The Hindu Business Line : `Pure sweetness'

EID Parry hopes to generate brand consciousness in the sugar market by offering substantial value-adds to commodity sugar, but without increasing the price.

WITH the launch of Parry's Pure refined sugar in November last year, EID Parry (which has been in the sugar business since 1842) made its entry into the rather nascent branded sugar market. And, within the next one year, the company's Managing Director, G. Rama Babu, hopes to create a revolution in branded sugar not only by offering more variants (such as sugar cubes, brown sugar and sugar syrup) but also by targeting different price-points.

Though brand consciousness is still a distant cry, Babu says that branded sugar definitely has a promising future. He says that as consumers become more and more health conscious, they will be willing to shell out an additional rupee or two for a branded product that is pure and is hygienically packaged.

He says that after commodities such as atta, salt and oil made their way into the branded arena, consumers have begun to accept that there would definitely be significant value-adds if an established company gets into branding. "Parry's Pure refined sugar for instance, is sulphur-free and is absolutely clean unlike the normal sugar that is available in the commodity market. Since we use the best of international technology to process the sugarcane, our product obviously comes at a premium." says Babu.

But branding, says he, would be successful only if it is offered across price-points. "Sugar manufacturers have to offer value-adds to commodity sugar without increasing its price."

"While our refined sugar is targeted at the premium segment, we are trying to bring in a revolution in the generic sugar category, by launching it with less sulphur and better purification methods. We plan to brand this sugar and offer better quality at the same price," he adds.

Though the brand name for the new product is still under discussion, Jayraj Rau, Vice-President and Client Services Director, JWT (the advertising agency and marketing consultants for EID Parry), says that the focus of the mass brand would be on distribution rather than advertising. "We are going to drive it on price. Our task would be to convince customers that if they can't afford to buy refined sugar, there is a more viable option — a product which would cost as much as the normal sugar available in the market, but would be available with more value-adds. And all this can be done only if a proper distribution network is in place."

Strategy

Parry's Pure refined sugar, which is already available in Chennai, Bangalore and Pondicherry, would shortly be extended to the smaller towns of Tamil Nadu and Karnataka, and by the end of the year it would also be available in Andhra Pradesh and Kerala. The company for the time being plans to sell branded sugar only in the southern markets. "Sugar is a freight sensitive product, and we can roll out our products in the other markets only when we have a plant there," says Babu.

The company has also planned a series of media campaigns and below-the-line activities. The TV campaign, which would go on air in the next few weeks, would focus on the purity of the product, says Rau. "The campaign would talk about how mother's love translates into purity, how she cares for her children's well-being, and so on."

Branded sugar market

India is the largest sugar consumer in the world and the second largest producer. It consumes about 180 lakh tonnes annually, out of which the retail segment accounts for just 45 lakh tonnes, according to an industry observer. "Around 20 per cent of the total sugar produced is consumed by big industrial consumers such as soft drink companies, chocolate and confectionary makers, biscuit manufacturers and so on. While another 55 per cent is consumed by unorganised bulk consumers, such as sweet shops. Therefore, the branded sugar market would be in the region of one-two lakh tonnes," he says.

"The sugar market in India is purely driven by price. The biggest challenge for the branded players would be to bring in enough and more value-adds to convince the consumer to buy a branded product. The customer has to see value in the product, or else whatever value adds the company offers will remain a cost," remarks K. Radhakrishnan, Vice-President, Marketing, FoodWorld Supermarkets.

Rau of JWT feels that consumers are willing to pay a slight premium if there is guarantee that the product is pure. "When we tested Parry's Pure in the market, prior to its launch, the consumers had no perception that the sugar that they buy is impure. But when we did the purity test, they were willing to pay the premium."

G. S. C. Rao, Executive Director, Simbhaoli Sugar Mills, which markets refined sugar under the brand name Trust, says that with purchasing power on the rise and more and more sugar manufacturers branding their sugar, brands are definitely here to stay.

Branded sugar was first launched in 1992 by Mavana Sugar Mills in North India. But the concept has not really taken off with only a handful of companies such as Dhampur Sugar Mills (Dhampure) getting into the fray. EID Parry is the first to launch branded sugar in the southern markets. "Earlier, there were lot of restrictions in the industry. Sugar manufacturers were not allowed to pack sugar in 1 kg packs. But now with the restrictions being lifted and the Government giving the manufacturers the freedom to produce a variety of sugars (brown sugar, sugar cubes), branding will definitely play an important role," says Babu of EID Parry.

Parrys is shortly going to roll out refined sugar cubes under the Parry's Pure umbrella, and would launch sugar syrups and brown sugar in the next one year. Babu says that EID Parry would also look at offering customised sugar to the various institutions such as pharmaceutical and soft drink companies. "Most of these companies buy sugar from us and process it to suit their needs."

With the launch of Parry's Pure, EID Parry, which currently sells around 50 tonnes of refined sugar in the retail market, plans to take the number to 20,000 tonnes by the end of this year. And, with the launch of its second brand, which would challenge commodity sugar, Babu is confident of sweet success.

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