Starting operations in British India with orange candies, toffees, ‘boiled sweets' and acid pops, the name Parle is synonymous with glucose biscuits today. The homegrown company is all set to focus on the confectionery business once again.
Today a sprawling suburb in Mumbai, Vile Parle didn’t exist in 1929. What existed in its place were two sleepy neighbouring villages – Irla and Parla. It was here in 1929, the Chauhans, a family of traders, set up the first Indian owned and made confectionery brand – Parle.
The business had humble beginnings. An acre-and-a-half of land was acquired and the factory, 40ft wide and 60ft long, was housed in a cattle shed. Work began with 12 men employed from the village. It is said that the Chauhans were busy playing many roles – as engineers, mechanics and confectionery makers – that they forgot to name the factory. And thus the brand came to be known after its birthplace – Parle.
Today the brand is undoubtedly a major player, owning a large chunk of the Rs 27,000-crore biscuit business. But then the Parle business had started with confectioneries. Rooted deeply in the Swadeshi movement, the Chauhans, who were in the textile business, decided to go Indian. This is because most of the silks for their textile business came from Europe.
“When we started in 1929, we were looking at the business of confectionery. We started small with toffees and candies. There was the popular orange candy and kismi toffee,” explains Krishna Rao – Category Head, Parle Products.
The family acquired a factory which was on sale, at a friend’s urging for Rs 75,000. But the factory needed a lot of work and confectionery making was a task in itself. So it was decided that the head of the family, Narottam Mohanlal Chauhan, would sail to Germany and work in a confectionery factory and learn the ropes. But in the 1930s he did something that would help Parle establish itself as an Indian confectionery brand – he procured the machinery needed from Germany for Rs 60,000.
However, breaking into the confectionery market meant competing with European candies and toffees that came with fancy packaging. But that did not deter Narottam and his brother Pitamber who would land up at every store in the neighbourhood, and hard sell the orange candies and toffees that they made.
At the time the factory was making 40 tonnes a year with a turnover of Rs 50,000. Due to the sharp increase in sugar prices the family decided to cut their losses and sell the factory in 1934 to WH Brady and Company. But as the negotiations were on, Parle turned a profit of Rs 3,000.
“It was during this time the family realised the need for biscuits in the market. It was restricted only to the elite,” adds Krishna.
In 1938, when a biscuit factory was up for sale, they decided to buy it. Narottam went abroad again – England this time, to learn about the business. He bought the required machinery and started the biscuit business with Rs 1,50,000.
“The 50-feet-long biscuit oven first churned out the famed glucose biscuits,” says Krishna. He adds that with time the biscuit business started growing bigger. And soon contributed the core of their revenues.
This is Parle G, the quintessential snack Indians have grown up with. Nielsen today pegs it at Rs 5,000 crore. According to AdAge India, over 400 million Parle G biscuits are produced daily. It currently sells more than 100 crore packets of different sizes, accounting for a whopping 14,600 crore biscuits in an entire year. It is sold across five million retail stores.
“Parle biscuits were in demand, especially during World War II,” adds Krishna. Using the newly-built Indian Railways, Parle would distribute their biscuits through undivided India – Calcutta, Delhi, Madras, and Karachi.
After Independence and Partition, with import restrictions in place, distribution began getting hampered.
“The supplies were a concern, especially for wheat flour. The government had by then introduced the concept of public distribution and promotion of small industries. This, in turn, led to a ‘quota raj’, for a while, which meant that we had access to only certain kinds of food. We were forced to rethink our categories,” says Krishna.
The categories that Parle decided to hold on to become big were Glucose and salted crackers/biscuits. In 1949, the company ventured into the soft drinks market with Gluco Cola and then Gold Spot.
In confectionery, they went on to launch Mango Bite and Hide and Seek in 1998, Poppins, Kismi and several others.
Parle is looking at another shift. Post GST, biscuits are taxed at 18 percent as compared to the earlier 12 to 14 percent. Their popular confectionery, Kisme and Poppins account for around 12 percent, which is Rs 1000 crore of their revenue.
As for their future plans, Krishna adds that the organised confectionery business is pegged at Rs 10,000 crore and is growing at 12 percent with a potential to reach 20 percent. The total confectionery business is at Rs 30,000 crore. “While our focus hasn’t been in the confectionery business, we intend to touch 15 percent in the segment within the next two years,” Krishna says.
Krishna reveals that their top confectionery brand is Kaccha Mango which contributes close to 24 percent of their revenue confectionary business, followed by Melody, at 20 percent and Kismi, which is at 15 percent.
However, today, while older international brands and British restrictions do not exist, Parle nevertheless has to fight Lotte and Hershey, which have acquired Parry and Nutrine respectively. Thus, Parle has a different fight in a different era.