhler Switzerland, one of the leading breakfast cereal plant manufacturing companies in the world), thereby enhancing its capability to manufacture different shaped cereals (bringing it up to par with foreign competitors). As a result, the company recently introduced five new RTE breakfast cereals; Bran Flakes aimed at health conscious consumers and Choco Cups, Choco Rings, Choco Stars and Frosted Flakes aimed at children.

Fauji has also revamped the other breakfast cereals in its range, by improving the product and “using better quality grains”. The packaging too has been upgraded “bringing it at par with the standard size of the international brands.”

As a result of these changes, Fauji Cereals launched a mass media campaign after a hiatus of over 10 years. (The last campaign was launched in 2001.) The new campaign, designed by M Communications, highlights three factors: best quality, best price and flavours khushion kay.

If, as Khalid maintains, “the quality of Fauji Cereals is comparable to the international brands,” price is clearly what gives Fauji the biggest edge over the competition (for example, Fauji corn flakes cost Rs 100 less than Kellogg’s). Other factors in Fauji’s favour are its nationwide distribution which reaches even in the smaller cities and the fact that it is halal. As a result Fauji is able to access a wider consumer segment, unlike foreign brands which are restricted to the upper segments.

With a range of new and improved products, Fauji Cereals now plan to extend their reach beyond Pakistan’s borders and cover Afghanistan, South and South East Asia (Bangladesh, Malaysia, Maldives and Sri Lanka), New Zealand and The Middle East (Bahrain, Dubai and Sharjah).

Back on the home front, the competition has not given up; Nestlé recently ran an adaptation of its international TVC while Weetabix has been advertising in print. As for Kellogg’s, although they do not advertise in Pakistan, their presence on Indian channels ensures a degree of penetration in Pakistan.

The challenge for Fauji, if the company is to further extend its market leadership, may lie in doing more to encourage a switch over from the traditional desi breakfast to the healthier and more convenient RTE cereal option.