Parrys To Expand Distributor Network

While the number of distributors will go up to 1,700 from 1,100, the number of outlets too will cross three lakh at the end of this year. Currently, 1.7 lakh outlets provide direct coverage to its products.

The company, which incurred a net loss of around Rs 15 crore last year, has taken efforts to consolidate its business through a number of strategies which will be pursued through key marketing initiatives and new launches.

With the distribution network been expanded to address the unrepresented areas, the company has decided to launch new brands in the Re 1 segment. Parrys Confectionery has only Coffy Bite bar in the Re 1 segment.

S K Ghatak, vice president of the company said, "We have been adversely affected by the excise hike on toffees to 16 per cent from 8 per cent last year. We have made a representation to the government, but nothing has materialised."

The segment comprising toffees and chocolates is a very price sensitive one. Following the excise hike, Parrys Confectionery is trying to make up for this through cost cutting, volume increase and reduction in wastage as price hike would not have been the right move, Ghatak said.

Significantly, the company has recently launched Lacto King with vitamins in the 50 paise segment. "Chocolate with vitamin is a new concept in India," he said.

The company ranks first in south and second in the west and now aims to improve its market share in north and east India. Meanwhile, the company is looking at use of improved systems and information technology in improving its retail coverage with 29 depots going online very soon.

Parrys Confectionery has state-of-the-art plants at Manapakam and Nelikuppam. "Our R&D keeps pace with changing consumer needs and tastes," Ghatak added.

In a bid to make a turnaround, the company has also put in place a strong team of people, headed by N C Venugopal. It may be mentioned that three year ago, McKinsey had recommended the group not to divest its confectionery arm.