Brand Amma's throwaway pricing

In 2001, J Jayalalitha, now in her third term as the chief minister of Tamil Nadu, had expressed a wish to act as a mother to all Tamils. Known as amma, which is Tamil for mother, amongst her supporters, she is rapidly expanding her brand into products that people come in contact almost daily, from canteens to mineral water.

The 'Amma' canteens (or Amma Unavagam) were launched in February, 2013. These sell piping hot idlis for breakfast at Re 1 and rice preparations such as curd, pongal and sambhar rice for Rs 3-5. The Chennai Corporation, which initiated these says it is incurring losses as the rates for these dishes in other eateries in Chennai range from Rs 25-45 for a plate of idlis, Rs 20-60 for pongal rice and Rs 20-80 for sambar rice and curd rice.

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The Chennai Corporation incurs a loss of Rs 5 lakh a day as the average daily expenses are around Rs 14 lakh and the average daily revenue is Rs 9 lakh. Corporation officials say the canteens in Chennai serve over 200,000 people a day.

However, the traction for such low-priced fare has ensured that these Amma canteens have spread out beyond Chennai - 90 canteens in Coimbatore, Vellore, Salem, Erode, Tirupur, Tiruchi, Tuticorin and Tirunelveli etc, in addition to the 200 Chennai ones. P Kuganantham, the city health officer, Chennai Corporation says it is now doubling the number of canteens in Chennai.

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"We would have invested Rs 5 to 6 lakh to set up one canteen. The income in the past eight months has crossed Rs 15 crore. So, expansion will be cost effective," says Kuganantham. The canteens are set to serve dinner with rotis (flatbread) expected to be priced at Rs 3.

The pricing has lent itself well to industrial and slum areas in the city such as Ambattur, Teynampet and Kodambakkam. The rock-bottom rates have even prompted other eateries to reconsider their pricing. The popular chain Saravana Bhavan has reduced prices of its idli and dosa. The Amma brand has also been extended to vegetable outlets opened under the Rs 100-crore price stabilisation fund.

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Around 31 outlets selling farm-fresh vegetables were opened in June, 2013 in Chennai and its suburbs, and its direct farm sourcing ensures prices that are 40 per cent less than market prices. The latest addition to the Amma brand has been mineral water launched under the Transport Department budget.

The State Express Transport Corporation through the Institute of Road Transport, a society under the aegis of the state government, had commissioned land and a water plant with a daily capacity of 3 lakh litres. A litre bottle is sold for Rs 10 in buses and bus-stops run by the SETC, cheaper than the Rs 15 mineral water bottle sold by the indian Railways and Rs 20 bottle by players like PepsiCo, Coca-Cola.

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Critics, however, are challenging the brand as being used by Jayalalithaa to spend public money for personal branding, while her supporters remind that the prices are a boon for the state's poor.

Some point out that the source of financing for the canteen's expansion has not been spelled out. While the jury is out, the brand Amma is cashing in on its popularity by dint of the subsidised rates.