The Rs 6,500-crore branded atta market has been a graveyard for many brands. So why is Parle Products betting its shirt on this market? Why is it also rushing to grab a bite of the Rs 4,000-crore cereals category?
For the firm, which posted net sales of Rs 17,223 crore in FY2023, atta + cereals is the surefire formula to becoming a “branded house”, rather than a “house of brands”. The biscuit-maker entered the packaged atta and cereals market in 2021 with the launch of Parle G Chakki Atta and Hide & Seek Fills, but the foray remained on a slow burn for most of the next two years. Now it is ready to step on the accelerator.
Till about a few years back, more than 90% of Parle Products’ revenue was contributed by biscuits; today it has come down to about 75%, with the rest contributed by snacks, confectionery, atta, rusks, and bakery items. Still, “the imagery of the Parle corporate brand is driven largely by Parle-G”, admits Mayank Shah, vice-president, Parle Products. Indeed, apart from brand Milano that had roped in Hindi movie actor Hrithik Roshan for a sustained television campaign about a decade ago, the company has rarely thrust any of its other brands into the spotlight.
No wonder, while the company retails 50-plus brands straddling a range of categories, for the lay consumer, Parle-G is all about the cuddly kid on a yellow-and-white pack hawking glucose biscuits. “While Parle-G is doing a great job by lending the trust it enjoys to all other brands, we would like to push our entire portfolio and showcase our range,” Shah adds. The idea is to move out of the long shadow of the brand that has become the de facto category reference. “The cereal and atta categories offer avenues for the firm to establish a presence in consumers’ daily lives, beyond snack occasions,” says Yasin Hamidani, director, Media Care Brand Solutions.
So what will it take?
The big picture
This journey to reimagine the Parle brand identity started about seven years ago through campaigns such as “Naam toh Suna hi Hoga” and “Naam Toh Yaad Rahega”. Now the brand is tinkering with product packaging to reflect a common identity across the board. It hopes to draw upon its learnings from the unsuccessful staples foray in the 90s. While it withdrew because of poor offtake, atta remained a focus area because it is a crucial raw material for some of its other offerings like biscuits. The company saw the pandemic and the ensuing need for hygienically ground wheat flour and assurance of a trusted brand as another opportunity to try and prise open the Tier 2 and Tier 3 markets. With a firm grip on flour and sugar sourcing, entering cereals was just a natural progression.
However, this transition from a “house of brands” to a “branded house” will take more than just communication or packaging tweaks. Realigning internal processes, supply chains and marketing strategies to accommodate this shift requires substantial resources and strategic planning, say experts. “Also, potential resistance from traditionalists — and that includes both consumers and channel partners — who have strong associations with specific Parle brands cannot be undermined,” points out Hamidani.
Experts also highlight the risk of diluting the brand recognition enjoyed by its most popular product, Parle-G in the process. “Balancing unified brand messaging while maintaining product differentiation is crucial,” points out Hamidani.
Then there is the bigger task of tackling competition. About 50% of India’s packaged atta market is controlled by brands such as ITC’s Aashirvaad, Adani Wilmar’s Fortune and Patanjali. On the other side, a big chunk of the breakfast cereals market remains in the grips of established players such as Kellogg Co, PepsiCo, Bagrry’s India and Marico. While the unbranded segment remains a force to reckon with in atta, smaller regional brands touting various health benefits have heated up the cereal category.
Given that, getting noticed is the key thing the company should focus on at the moment and for that it has to explore multiple media options —and not just television — to reach out to a wider consumer segment, says Rutu Mody-Kamdar, founder, Jigsaw Brand Consultants. A strategic mix of nostalgia, innovation, and product-centric messaging can position Parle as a versatile brand, gradually allowing it to step out of the long shadow cast by Parle G, say experts.
Parle Products is no pushover. It has increased its ad spends on digital almost three times in the last five years. “About 35% of the ad spends goes into digital, 50% goes into TV. While TV remains a dominant medium, in the next few years digital will be bigger. About 8 to 9% spends today are on newspapers or print and the balance about 6-7%, would be outdoors and BTL,” Shah shares. Its recent ‘Roko Mat Toko Mat’ and ‘G mane Genius’ campaigns speak the language that will click with its new consumer cohort.
That apart, Parle Products can depend on its fantastic distribution reach. Its products are present in close to 7.5 million outlets — general trade contributes about 87% to the total sales; about 10% is contributed by modern trade; while quick-com and e-com put together contribute about 3%.