Putting The Fizz Back Into The Bottle
Revamping a brand could mean several things for several organisations. Essentially, creating a new identity using all the right ingredients — technological inputs, scaling presence, improving sales and distribution network — is key here. Revamping ensures the core is the same, however, the narration of the story and the way it is communicated to the world is different. With an aim to promote high level of belongingness and pride among channel partners, suppliers and employees, the new generation leadership of Parle Agro, Schauna, Alisha and Nadia Chauhan, under their father Prakash Chauhan’s guidance, has planned to revamp their corporate identity, which aims to be more aspirational. The re-branding activity, set to complete by end of 2017, prepares Parle Agro to step into its next phase of growth by underlining the brand attributes and core values to all stakeholders. This unified identity sets the stage for Parle Agro to build on its goal of becoming a Rs 10,000 crore company by 2022.
‘Parle’ a brand that captured the taste and appeal of millions of Indians across generations, probably does not need any introduction. Parle Agro has a tremendous history to the name ‘Parle,’ founded by late Jayantilal Chauhan who is fondly known as the father of soft drinks. In the 1980s, the company was formally diversified into Parle Products, Parle Agro and Parle Bisleri. Parle Agro, formed under the leadership of Prakash Chauhan, is now a Rs 3,000-crore organisation and steadily growing at a double digit rate catering to more than 12 lakh outlets in the country.
Innovation, The Thirst Quencher
Parle Agro started off as a single brand organisation and, in the last 30 years, it has spread into multiple categories and brands across the consumption pyramid. Today, with a plethora of brands in its portfolio, it aims at knitting it all together under the equity of the name Parle Agro.
While Nadia, the youngest of the sisters, is looking after the marketing and branding sections, Schauna, the older one, is in charge of overall operations and Alisha, is focused on the group’s CSR activities. “Parle Agro has primarily been a brand-led company in terms of communication, with our brands taking centrestage. While this approach to communications has worked successfully for us, we now want to focus on our corporate brand,” says Nadia, Joint MD & CMO, Parle Agro.
Parle Agro not only created the category of fruit plus fizz drinks but has also been a successful player in the category. It was the first to introduce tetra pak technology in the country and also the first beverage company to launch India’s first apple nectar, Appy. They further highlighted their innovative mindset with the launch of Appy Fizz, India’s first sparkling apple juice-based drink and recently, Frooti Fizz (mango juice-based fizzy drink).
There is a tremendous shift in the mind and purchase pattern of the Indian consumers today, where they are willing to try innovative products and brand experiences in the largely fragmented beverages market. With more number consumers increasingly moving away from synthetic drinks and going in for fruit-based natural products, Parle Agro sees a lot of potential in fruit-based drinks in the fizz category.
Innovation as a legacy has been key to the growth of brands launched by Parle Agro. For Prakash J. Chauhan, innovation has always been at the heart of the enterprise, as the CMD, Parle Agro, Chauhan senior has believed in keeping with the trends. “Our understanding of the Indian consumer and innovative business practices has led us to establish trends that have changed industry outlook and approach,” he says. For instance, at a time when the market was dominated with primarily, two-way packaging and plastic pouches, Chauhan felt that the introduction of a new packaging format had a massive opportunity, especially within the mango drink category that they were building at that time. This is when they launched Frooti in a tetra pak and began the journey of Parle Agro.
That’s not all. The company then introduced the category of fruit juice plus fizz drinks in 2005 with the launch of Appy Fizz. And now, their most recent launch Frooti Fizz, expands the sparkling fruit-based beverage category that they created almost a decade ago, and continues to hold dominance in Frooti Fizz, launched in March, is a unique combination of real mango juice and fizz. It was specifically launched to build market share within the mango flavoured beverage space. Mango, as a flavour, contributes to more than 90 per cent of the fruit flavoured still drinks (FFSD) category and this dominance of a single flavour shows enormous potential for Frooti Fizz. “Since its launch, we have seen a positive response towards Frooti Fizz because it gives an experience of aerated drink with natural fruit content to the consumer,” says Nadia.
Consumers prefer a natural fruit-based sparkling drink rather than a synthetic sweetened carbonated water drink. Within just four months of its launch, it reached 5 lakh outlets, which almost equals the Appy Fizz outlets, according to Nadia. “With this launch, we are talking to not just the mango consumer but a much larger audience, including all kinds of synthetic drinkers looking at healthier alternatives,” she adds.
So why is Parle Agro entering the fizz business at a time others are looking at disassociating themselves with fizz-based drinks? Says Nadia: “We are not a synthetic carbonated drink, hence you cannot compare the two products. We are a fruit-based drink with mild fizz added in to enhance the refreshment effect. The current range of carbonated products is only synthetic based products.”
Even today, after a decade, Appy Fizz holds more than 90 per cent market share. According to Nadia, it has the potential to become a Rs 4,000 crore category in the near future, which led to this year seeing the launch of Frooti Fizz.
With Café Cuba, Parle Agro created the coffee-based carbonated segment in India and thanks to its strong and differentiated flavour, it was able to create a place of its own. “We revised our distribution strategy for Café Cuba, focusing on on-premise consumption targeted towards the new age consumers. We continue to receive positive feedback for the brand within Indian consumers as well as in international markets to which we export,” says Nadia.
Repeating Frooti’s Success
Despite all the new launches, the question is, will the company be able to repeat its success with other products like it did with Frooti? “Frooti is an iconic brand, very difficult that same kind of success can be repeated elsewhere,” says Amnish Aggarwal, Research Analyst, Prabhudas Lilladher.
Still, the top leadership team is leaving no stone unturned in the revamping exercise to make each product as successful as Frooti. For instance, the company is embracing a new approach to increase its presence in India as well as overseas. “As part of our expansion plan, we have recently opened doors to our new state-of-the-art plant in Sitarganj, Uttarakhand,” says Schauna Chauhan, CEO, Parle Agro. “Very soon, we will be setting up another plant in Karnataka to strengthen our presence in the South,” she adds. Its new, robust sales and distribution network is playing a big role in scaling the penetration across the Indian geography.
The company is also building facilities across the country designed with the best process flow for manufacturing. “We are also focusing on simplifying the business with the use of automation. For example, our Sitarganj plant has a fully automated system with robotic material handling, which requires minimal manual intervention. Our world class processing equipment that uses environment-friendly fuel and are recognised by GMP and ISO standards not only accelerate the operations, but also reduce errors to a great extent,” adds Schauna. The adaption of such technology is expected to amplify its manufacturing capacity, increase the overall production output by 40 per cent.
Other revamping tools such as the brand campaigns, too, validates the idea that other brands under the company too could match Frooti’s popularity. “Parle Agro is our first client in the Indian market. Nadia reached out to us to do the brand campaign for Frooti several years ago and after that for Appy Fizz, another campaign for Frooti and recently, Frooti Fizz,” says Jessica Walsh, Partner, Sagmeister & Walsh, a New York-based design agency about her experience while working with Parle Agro team for the branding exercise. “The Parle team is decisive and opinionated but in the best way possible. They have great instincts about what will work well in the market” points out Walsh.
Says Harish Shriyan, COO, Omnicom Media Group India, “We have been associated with Parle Agro for many years not just from OMD but with our previous agency as well.” Shriyan attributes the phenomenal success of Parle Agro to the strong management and their focus on innovative products and new categories, aided with a good distribution network. “It has been a great partnership and so well synced because they are always well planned and are always willing to take risks and put out innovative work and are usually the one pushing it further,” says Shriyan.
The Road Ahead
Achieving Rs 10,000 crore turnover by 2022 is an uphill task, but the Chauhan sisters have the road map ready. For any organisation that operates in our category — sales and distribution (S&D) is one of the most critical drivers of success. Over the last decade, the focus has been on creating a world class S&D system, to deliver within this dynamic and competitive market environment. The company is employing various initiatives into S&D infrastructure that is helping them build an organisation-wide system capable of handling and continuously delivering on their long-term objectives.
They have recently collaborated with The Boston Consulting Group to initiate the second leg of their S&D revamp. “We have taken steps to make our sales and distribution stronger for it to become the backbone for driving our business and growth. We are capitalising on two critical areas, reach and extraction. These will focus on increasing our distribution by driving differentiated GTM (go-to-market) strategy while ensuring optimisation of sales force manpower,” says Nadia.
The company has also taken a large growth initiative for their packaged drinking water (PDW) brand, Bailley, which competes with Parle’s Bisleri, the market leader in the segment. PDW is one of the largest and fastest growing categories in the F&B industry in India. It is projected to become a Rs 16,000 crore industry by 2018 riding on a CAGR of 22 per cent and there is no better time to take this programme head on. Parle Agro’s aim is to achieve the vision of making Bailley grow three times in the next three years.
“These initiatives are driven towards attaining our vision of becoming the No. 1 beverage player in India and a Rs 10,000 crore organisation by 2022,” says Nadia.
