If the company survives the downturn, it will continue to focus more heavily on the sales of its spice, but it also needs to increase its revenue streams. In the past, the company has sold its spice to a number of Indian food chains, like Dabur, Hindustan Meats and Dabur Express, which are also gaining popularity in the US.
“Sales growth at Saffron have been encouraging. After the recession ended, sales declined by 2-3%, but the year after growth has accelerated to around 10% growth,” said an executive. With a strong sales trend, the company expects to reach its target of earning Rs 5,000 crore in the current fiscal (2016-17).
Saffron has been a big success story for the firm’s parent company. For years, the company faced repeated lawsuits by the country’s largest food and beverage firms over accusations of adulteration. At one point, it even declared bankruptcy. Saffron is one of the more successful Indian brands, and the company also faces the challenge of gaining a foothold in the US. A number of distributors in the US reportedly told them that the American market could be difficult to break into, and that if it wants to become a player in the US, it will have to look abroad first.
A number of US food and beverage firms have taken the plunge in recent months, with several US retailers, including TJ Maxx and Walmart, expanding their distribution base with local vendors. Others are expected to have a similar strategy for getting into the US market.
However, the US market is dominated by premium brands and small chains, and Saffron could find itself with a very difficult task to gain a foothold in the US. “Saffron is also facing competition from other spice firms,” the executive suggested. He did not think that the company could get its hands on top markets like the UK and the U.S., because the company tends to cater to small and independent shops that can be challenging to cross-sell, unlike the larger companies.
The brand has suffered setbacks in the past due to poor product quality and a lack of marketing in the past decade. Saffron’s CEO said that the company’s growth will depend mainly on the sales of its spice. “We have been growing for several decades and can continue growing at the same pace indefinitely,” he added.
Saffron has more pressing issues to deal with. To ensure an economic recovery, as a small firm,
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