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Parle Agro plans to make Frooti No. 1 again: Nadia Chauhan, joint MD

Nadia Chauhan, joint managing director and chief marketing officer of Parle Agro, talks to Moneycontrol about health consciousness among consumers and how it affects sales of packaged fruit-based beverages such as Frooti.

March 31, 2022 / 07:40 PM IST
Frooti Brand Ambassadors - Alia Bhatt and Ram Charan

Frooti Brand Ambassadors - Alia Bhatt and Ram Charan

Beverage companies are gearing up for a ‘big summer season’ after two years of disruption due to the pandemic. Parle Agro, the maker of Frooti mango juice and Appy Fizz, has launched four television campaigns with four film stars as brand ambassadors and has set a budget of Rs 200 crore for the season.

The company has added about 800 people to its sales team in anticipation of a surge in demand. The company also has big plans for its newly launched B Fizz and Smoodh drinks for the season. According to Nadia Chauhan, joint managing director, new products are planned in the dairy-based beverage segment. In an interview to Moneycontrol, she also spoke about the growing health consciousness among consumers. Edited excerpts:

Non-alcoholic beverages are set to see a ‘normal summer season’ after two years of disruption. What’s been the response so far in March?

The whole industry is very excited as we enter the summer season… And this time we are going into summer of 2022 without experiencing the anxieties and the lockdowns, so the sentiment is extremely optimistic…

March has brought in more sunshine with the fact that schools and colleges have also opened up almost 100 percent nationwide. A large part of our consumer base is really the youth and youngsters and a lot of their spending happens when they’re independently moving around. Over the last couple of years, schools and colleges were shut, hence, movement was quite restricted. Today, markets have gone back to beyond normal.

But overall, do you expect to cross pre-Covid levels this season?


We already crossed pre-Covid levels last year. We are talking about very aggressive growth rates this year. We are looking at over 30-35 percent volume growth over last year. We grew at about 14 percent in 2021 over 2019 in volume terms and about 47 percent when compared to 2020. Of course, 2020 was a very different year, because through the year the markets were closed. But in 2021, companies had already started making big shifts towards crossing the pre-Covid level sales figures.

Last year too there were disruptions – the second wave was bang in the middle of summer. So, what helped you register growth last year?

In 2020, everybody was in a flux, because no one knew what was really going on. In 2021, however, it’s sad to say, but there was greater familiarity with this whole concept of a lockdown and the pandemic. And we had figured out how to service the market. Also, though there were disruptions, the market was a lot more open versus the first lockdown.

And a large part of our performance has come from the fact that we adapted quickly to the restrictions. We took a lot of initiatives such as tele-calling as a mode of operation for taking orders to limit the amount of physical movement and interaction.

Besides that, we had two very big launches. We entered into the dairy sector with Smoodh and before that we also introduced B Fizz. And both of these launches have done exceedingly well for the company, not just from a Covid perspective but in general.

For this season, specifically, what are some initiatives being taken? Any new plans in terms of distribution and retailing?

The first and foremost thing for us is to ensure our distribution infrastructure is activated. In fact, we have hired almost 800 additional people in the sales network to ensure that our entire base of over 2 million outlets are being effectively serviced from the start of the season. For an FMCG or beverage player, the heart of the company is the sales and distribution system. So we are making sure that it is alive and completely lubricated. And we have our marketing campaigns to support these initiatives by ensuring top-of-the-mind visibility.

Besides this, there are lots of other initiatives. The lockdown gave way to the e-commerce segment and we are continuing to focus on the channel even though other segments have opened up. We have been working on gradually increasing our presence on the channel and creating a business model that works.

In dairy, we have a lot coming up. Keeping that in mind and the fact that we will be introducing additional SKUs (stock keeping units) in our portfolio, we are trying to boost our infrastructure and almost double our distribution base to be able to accommodate the expansion. That’s something that we’ve been working quite aggressively on over the last few months…

In less than a year, in terms of the number of packs sold of Smoodh, we have outdone every single other player in the category. We believe we have disrupted the segment with our price points and product packaging and have taken the category to regions it has never been to.

Today, 50 percent of our contribution for Smoodh comes from rural markets. And these rural markets have never experienced any other packaged flavoured milk brand before because most packaged flavoured milk brands have operated at price points three times the price point that we operate at. This has allowed us to be a lot more accessible and that is really allowing us to grow the healthy beverage market as well.

We have always been fruit-based, never synthetic. Today we are getting into dairy products. All of our initiatives have been to grow the healthy beverage segment, multi-fold, and not by creating extremely small niche segments, which are not really impacting the large-scale population of our country.

This is the second time you have entered the dairy segment. How is your strategy different this time, especially when it comes to the supply chain?

The first time when we launched, we launched like everybody else, a very premium product offering and a very premium price. Today, we continue to offer a premium product but not at a premium price. We have priced it at Rs 10 in an innovative pack format, which has never been seen in India before. Smoodh comes in an 85 ml pack format, which has been the perfect pack size for a dairy beverage.

Our entire approach with Smoodh has been to really grow and establish the dairy beverage category in India. In terms of the backend, the whole country has made extremely big strides forward in terms of availability of milk, and also the supply of milk…

Whether it is fruit-based beverages or milk as an ingredient, both come with their own set of challenges. We have put together an infrastructure within our head office that is specialised in dealing with this, in procuring at the right prices and making sure that the quality remains stable, which is why we are able to provide fantastic product quality at these incredible prices.

While consumers have become health conscious, it has mostly been in the wake of the pandemic. Do you see this trend sustaining?

Understanding health consciousness, understanding what is the right product offering to cater to the slow-growing health consciousness within our country is very important. There is a niche sector that has evolved in India, where there are certain extremely healthy products but very expensive. Those products can only be sustained within that segment. If you try to take those products to mass India, they will not be relatable or affordable. I don’t think that there is a market for it.

People want to move away, first and foremost, from synthetics. They want to move to products that have natural fruit content or any kind of natural content or even a dairy-based product, which has natural content. That is the first shift that is happening and this is sustainable.

Perhaps there will be a host of other shifts that will come and perhaps some consciousness on sugar content or calories in general will perhaps be the next shift. There is definitely awareness across the country for healthier alternatives, but these healthier alternatives need to be relatable, they need to be affordable and only then will they be sustainable.

Do you think this trend will impact the consumption of fruit-based drinks such as Frooti as they are perceived to be high in sugar?

Perceived to be high in sugar by whom?

By consumers. I also represent a consumer set.

Okay, how many calories do you target in a day?

About 1,400-1,600.

The fact that you could even tell me your calorie intake target isolates you as a consumer type. I don’t think too many consumers in India are aware of that.

Culturally, we are very different as a country. Almost every second shop in the country sells mithai. We are a very unique country and we do not need to start talking like the West. Yes, there is definitely a concern about sugar intake – that is across the board. Also, because of our socio-cultural habits, behaviour, religion or tradition, we consume certain tastes – products that taste in a certain manner.

Today, I am more than happy to give you a complete zero-sugar Frooti. We have it in our lab, but will consumers buy it? They will not. Do they relate to that taste? They do not. Will they continue to prefer the current Frooti instead? They would.

Let me rephrase my question. Do you think the next leg of growth for Frooti is in the rural areas while consumption in metros will decline?

We have taken a lot of initiatives towards gradually driving consumers towards healthier alternatives. And it’s a gradual process and will not happen overnight. Urban and rural markets both continue to contribute, equally, to the growth of Frooti and it is not considered today as a high-sugar product. It’s a brand that has fruit content in it. The sin products are the ones that have nothing but sugar and water in it...

The shift has happened gradually and manufacturers have to take the initiative of leading consumers towards the healthier alternative but gradually, at a pace that consumers can also adapt to. Smoodh has the lowest sugar content in comparison to all our competitors. We have ensured an extremely good taste experience, but we are trying to make a gradual shift at a pace that consumers can also adapt to.

Frooti has gained market share of late but it’s still behind Maaza. How do you plan to regain your position as the top player in the segment?

Frooti has been gaining market share continuously and there are large parts of the country where we hold the No. 1 position already. A large part of the business for competition comes from PET and Tetra Pak formats. And one of the formats is RGB which is fast declining. A large part of competition's business at present is not from glass bottles.

We are being aggressive on distribution and marketing. We have a lot of SKUs that are at the No. 1 position nationally. Within Tetra Pak, we hold the No. 1 position. We are trying to get more consumers into our brand portfolio by increasing the distribution of our other SKU packs like 600 ml portion pack. But in markets like the north, which is a big market for the sector, we are No. 1. And, you know, we hope to actually achieve the position of being No. 1 in the south and west as well over the next couple of years.

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Devika Singh
first published: Mar 31, 2022 04:46 pm
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