Parle Agro takes a bite of health snacks

Parle Agro, the maker of Frooti and Appy brand of beverages, is the latest entrant in the Rs 6,500 crore branded snacks segment with the launch of a baked health snack brand— Hippo.

While the sister company Parle Products is already present in the snacks market with Musst Bites, Parle Agro is essentially looking at the health snacks market.

From current turnover of Rs 950 crore, the company is looking at reaching Rs 3,500 crore by 2011, a huge chunk of which it is eyeing from the foods division.

The product that is introduced in five flavours at price points of Rs 5 and Rs 10 for 15 gm and 38 gm would be rolled out in Maharashtra first followed by a national rollout in August this year.

“We are looking at launching more SKUs (stock keeping units) for Hippo, which is our first product launch in the health snacks segment. Going ahead, we will launch more products,” T Kanagasabai, general manager-foods division, Parle Agro, said.

The snack production will take place from company’s unit near Ahmedabad and would be scaled up to two more units in a month. The production of the Hippo will eventually happen from eight manufacturing units across the country.

The Indian health snacks market is growing at 25% year-on-year, and with the growing interest of consumers towards healthier snacking options many players are looking at better alternatives to potato chips.

PepsiCo India Holdings Ltd’s foods division Frito Lay that manufactures Lays, Cheetos and Kurkure brand of snacks, has this month entered baked health snack Aliva. The company has been for over a year now focusing more on the health concept and communication towards reduction of saturated fat content. It focused more on the health benefits on labelling, to cash in on the increasing consumer inclination for healthy and guilt-free snacking habits.

Like Hippo, Aliva, too, is using wheat as its main ingredient and is positioned at Rs 12 for 60 gm with 4 flavour options. FritoLay will look at leveraging on Rs 2 and Rs 3 price points and will roll out the brand in a phased manner.

“We are using textures from the biscuits category that is value added with the taste of the salty category and by doing so we are creating a brand new category, which is a baked savoury cracker. And we are using cut-throat packaging for it. We are really behind creating a new category,” Gautham Mukkavilli, president of PepsiCo India, said.

FMCG firm Marico Ltd is already present in the category. It had in the last financial year launched health snack under the brand Saffola Zest, which is slightly premium on price point compared with the other players in the branded snacks segment. Marico is ambitious with the category and is in the process of taking Saffola Zest national.

ITC Foods that now makes the Bingo brand of chips—a health snack—had played around the idea of health snacks in 2003-04 with the introduction of a brand Bischips. Bischips did not fare well and was phased out soon after launch.