The Rise of Act II
Today, Act II is synonymous to popcorn in India. Who makes it? How did it find its way into our country, and then into our hearts?
After becoming the blockbuster star at the movie-theatres, it was now time for popcorn to charm the masses by becoming the girl-next-door.
You can binge listen to the journey of popcorn here (Part I and Part II)
Quick recap: Last week, we explained how movie theatres and popcorns were meant-to-be. Today, we present Act II (pun intended) to you.
A person was now no longer required to go out for the lip-smacking delight. They could now be touched by the heavenly taste of popcorn from the comfort of their couches.
But, what’s a star without any theatricals, without any tantrums, without any drama. How did it manage to charm the world-over?
ReadOn.
It all began with an accident.
In the year 1945, on a perfectly normal day, a certain Mr. Percy Spencer was standing in front of an active magnetron, a machine, emitting high radio waves (no, he did not have any strange hobbies, just his job). He noticed that a chocolate bar in his pocket had started melting!
Now, it is said that curiosity kills a cat. But in our case, curiosity popped a popcorn kernel. Thus, both, microwave and microwave popcorn were invented and patented by Mr. Spencer. But, Mr. Spencer wouldn’t live to see the meteoric rise of his inventions. Both the products required more rework to become a commercial hit.
And then, popcorn exploded. And how! By 1986, New York was consuming approximately $250 mn worth of popcorn. Five brands were leading the trend. This was Act I (pun intended) in the history of microwave popcorn. But, these offerings had real dairy products and had to be refrigerated. So, popcorn didn’t really gain the traction that it deserved, and still had a long way to go.
Now, if Act I does not succeed, what follows?
Act II, the non-refrigerated, shelf-stable product by Golden Valley Microwave Foods. The company was acquired in 1991 by ConAgra Foods Inc. In 1999, it became the largest manufacturer of microwave popcorn in the world.
It was in 1997, when ConAgra Foods Inc made its grand entry in the Indian subcontinent, by acquiring majority stakes in the edible oil producing company, Agro Tech Foods Ltd.
ACT II stormed the unexplored popcorn space in India and catered to the large middle-class families. The company realised that unlike American houses, microwaves were still finding their place in Indian households. ACT II was then rebranded and packaged as pressure cooker-friendly popcorn. The Indians welcomed this new product with open arms. And this is how, over the years, popcorn became synonymous with Act II in India.
As much as Act II commands an important position in our hearts (read: taste buds), it is of great strategic importance to Agro Tech Foods Ltd. too. The company derives 69% of its revenue and 60% of its Gross Margins from its Edible Oil business. This concentration of business in one sector is a big threat to the company. And, it’s looking to dilute this threat by diversifying further in the food business. This strategy is also in line with the consumers’ evolving preferences.
How?
You see how you have to wait for 3-5 minutes to make popcorn? Isn’t this too long for the instant gratification seeking soul? And, what if you want to snack while travelling?
Thus, Act II introduced ‘ready to eat’ popcorn.
And, not just ready to eat popcorn. It added nachos, peanut butter, chocolate spread, and so much more to cater to the evolving taste buds. The company also has the arms and ammunition to be able to pull off its grand dream of being among the top food business brands in the country.
But, do you think popcorn still has the charm that it had over a century ago? Or, just like Act II is moving on to other acts, will consumers also change their preferences?
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