Has Appy got its fizz back?

It's too early, but Parle Agro is betting big with a brand extension of Appy this time. Will it work?

For years, Appy, Parle Agro's apple juice drink has fought India's obsession with mangoes. Mango-based fruit drinks account for Rs 800 crore or two-thirds of the fruit drinks category (the category size is estimated at Rs 1,200 crore).

A large fresh fruit juice stall-owner from Mumbai says, "Mango is the favourite, followed by strawberry and then mosambi or orange juice." Numbers? If 10 full glasses of mango juice are consumed, it would be one glass or even half a glass of apple juice.

If this is a representative market reflection, this would typically mean that Appy would have to be happy, catering to a niche. Or, do something radically different to stand out in the fruit drinks basket.

But traditionally for Parle Agro, that may also have been the root of a paradox. Appy's biggest competitor was within Parle Agro itself. Mango drink, Frooti. It fought Appy in terms of time, money and corporate efforts. From the time of its launch in 1985, Frooti enjoyed the luxury of a significantly higher advertising and marketing budget over Appy, which was launched a year later.

That was not Appy's only disadvantage. If Frooti, was India's first Tetra Pak drink targeted at kids, Appy was meant for teenagers. But as Appy was launched in a similar Tetra brick-shaped pack as Frooti, customers perceived it as a drink for children.

As a result, even when Parle Agro had developed the carbonated variant of Appy, a decade back, Appy Fizz had to wait for its moment under the sun. The company says it wanted the sales of Appy to stabilise, before trying out variants.

The other, and more important reason was Indian consumers had to be ready for such a drink. In the past, the company had grappled with a similar issue.

In 1996, when Appy had an estimated 5 per cent market share in fruit drinks, Parle Agro launched Joly Jely, a jelly-based drink in Orange and Strawberry flavours (favourites at juice stalls). But the product was seen as ahead of its time. The company had a tough time educating consumers that Jely was vegetarian.

A makeover
If Appy Fizz had to wait in the wings, Appy got a fresh look. In 2003, the white packaging was replaced with a new black pack.

The pack also had graphics of champagne glasses as graphics. After the repackaging, the company claims the drink was particularly successful in student-heavy cities such as Vizag and Pune. Along with an increase in offtake, the company enhanced its reach. Employees were trained to teach retailers the importance of visibility.

Finally, in 2004-05, the company felt the time was right to leverage the brand's equity. As a stroke of luck, the pesticide controversy had hit cola drinks, and consumers were looking for alternatives. Appy had the colour and the fizz.

Nadia Chauhan, director, marketing, Parle Agro says, "People were looking for healthier alternatives and Appy Fizz had all the requirements to fulfil this need."

Adds Shripad Nadkarni, former vice-president, marketing, Coca-Cola India and currently, director, MarketGate Consulting, "There has been an increase in health consciousness and companies are trying to reconcile to the health and fun platform."

Appy Fizz was launched in August 2005. But this time the company paid special attention to its packaging. Appy Fizz shed the Tetra Pak to be covered in champagne-style PET bottles. The champagne glass graphics were retained.

The fizz promise opened new consumption channels. Appy could soon enter discotheques, pubs and five star bars as the company believes Appy Fizz mixes well with a range of drinks. Imagine, the white pack Appy trying to do the same.

To play up this promise, Parle Agro has created a book of cocktail recipes using Appy Fizz that's given to bars and restaurants. At the same time, the company believes that it can also cream off another segment of the market pie by positioning Appy Fizz as a substitute to alcohol. Two birds with one shot?

Market challenges
As a next big step, the company has launched a six-week long television campaign showing a group of youngsters chilling out with Appy Fizz. Targeted at the age group of 18-25 years, Parle Agro has chosen channels like ESPN, Zee Café, Star World and Star Plus. A radio and hoarding campaign in all major metros will be unveiled soon.

The company is also ensuring greater visibility at retail outlets with large banners, posters and prominent bottle holders. At Food Bazaar, a large format retail store in Mumbai, there is also a special section for Appy Fizz, adjacent to the wine section.

The result: Appy Fizz has become bigger than the mother brand in many metros. Distributors say that sales of Appy Fizz have doubled in the last five months.

However, some industry experts feel that it's still early days. Says Nadkarni, "While it's too early to comment on Appy Fizz, one must remember that the Indian soft drink market is extremely price-elastic."

However, Chauhan of Parle Agro believes that the price points (Rs 18 and Rs 25) is right as Appy Fizz is a premium drink and claims that the price point was fixed after significant research.

Says she, "We want Appy Fizz to be the champagne of all fruit drinks. The positioning, packaging and pricing are all reflective of that."

At present, Appy Fizz is in demand. Distributors agree that the summer season has a role to play in its increased demand. But brand extensions have had a mixed experience in the Indian market. The challenge for Parle will be to keep the fizz going.

THE FIZZY JOURNEY

1986: Appy launched in brick-shaped Tetra Pak targeting teenagers

1986-93: Slow sales; remained a marginal product largely with children

1993: Packaging revamp made. More in the mould of Frooti now

1996: Parle Agro develops an aerated version of Appy but keeps it in the lab. Waits for right time for market launch

2003: Colour of Appy pack changed to black. Another market push

2004-05: Appy product sales improve; greater visibility

Aug 2005: Appy Fizz launched in PET bottles

Aug 2006: Bigger market push. Distribution enhanced