The Makhana Value Chain and the Fast Emergence of Branding in Food Retail : Evidence from Bihar (India)

Brands are rapidly emerging in food retail in Asia. However, it is not well understood what impact they have in these food markets. In a detailed case study of makhana in Bihar, one of the poorest states in India, we see the fast emergence - a doubling over five years leading to a share of 50% in total trade - of more expensive packaged and branded products. Two types of brands can be distinguished. Low-costs brands focus exclusively on attractive glossy packing with little consideration for quality. Investments, but profits as well, are small. The high-cost brands pay attention to quality beyond packing, invest in advertisements and promotion, explore options for value-addition, and employ specialized salesmen. We find that there are little direct benefits to the farmers from the emergence of these brands. However, farmers might benefit indirectly because of the expanding product demand