Parle Agro looks to expand in south India2 min read . Updated: 27 Jan 2018, 04:30 PM IST
Parle Agro eyes nearly triple-digit growth in south India in the next few months, says Nadia Chauhan, joint MD and chief marketing officer
Mumbai: After dominating the fruit drink category in north and west India, Parle Agro is making a beeline for India’s southern states, with plans to “hyperlocalize" its iconic brands Frooti and Appy, a top company executive said.
The company has been identifying local film stars and distribution points unique to south India to help move the region’s growth from the current 45% year-on-year to nearly triple-digit growth in the next few months, Nadia Chauhan, joint managing director and chief marketing officer of Parle Agro said, in an interview.
“South as a region has had a 6% growth rate in the last few months as per Nielsen data, while we have had a 45% growth rate down south," Chauhan said. “South is our third-largest contributing region but over the period of the next 12 months, I see south will become at par with the west and probably become a challenge for the north as well."
Parle Agro closed calendar year 2017 with Rs4,000 crore in revenue.
Parle Agro recently signed up Telugu film star Allu Arjun to endorse Frooti for southern markets rather than previous television campaigns with brand ambassadors from the Hindi film industry. Chauhan said this was part of the firm’s commitment to “hyperlocalize" their brands and make them appealing to south India customers.
Besides, Parle Agro has been tailoring its distribution system to make Frooti available at points in the south where most of the “on the go" consumption happens. In north and west India, this is most often railway stations and small shops outside offices.
“The retail construct in south is very different from up north," Chauhan said. “To start with, modern trade commenced in India from south, so the contribution from modern trade is much higher in south. Another segment that you see a lot in the south is the bakery segment," she said, adding that bakeries saw the most on-the-go consumption because it was a place for young students to hang out and snack after classes.
On-the-go consumption packs—the smallest and lowest priced packages for Frooti—are one of Parle Agro’s biggest revenue contributors. “The on-the-go pack—the lowest priced SKU—that is what helps create a strong, established network," Chauhan said.
Besides, the firm dominates this category with 68% market share.
Of Parle Agro’s 13.6 lakh outlets in India, 5 lakh are in the south.
The move comes at a time when local juice and fruit drink makers are making their presence felt in northern and western Indian markets. For instance, listed mango drink maker Manpasand Beverages has been rapidly expanding its presence in rural and semi-urban areas in these two parts of India with its Mango Sip brand that sells only in Rs5 and Rs10 packs meant for on-the-go consumption. Meanwhile, multinational competitor Coca Cola India has begun revamping its own mango drink brand Maaza. Last month, it launched a premium variant, Maaza Gold.