Parle Agro banks on fruit-based fizzy beverages
With the successful launch of Frooti Fizz, Parle Agro Pvt Ltd is now banking on the fruit-based fizzy drinks market to fuel growth, a top company executive said.
“Although we did extensions of Frooti in the past, a long time ago, but Frooti Fizz is the most successful extension so far,” joint managing director Nadia Chauhan said in an interview. “We did Appy Fizz 10 years ago, we created the sparkling fruit-based beverage, a ₹600-700 crore market. We have more than 90% market share.”
Chauhan said that with the success of Frooti Fizz, the company may be able to expand this market to ₹4,000 crore in the next 5-8 years. Parle Agro, whose biggest and oldest brand is Frooti, had introduced other variants of Frooti in the past, including raw mango and pineapple, but Frooti eventually came to be associated with the mango fruit. That made setting up a new extension challenging, Chauhan said. “How do you innovate in the mango beverages category? More than 95% of fruit-based beverages in India are based on the mango.”
Frooti Fizz, launched in March this year, came soon after the Food Safety and Standards Authority of India (FSSAI) announced new definitions for carbonated fruit beverages.
According to these, carbonated beverages with 5-10% of fruit juice are classified as carbonated fruit beverages, and not colas.
“I don’t think this is just about carbonated versus non-carbonated drinks. The beverage category has a lot of sub-segmentation waiting to happen, just like it has been in the packaged foods market. Instead, (the differentiation) will be about synthetics versus water. Consumers prefer a natural fruit-based sparkling drink rather than a synthetic sweetened carbonated water drink,” Chauhan said.
The carbonated drinks market, valued at ₹25,000-30,000 crore, is expecting its slow decline to accelerate as the tax burden on the sector rises with the new GST regime. Under the new regime, carbonated drinks will have an additional 40% sin tax on them.
Since its launch, Frooti Fizz has already reached 500,000 outlets nationally, while Appy Fizz is available in 1.5 million outlets, Chauhan said.