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Parag Milk Foods shifts focus to health and nutrition to catch up with changing tastes

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Parag Milk Foods is on an expansion drive in the country, steering the preferential shift from Buffalo to cow ghee, consolidating their presence across all major markets with a growing portfolio of brands. Rashi Bisaria spoke to Mahesh Israni, Chief Marketing Officer, Parag Milk Foods about the marketing and investment plans of the private dairy, and its inclination to innovate. Edited excerpts:

This seems to be an exciting time for Parag Milk Foods as you are entering into new categories and expanding presence in northern India. What has spurred this growth?
Since time immemorial, importance of Cow milk and its products have assumed significance in our eating habits and especially for Uttar Pradesh, with its long tradition of being the land of milk & honey since Lord Krishna, Cow Milk and its products need no introduction. However, this significance was lost in between due to influx of mixed milk concept and no proper choice available with consumers. We are now trying to bring back that tradition of pure Cow Milk back to the consumers of Uttar Pradesh. Uttar Pradesh also has strategic significance for Parag Milk Food’s ambitions of establishing itself as the largest player in this space. Since Uttar Pradesh with its vast geography and population is the largest consumer of Milk & Milk products, it is natural for Parag Milk Foods, which is the largest private dairy and largest Cow Ghee player, to establish its leadership in this region. The market leadership of Gowardhan Ghee in Uttar Pradesh will help us strengthen our market reach and in increasing our brand portfolio across the dairy products.

What was the motivation behind the new corporate identity?
It has been a fantastic journey so far which has spanned over the last two decades. We have matured and evolved as a company and have always stayed at pace with the changing dynamics of the market and understood the pulse of our consumers. This journey started with launch of Gowardhan brand, which was targeted towards traditional value-seeking house-wives, followed by the introduction of Go brand, targeted towards youth & kids for direct consumption products. A niche brand, Pride of Cows was introduced with a unique proposition of Farm to Home concept targeted towards taste connoisseur. Finally we forayed into dairy based beverages with the launch of ToppUp, a brand targeted towards consumers on the move seeking quick nourishment and fulfilment. As a marketing organisation, we have realised the need of connecting this brand portfolio with the parent organisation. This builds a sense of confidence in the consumer’s mind and that is what we endeavour with this new corporate identity. It speaks of who we are as a company: multidimensional, inventive, dynamic, modern, and bold. With an amazing portfolio of dairy brands, we have a steadfast commitment to delivering exciting, quality products to the Indian consumer, and our new identity is reflective of this promise and there are many exciting new developments to come.

What is the marketing plan looking like in this new phase of growth?
We are drawing up our investment plans for next 2 years and shall have it ready by next month. In terms of Marketing, we have spent around Rs. 70 crores in the current year and would cross spends of Rs. 100 crores during next year. As the country and world is becoming digital. This year along with the traditional marketing we are also focusing more on digital marketing.

Currently, our marketing mix is 70 to 80 per cent skewed towards TV and around 15 per cent accounts for press. The balance is on social media and point of purchase. We plan to invest a lot in point of sales as well. There is a lot of innovation happening at point of sales in terms of visibility, the manner in which you talk to the consumers and so on. Moving forward, we will have an equal split between addressing the consumer at home and the shopper located at the point of purchase. And overriding this is the digital world – one cannot ignore digital today. Parag also does a lot of consumer sampling. Being in the food industry, if your consumer tastes your product once, he is yours for life. We do this at modern trade and places of congregation in key towns.

Which new categories are you planning to come up with in this year?
We Parag milk foods Pvt Ltd is known for constant innovation and quality. This year we are focussing on health and nutrition beverage category. For that we are trying to step-up the value-chain ladder and convert itself from a dairy & foods Company to a Health & Nutrition focused Company. We are trying to bring this focus into all our product offerings and obviously, beverages are the first in line. We have launched Topp-up milk in the market, with higher protein content to provide much-needed energy to the target consumers i.e. commuters & youth / kids as also provide satiety and fullness to the stomach. Similarly, we recently launched Buttermilk in the Market, with no Fats, no sugar and low salt but with all the goodness of proteins & minerals. We have many more such exciting products like whey-based beverages & exciting milk based beverages , in pipeline and would be launching it over next 12-18 months in a phased manner.

Over the years, what kind of change have you perceived in the tastes of consumers?
In current times, families are becoming nuclear. The food decision maker – woman of the family is working so she has less time for cooking. Also, consumer is educated and becoming more health conscious. So the trend is more into ready to cook, easy to carry packaged food which provide instant energy like yogurt, topp up , cheese slice, cheese wedges etc.
Also there is a trend of OOH consumption which is on the rise and this trend of OOH food being replicated in home is also important and hence it becomes far more important to make your presence felt at POC points

What is the edge you have over the others in the same space?
Also we are 100% cow’s milk and we have our state of art dairy farm which is used as a hub for transferring best practices to our farmers which will help better the quality of overall milk
We have been the trend setters in many categories in the dairy business. Also the technological knowhow and a modern plant with a strong R&D centre.

Although we know about the brand and it’s a trusted name, there is no single brand proposition that it offers. Are you planning to change that?
No. We have 4 strong brands which have their individual brand personality and identity and each caters to a specific target audience

Which is your largest selling product and which states are the biggest markets for you?
Parag Milk Foods started as a milk company. Ghee was the first product that we went into the consumer segment with. Our real transition into consumer goods started in 2009 and we have evolved greatly. The portfolio today is broadly divided into liquid milk which contributes around 20 per cent to our top line. We supply milk in key cities of Maharashtra and South India. The next big category is cheese that contributes 25 to 30 per cent to revenues. The third segment is SMP ( skimmed milk powders) that accounts for 20 per cent. The fourth category is the new product lines (UHT and tetrapak), which account for seven to eight per cent of revenue. Lastly, we have a ‘Fresh’ division comprising of dahi (curd), yogurt, paneer (cottage cheese), which accounts for 15 to 18 per cent.

The way dairy companies evolve is that they become strong in the place they are located in. We are a home-grown, Maharashtra company with the plant located near Pune, so our strength is the West – Maharashtra, Gujarat. The second plant came up in Andhra Pradesh and this caters to the entire country, so in a sense we are strengthening our distribution across the country. Ideally we want our presence in all the villages that have a population of 1,000-plus, but that’s not possible. So we are trying to get our distribution right. I have a strong west base and now have a strong foothold in the North – primarily in UP, Delhi, hills of Himachal. Our stated intent for the next couple of years is that we want to expand rapidly in the South and North. Recently we enter into UP market with our flagship product Gowardhan Ghee.

We plan to go big in the South as the plant is located in AP and we will have an advantage of doing a lot in the ‘fresh’ categories. The three large metros of South account for large cheese consumption markets, specifically Bengaluru and Hyderabad.

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