FMCG major Marico has withdrawn its debut product in the snack food category, Saffola Zest, from the country?s market. While launching the brand in 2009, the maker of Parachute and Saffola had positioned it as a salty baked snack which combines health benefits with taste in competitive markets.
However, after seeing the feeble consumer response, Marico has decided to pull out the brand from the maket, informed industry sources.
In the baked foods segment, Saffola Zest faced stiff competition from Parle Agro?s Hippo, Pepsi Frito-Lays Aliva and Parle Products Monaco Smart Chips.
On the other hand, Marico is gearing up for the national roll out of its health brand Saffola Arise after seeing the initial response to its new launch. The company is also planning to set up a new initiative parachute knowledge centre to promote its hair care brands in the domestic markets.
Incidentally, Marico commenced the prototype of Saffola Rice ? lower GI rice that helps in weight management a few months ago. To start with, Marico began test marketing of Saffola Arise in Andhra Pradesh and Mumbai. Currently, the brand is available in 1 kg and 2.5 kg packs priced at Rs 59 and Rs 140 respectively in select market across the country.
On the rationale behind Marico?s move to pull out Saffola Zest, Chaitanya Deshpande, head of M&A, Marico Ltd said, ?Last year, we protyped the snack brand Saffola Zest to gauge the consumer response. It has not been successful. Therefore, we are withdrawing it from markets. We will be reworking our project.? In January 2009, Marico had launched Saffola Zest in three flavors namely, tangy tomato, chatpata masala and mast masala, priced at Rs 10 and Rs 25. Following withdrawal of Zest, Marico is currently reworking on the taste and flavour of its snack brand.
?You win some and lose some. This strategy has worked well with the launch of Saffola Arise but has falied in the case of Saffola Zest. This could be due to the stiff competition in the branded snacks sector too,? an analyst based in Mumbai.
For Saffola Arise, the company is currently beaming a high-voltage television campaign to promote it in competitive markets. According to Deshpande, Marico has diversified into functional foods (atta), salt, snacks and rice to provide healthy options to consumers.
?Marico has been following a prototyping approach to test a few hypotheses in a low-cost fail-fast model before any decision to scale up is taken up. Marico, as an FMCG company is creating a healthy pipeline of new products,? he added. For the purpose, Marico is currently investing behind its research & development projects to launch new products.
