We have recently started setting up local manufacturing plants in many countries through a franchise model or direct operation, says Nadia Chauhan Kurup, joint managing director at Parle Agro. We have activated Bangladesh and Nepal, Sri Lanka, Africa, GCC or Gulf Co-operation Council, South East Asia are all in the radar. The company exports to 20 countries including the US, Canada, the UK, UAE, southeast Asia, and Australia.
With its entry into these markets, Parle Ago will have to build their brands from the scratch, Chanchal Biyani, sector analyst at Mumbai-based brokerage GEPL Capital said.
If Indian companies are acquiring a brand in the overseas markets, it is a better option. Parle Agro will need time to build its brands in these markets, he added.
The company plans to market its select brands mango juice Frooti, mineral water Bailley, apple juice Appy and snacks under the Hippo brand in these markets.
The branded fruit drink market is growing at a fast pace in Bangladesh and Nepal, says another analyst from a Mumbai-based brokerage. In other developing countries too, theres a strong demand for branded fruit drinks and snacks.
Recognising the growth potential in these countries, Parle Agro is entering them, added the analyst. He or his firm cannot be quoted as they do not comment on companies plans.
Parle Agro also intends to make country specific brands for these markets. We also intend to create certain country specific brands, to be able to gain high consumer acceptance and a competitive edge. Our distribution is through a local franchise who makes and distributed our products, says Chauhan.
It will not be a cake walk for Indias largest fruit juice maker, known for Frooti. The company will have to compete globally with various multinationals as well as home grown brands.
Apart from his global plans, the company is now focusing on strengthening its entire sales and distribution infrastructure to support its aggressive growth plans. Over the last two years, we have had major expansions, says Chauhan. Over the next one year, our focus will be to consolidate and grow exponentially our new foods and new beverage brands. The company is now investing more in research and development to make new products.
Parle Agro is planning to make carbonated drinking water under its existing brand Bailley to strengthen its presence in the beverage market, says an investment banker with direct knowledge of the development. Chauhan, however, refused to comment.
Parles global market strategy is a split vote, said four analysts FE spoke. A few analysts say it has already worked well for many companies, others say it may not work now with the signs of economic slowdown. The slowdown has already started affecting many emerging markets, says an analyst who tracked the sector until two months back. On the flip side, consumers will prefer cheaper Indian brand to international brands. Ideally, Indian companies should develop brands to suit local needs of consumers in developing countries, added the analyst.