Twenty years after parting with Thums Up, Limca and Gold Spot, Prakash Chauhan, the founder-chairman of Parle Agro, one of the three companies formed after the Parle group split, has re-entered the carbonated soft-drink space with the launch of Cafe Cuba. The coffee-flavoured beverage will target the 17-30 year age group, and will be available for Rs 15-20 in 250-ml bottles and cans. Chauhan tells Viveat Susan Pinto that it will be launched across the country by February, 2014. Edited excerpts:
Why did you decide on a coffee-flavoured soft-drink?
I frankly wanted to do something different and felt this was a good way to make a start. Coffee, in my view, is a stronger and bolder beverage that tea, which I find mild and delicate. So yes, Cafe Cuba has a strong flavour.
It is also something that we developed completely in-house, after carefully evaluating the market and the prospects for a coffee-flavoured soft-drink.
It took us 10 years to develop this product and our test-marketing of Cafe Cuba has yielded good results. We have received positive feedback for the product and are confident that it will create a niche of its own.
While you have staged a comeback into carbonated soft-drinks, you have actually steered clear of Coke and Pepsi with Cafe Cuba. Does their size and control of the domestic market worry you?
I am confident of the product we have developed. We are targeting a turnover of Rs 1,000 crore in the first 12-18 months. We may even consider exports, but that will come later.
I don't think other players in the carbonated soft-drink space have a product like this either in India or overseas and I think we can make a difference with Cafe Cuba.
To ensure that manufacturing and distribution of Cafe Cuba is smooth, we have invested Rs 150 crore to increase capacity at 14 of our plants across the country, apart from increasing our sales and distribution infrastructure.
We estimate that Cafe Cuba will be amongst our leading products along with Frooti, Appy and Bailley. I am not worried of competition.
Since growth for carbonated beverages is saturating in urban markets, will you go to the hinterlands like the way Coke and Pepsi have done in recent years?
You will be surprised to note that 70 per cent of the carbonated beverage market is still located in urban areas. We will not ignore the urban market, despite the fact that it is saturated. We are positioned at a slight premium to our competitors. So, the product is suitable for the urban markets, though we do propose to look at the country-side as well, as we go forward.
You will launch cans and plastic bottles. What about returnable glass bottles (RGB), an important segment in carbonated soft-drinks?
We are developing an RGB network, so you will see Cafe Cuba in RGB format too. But I cannot comment on the timeline. All I can say is that it is on the cards.
Will you look at larger packs of Cafe Cuba such as a 1.5- or 2-litre bottle, which are meant for home consumption and do well in modern trade?
No. We are not targeting families. The idea of having smaller packs such as 250 ml or 500 ml is to target individuals.
I still believe that there is a market out there for products that are indulgent. And, when you are targeting the young, a certain amount of indulgence does help. I am not saying that being health-conscious does not matter. We will look at a diet version of Cafe Cuba in the future. But let me add here that people, in general, want something different, which we are offering with Cafe Cuba.