From a leader in the non-carbonated beverages market with brands like Frooti and Appy, Parle Agro is now keen on becoming a leading fast-moving consumer goods (FMCG) company. Nadia Chauhan, director, Parle Agro, gives SAPNA AGARWAL and TUSHAR PAWAR a lowdown on the company’s progress and strategy since its restructuring in 2007. Excerpts:
With only 15 per cent of your revenue coming from confectionery and water, how do you plan to become a leading player in the FMCG segment?
Last year, we undertook the restructuring of our company into three segments — beverages, water and confectionery. We are adding more products to each of these segments and have plans to grow the water and confectionery segments aggressively as they have a smaller base as compared to the beverages segment.
We have also added more products in the beverages category and in the 100 per cent juice segment under the brand name of Saint last month. Over five years, we hope to grow from Rs 950 crore to Rs 3,500 crore as a result of the changes we make now.
How has the restructuring paid off?
As the market dynamics of the three segments are different from each other, the restructure has seen each individual segment post strong growth. For instance, between every two beverage outlets, there are at least 10 confectionery outlets.
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With the restructuring,we have increased our sales staff from 1,200 to 4,000. So, our market reach is expanding and service levels have improved thrice over.
With the economy slowing, would it not be better to use a distributor-led strategy?
Due to the direct retailing approach, we have been able to identify gaps in our portfolio and are able to respond with quick turnaround solutions. For instance, the repackaging and repositioning of our mineral water brand Bailey as the ‘Fountain of Youth’ happened as a market response to the customers’ need to relate to the brand. This was highly successful and was replicated by competitors.
What has been the market response to Saint? Are you planning to launch its mango and apple variants?
There is a strong price and sector differentiation between Saint and the other fruit-based beverages in our portfolio. Saint caters to the Rs 150-crore pure-juice category that is growing at 35 per cent per annum. Appy Fizz again caters to a niche consumer base.
There is a strong fruit connect present between these beverages and the fruit with the consumer. To answer your question, we would not launch the Saint juice brand in the apple and mango variants.
Can you share with us your plans for Bailey and the water segment?
Post restructuring, our capacity for water has increased by 250 per cent in 2008 over 2007. With the increase in factories , our capacity will further increase by 100 per cent in 2009 over 2008.
What are the new products planned in the confectionery segment?
We launched the confectionery segment with 2 brands last year — Mintrox and Buttercup in the Re 0.50 segment. In the Re 1 category, we have introduced fruit-based eclairs in orange, banana and mango flavours.