Parle Agro is back in fizz after twenty years with a coffee rush

Two decades after selling off its Thums Up, Limca and Gold Spot brands to Coca-Cola, Parle Agro is out to tap the carbonated soft drinks market with gusto.

The company, which makes the fruit-based Appy Fizz and Grappo Fizz drinks, has started test marketing Cafe Cuba, billed as India’s first carbonated coffee rush, and plans to roll it out formally in January-February 2014, just ahead of the peak summer season.

Prakash Chauhan, chairman and managing director of Parle Agro, said it has taken the company ten years to come up with this new product and he is confident this entry will revolutionise the space by introducing a completely new category of drinks.

“I was sure that I didn’t want to bring out a me-too product. This is a differentiated offering and we have got some very positive response from the test launch,” he said.

Cafe Cuba will be available in 250 ml cans for Rs 20 and PET bottles of Rs 15.

Parle Agro is confident that Cafe Cuba can garner Rs 1,000 crore within 12-18 months of its launch.

Chauhan is also hoping to clinch a market share of 7% in the Rs 15,000 crore carbonated fizz market in the first year itself.

The company plans to more than double its turnover from Rs 2,000 crore in 2012 to Rs 5,000 crore by 2015.

Going ahead, it also plans to launch a diet version of Cafe Cuba.

The company has invested Rs 150 crore to expand the capacity in its existing 14 plants by 60%. Out of this investment, close to Rs 105 crore, or 70%, of the investments will be utilised for manufacturing Cafe Cuba.

Considering the product is niche, the company plans to target the urban markets first and believes that initially, close to 70-80% of the revenues will come from the urban markets.
It was in 1993 that Parle Agro sold off its its brands-Thums up, Gold Spot, Limca and Citra to cola giant Coca Cola on its re entry in India. Chauhan had also signed an agreement to not compete with Coca Cola in the same space for ten years. Even after two decades, it is Thums up that is the largest selling brand in Coca Cola’s portfolio in India and not its flagship brand Coke.

Other players also believe there is scope for the beverage category to grow further.
Venkatesh Kini, deputy business unit president, India and South West Asia, Coca Cola, said the entire beverage market is estimated to be Rs 30,000 crore in India and there is potential in the market to grow. “The per capita consumption of packaged beverages in India is slow. Out of the 56 servings in a week, only one is packaged beverage. Therefore, we believe there is lot of scope for the market to grow.”