Parle continues to find balance between premium and value offerings

Parle Products, a prominent player in the Indian FMCG industry, has successfully navigated evolving consumer preferences by simultaneously catering to both premium and value segments. Mr. Mayank Shah, Senior Category Head of Parle Products, shed light on the company’s strategy and outlook amidst changing market dynamics.

He highlighted that both urban and rural demand has been on the rise, reflecting a shift in consumer behaviour. He emphasized, Currently, both urban and rural demand is growing, and both value and premium products are doing well. Till about a quarter ago, premium products were doing well and there was pressure on value products, but now there is a revival of rural demand, and we are seeing traction across both premium as well as value offerings.

Acknowledging the challenges posed by rising wheat prices, Shah discussed their impact on the company’s bottom line. He stated that although there has been a 7–8% increase in wheat prices, the reduction in the cost of another key ingredient, edible oil, has mitigated the overall impact on profitability. He explained, Net-net, the impact is not as much as one would expect. As the price of edible oil has come down from an all-time high of about Rs. 175 to Rs. 95-98, there is a much-needed respite, and almost all companies have passed back those savings to consumers through either consumer offers or reductions in MRP.

When questioned about the potential escalation of wheat prices and its implications for the company’s pricing strategy, he assured that the current concern is not as substantial due to the reduction in edible oil prices. He mentioned that while wheat prices are a concern, the company expects them to stabilize, and any necessary price adjustments will be made in alignment with market dynamics.

Addressing the distribution network and consumer behaviour, he discussed the ongoing shift in consumer preferences. He stated, Both in fact. It is a good thing right now that we are getting back the volume growth because we are passing on the benefit of lower input costs through extra weight and a reduction in MRP. He emphasized the revival of demand in rural India and the positive impact of the company’s measures to pass on cost savings to consumers. As Parle Products continues to find the balance between premium and value offerings, the company’s adaptive strategies showcase its commitment to meeting diverse consumer needs across varying market conditions.