Parle Agro is confident of making B-Fizz a ₹1000-crore-brand in a few years

• Parle Agro launched a new product this week called B-Fizz and earmarked Rs 40 crore for its marketing campaign solely for this calendar year.
• On the back of a strong marketing and pricing strategy, Parle Argo is aiming to make B-Fizz a ₹1000-crore-brand in the next couple of years.
• Nadia Chauhan, Joint Managing Director and CMO, Parle Agro spoke to us about the whole process of launching a product from researching to shelving, idea behind on-boarding two different brand endorsers for different markets, target audience, larger vision for the company and much more.

When it comes to coming up with innovative, industry-first beverages, Parle Agro has been the frontrunner. With its latest launch, B-Fizz, a malt-flavoured carbonated apple drink, the company envisions becoming the number one beverage player in India eventually.

Parle Agro currently dominates the fruit plus fizz drink category by over 90% market share with its flagship brand Appy Fizz and now, with its foray into malt-flavoured drinks, it is confident that it will be able to accelerate the category’s growth significantly and bring it to up to Rs 10,000 crore from Rs 1,500 crore in 10 years.

In the past, the brand has tried to expand its presence with Mango Flavoured Frooti Fizz and Grappo Fizz, which did not last for too long. So, this time, the brand is playing safe and smart by piggybacking on the popularity of Appy Fizz for the newly-launched B-Fizz, which is a marriage between apple and malt. Another reason why the brand believes in this category is because it has seen a consistently increasing trend of consumers moving away from synthetic beverages towards fruit-based beverages.

Parle Agro is therefore going all out to promote its new product launch. It has invested Rs 40 crore in a high-decibel 360 degree campaign, on-boarded Priyanka Chopra Jonas for the Indian market and Jr. NTR for the Southern India. B-Fizz will also be the sponsor for a few select marquee television properties and air its TVC during IPL to get the ball rolling. In just two weeks since its launch, the drink is already present in 500,000+ outlets.

With a uniquely positioned product and strong marketing strategy, Parle Agro is confident of making B-Fizz a ₹1000-crore-brand in the next couple of years.

We caught up with Nadia Chauhan, Joint Managing Director and CMO, Parle Agro, to understand the research process, pricing strategy and goals for this calendar year.

Excerpts:

Q. What were some of the factors that pushed you/influenced you to launch B-Fizz?

As part of our growth strategy, we invest in R&D to introduce innovative new products to the market; products that will appeal to consumers and take our business further. B-Fizz is one such product that our team developed a few years back. After conducting successful trials we were waiting for the right moment to launch it. As we went through various phases of unlock, we noticed a phenomenal performance in our sparkling fruit-based drink category with our brand, Appy Fizz. We thought it was a great opportunity to expand that category further with the launch of B-Fizz which is a sparkling malt flavoured drink with apple juice. We were able to commercialize B-Fizz in less than 30 days from the time we made the decision to launch it.

The timing of the launch worked perfectly for us in several ways. As the country underwent the last few phases of unlock, retailers who were earlier operating under numerous constraints during the lockdown, have now opened up and are operating at almost 100%. Consumers are also getting back to some sense of normalcy. Additionally, the second half of the year is not just the festive period where there is typically an upswing in demand, but it also sees a second summer in the month of October across the country. Since the season also plays a large role in the beverage industry it was a great time for us to launch B-Fizz.

Q. What is the marketing strategy for your new product launch? What is the marketing investment going to be?

We are investing Rs 40 cores in a high-decibel 360 degree campaign across various media for B-Fizz. We have launched two new TVCs, one featuring global icon, Priyanka Chopra for national media and the other featuring Jr. NTR exclusively for southern markets. The TVC campaign will be supported by innovative print, mobile and digital activations. B-Fizz will also be the sponsor for select marquee television properties. The campaign will also be aggressively promoted across IPL on Hotstar and YouTube. We have also been looking to deploy OOH for higher impact across 96 cities as of now.

Q. What would your distribution and pricing strategy be? Will it be available on e-commerce and delivery platforms?

B-Fizz is a product that we have launched with a mass distribution strategy in place. We’re today at 500,000 outlets with more than 3000 towns covered. We have launched B-Fizz at a competitive price point of Rs. 10 which is a critical part of our strategy. We believe this price point will enable us to scale up distribution for the brand across both rural and urban markets and make it more accessible to consumers. And yes, we will be available across various platforms, not just traditional retail but also modern trade and e-commerce. We expect B-Fizz to become a ₹1000-crore brand in the next couple of years.

Q. The product is priced at Rs. 10 for 160 ml SKU, so how environmental-friendly is the product's packaging? Or will that be a focus later on in brand's journey?

It’s an incorrect assumption to say a product available at a lower price point is indicative of a compromise in the quality of packaging. Parle Agro has a reputation built on quality, trust and has always ensured products which are best in class to deliver a superior consumer experience. Our ability to price a product at 10 rupees, an extremely competitive price point, is based on our strategy of creating economies through scale. The 160 ml packaging is a pack that is manufactured on a mass scale for Appy Fizz, the same is being applied for B-Fizz through various technological innovations in designing the preforms. These innovations are created and manufactured in-house as well, which is also how we’re able to achieve this kind of competitive price point.

Q. Since the packaging and TVC is quite bold and colourful and positioned as a drink 'for the bold', are you looking at targeting millennials? Who will be the core target for B-Fizz?

We are primarily targeting the youth between the age groups of 15-30 years for B-Fizz. Nevertheless, the unique taste of B-Fizz will appeal to all age groups.

Q. Since consumers are becoming very conscious of their health and avoiding cola-based drinks and people are still at home and snacking more, have you seen an increase in demand of your products in the last few months?

Our entire product portfolio focuses on fruit based beverages and has gained huge traction over the years. We have seen a consistently increasing trend of consumers moving away from synthetic beverages and more towards fruit-based beverages. This is perhaps, one of the big growth drivers for our category as well and a reason for why we have grown as much as we have.

Q. What kind of trends did you witness during the lockdown? Did you cut down on your ad spends for this year? What will your larger marketing strategy be for the rest of the year?

When it comes to business trends during the lockdown, companies had to adapt, on a daily basis, to the constantly changing rules and regulations being implemented across different parts of the country. Pro-active planning became a critical approach to maintain continuity of supply and distribution to tackle the challenges in mobility that emerged during the pandemic. We also witnessed the growth of the ecommerce platform. Though the e-commerce channel is still very small for the FMCG industry, there has been an acceleration in the adoption of this channel by consumers and brands alike. We have also on-boarded numerous ecommerce players and are continuing to do so.

With regard to consumer trends, the lockdown has led consumers to become more conscious about their food and beverage choices. We foresee consumers spending a lot more on products that are natural versus those that are synthetic. For instance, fruit-based drinks like our products with natural ingredients, will be the preferred choice of drink over synthetic ones.

Through the lockdown, we halted most of our marketing spends since majority of the retail stores were shut and with restrictions in mobility, people weren’t allowed to go out unless absolutely necessary. But now, as we move towards the last few phases of unlock, our budget allocations are back on track. We are investing Rs 40 crores for the marketing of B-Fizz which is until the end of the calendar year for 2020. Next year, we will be back on track with our regular marketing budgets of about Rs 250 to 300 crores across all our existing brands.

Q. Why did you decide to get a separate brand face for the southern market? Is that one of your strongest markets?

In southern markets, the influence and affinity for regional cinema and celebrities is very strong. Thus, to drive greater brand resonance with the audiences in the south as well as generate higher brand recall for B-Fizz, we chose a separate ambassador for the southern markets. Jr. NTR is a great brand fit and just like for Frooti we have Allu Arjun, we have Jr. NTR for B-Fizz in the south.

Q. Parle Agro currently has a brand turnover of Rs. 6500 Cr. With a new addition, what are revenue goals for FY 2021-22?

Parle Agro currently dominates the fruit plus fizz drink category with Appy Fizz with over 90% market share. With the launch of B Fizz, the target is to build the Fruit plus Fizz category to Rs 10,000 Cr. by 2030. We believe we will end the calendar year with 5-10 per cent growth over the previous year with B-Fizz being one of the contributors to that growth.

Q. What is your overall vision for Parle Agro?

Our vision is to make Parle Agro the No. 1 Beverage Company in India.