Amul may be able to leverage its brand name to find its footing. However, to say that it would be a cakewalk for Amul might be an overstatement.
Amul recently made another venture outside dairy products, with the launch of a range of fruit juices called ‘Tru’. While there are many players that have found their turf in fruit juices segment and are established names in the market, including the comparably newer entrants such as Raw juices and PaperBoat, Amul may be able to leverage its brand name to find its footing. However, to say that it would be a cakewalk for Amul might be an overstatement. It also runs the risk of eroding its flagship brand, if the new offering does not deliver.
What is at stake?
The juice market is pegged at around Rs 2,500-3,000 crore. While Amul has an upper hand in the milk industry and milk-based products, the competition in the juice segment is stiff. “Unlike dairy, Amul will find tough and well-entrenched competition in this segment,” Chandramouli N, CEO of brand consultancy TRA, told Financial Express Online.
However, the main concern here for Amul may not be capturing consumers but saving its name, if the product misses. “Sometimes, overreaching beyond its own sector can erode brand trust too,” Chandramouli N said. “Milk and juice are not the same, and neither is the market for the two categories. I just hope Amul would have already done a Buying Propensity study, knowing the customer’s keenness-to-buy, for their Tru brand, else it can be a test-by-fire for Amul, a failure the ‘infallible’ brand can ill afford.” Chandramouli added.
Mulling over Amul: Brand name is enough
With a stronghold in the dairy market ever since its inception, Amul is a name that immediately strikes a chord with the buyers. Amul has delivered products, which are liked by consumers, year over year, by maintaining quality and there has rarely been a product which was not well received, with the exception of Amul’s Heat and Eat pizza.
“Amul is a soft super-power in the realm of FMCG brands in India,” and “if anyone in the space [can capture consumers] of FMCG, it sure will be Amul! This is one brand that has huge dollops of consumer positivity when it comes to brands to eat and drink.,” veteran brand expert Harish Bijoor told Financial Express Online.
Amul has a widespread network of distributors and retail points, 10,000 distributors and over a 100,000 retail points respectively. Being a brand with such a far-reaching capacity, “it can reach every nook and corner of India within a fraction of time. With its competitive price-point, it is likely that this brand from the Amul stable will make a small, but noticeable impact in the market,” said Chandramouli N.
But, it may not only be about eating into the pie, but rather growing it. “Amul’s way in the market is typically not only eating into existing shares, but creating new shares from nothing,” Harish Bijoor said. Hence, it is given that Amul will grab 7-10% of market share in the first-roll, he added.
Four flavours; foolproof or fallible?
Tru juices have been launched in four flavours — Mango, Orange, Apple and Lychee. “If this range of offerings is able to captivate the imagination of Indian consumers, more will follow of course. A limited range that is lowest-common-denominator taste oriented is always a good way to start,” Harish Bijoor said. “Four variant launch is practical to test the markets,” Chandramouli added.
Amul MD R S Sodhi is yet to respond to the queries sent by Financial Express Online.