Date:09/08/2005 URL: http://www.thehindubusinessline.com/2005/08/09/stories/2005080902150800.htm

Back Parle Agro plans confectionery foray

Purvita Chatterjee

Mumbai , Aug 8

PARLE Agro is turning sweet. The Rs 600-crore Mumbai-based beverage company is planning to enter the confectionery market. Its R&D department has been actively working on the category for a while and there are intentions of launching a new brand.

Speaking to Business Line, Ms Nadia Chauhan, Director, Marketing, Parle Agro, said, "Eventually we do intend getting into the confectionery market. It is something that we have been working on. It is expected to be a separate brand in our portfolio.''

Realising the challenges in this category, especially with biggies like Hindustan Lever withdrawing from the category and even Cadbury struggling with its confectionery brands, Ms Chauhan says, "Confectionery is a fun category. One cannot have normal marketers marketing a confectionery brand as they get into jargons, which necessarily do not apply while marketing to kids. What you need are innovators, somebody who can introduce different things over a short period of time. Even while creating communication, it is the kid who has to be targeted.''

Besides, Parle Agro has already initiated a second rung of distribution for the confectionery category since it launched its Frooti brand in triangular packs pegged at Rs 2.50. These packs were retailed mainly at smaller outlets, which included the rural markets. Says Ms Chauhan, "When we launched the Frooti triangular packs we were available in hardware to mutton shops who wanted to stock the brand. The product was competing with confectionery already since it was like a shot of mouth freshener.''

Unlike its mineral water brand of Bailey, where high trade margins are involved, Parle Agro hopes that its confectionery brand would have quicker shelf offtake and command lesser margins in the market.

Apart from confectionery, Parle Agro intends beefing up its beverage portfolio and has already lined up a series of new beverages, which would range from health drinks to iced tea. "There would be more beverages from our stable and we are looking at a mix of mass and premium drinks which could be milk based and have natural flavours.'' In fact, the beverages have already been lined up and are waiting for the `right' time to make an appearance in the market. "There will be more drinks between now and next year,'' promises Ms Chauhan.

With a strong distribution network comprising nearly 3,000 distributors across the country, Parle Agro hopes to use this network to ride its new brands as and when it launches them.