Parle Products, a biscuit and confectionery manufacturer, is entering a new category – pulses – with the launch of a new brand, Fresh Harvest which will be sold across retail outlets in the country. The move comes against the backdrop of the Goods and Services Tax (GST) rollout on July 1 post which the prices of pulses will be reduced. With a production of 27 million tonnes per annum, India is the among the largest producers and consumers of pulses. “Today, everything from atta to pickles, is branded and hence, with only a few players in the category, this was the obvious next move for us,” Mayank Shah, category head, Parle Products told FE.
The company expects the pulses category to contribute around 7 to 8% of its total turnover in the next couple of years. In 2016-17 the Parle’s turnover was around Rs 10,000 crore. Further the company is investing 20% of its new product budget in the category. However, experts are skeptical about FMCG companies entering this segment given price fluctuations. “It is not a very wise decision for a FMCG company to enter this category as the price fluctuation in this category is high and changes almost every day. For a FMCG company to change price on a daily basis is difficult,” said Arvind Singhal, chairman, Technopak.
“The current pulses market is worth Rs 1,00,000 crore and is set to grow to 35 million tonnes by 2020,” says Shah. The company has just rolled out sales in Maharashtra and will do so in parts of India over the next 12 months. Targeting the SEC A&B1 consumer, the Fresh Harvest collection will comprise Toor, Moong, Urad, Channa and Masoor dals will be available across retail outlets, self service outlets and local retail chains across 5L+ towns in the state.
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Tata Chemicals and Mahindra & Mahindra had ventured into the pulses market in 2015 and 2010, respectively.
Talking about its main categories – biscuits, Shah highlighted that increase in prices of sugar and wheat, have impacted the prices. The company has taken price hike of 5 to 7% in certain categories in the last one year and going forward, the pricing will get affected keeping in mind the GST as well as input costs.“The Biscuit and Cracker Manufacturers’ Association (B&CMA) is planning to write to the government to sort exemption of low-price biscuits under Rs 100 per kilogram under GST,” says Shah.
In the last decade, Parle has forayed into multiple categories like snacks (western and ethnic), premium chocolates and bakery items (rusk and cakes) and wants to continue it with pulses market. In the coming years, it plans to look at products like besan, maida etc.