Parle Agro reworks logistics to boost sales

Parle Agro, the Rs 950 crore FMCG company with brands like ‘Bailley’ and ‘Frooti’, is aiming at a turnover of Rs 3,500 crore by 2011, led by more manufacturing units closer to the market to cut down on transportation costs, as well as launch of new products and marketing thrust for its beverages and confectionary brands.

According to the company’s director Nadia Chauhan, the biggest challenge right now for the company is to expand distribution reach from 10 lakh outlets to 40 lakh outlets soon.

“Beverages is our largest revenue-earner right now. So, we are looking at entering high volume-driving beverages categories. The challenge is also to expand our distribution reach from 10 lakh outlets now to 40 lakh outlets soon,” Chauhan said.

“Much of our growth will also come from our water brand ‘Bailley’. We intend to have a total of 60-65 water factories by end of this year, up from around 32 right now. We need more factories so that each can be situated closer to the market as this reduces transportation costs and makes the business more price competitive. Also, our confectionary business is very new and we have a number of launches lined up, which will also contribute to our overall growth,” Chauhan added. The company recently launched brands LMN (nimboo pani) and Saint Juice, to cash in on the summer season.

“Another way to push sales is through consumer activities and promotions. So, we are redoing the graphics for our Frooti brand,” Chauhan informed. This summer, Frooti will undergo a complete makeover and will sport different graphics on tetrapacks and PET bottles.

“The youth loves to use emoticons like smileys in their communication on the mobile, e-mails and chats. So we have combined the ‘fun’ part of mango with the emerging trends in the lives of our consumers and created ‘Mangoticons’. Right now, we have devil packs, heart pack, mango head-phones. Going forward, we will involve consumers to tell us what other graphics they want to see on Frooti packs. These will be incorporated so that the new Frooti can serve as a point of conversation and a communication medium in itself,” Chauhan informed.

Ahead of the summer season, Parle Agro is also gearing up to launch a marketing campaign that will look at repositioning its mango drink Frooti as a contemporary youthful brand. Creativeland Asia (CLA) has worked on the repositioning exercise which will see Frooti in a repackaged look. CLA is also the agency behind Frooti’s upcoming ad film which revolves around the concept of “Why Grow Up?”

“We did not hike prices of our products for the last 8-10 years because of the volumes in sales we achieved which helped us stay profitable. But now, even after the drop in raw material prices, we had to increase prices of ‘Frooti - one of our faster selling brands - to Rs 12 for 200 ml, which was Rs 10 earlier. While the recent drop in raw material prices have been an enabler, our margins are still under pressure due to several other costs, like operational expenses which has peaked year on year,” Chauhan added.