Smoodh: Parle's Journey Into The Indian Dairy Segment

I visited my home recently and found my brother carrying a palm-sized chocolate shake pack. It was not the only time I saw him with the same but, a repeated demand for a 10 rs note to buy a palm-sized tetra pack made me curious. A 10 rs note never hurt my pockets.

One evening the moment he asked me for money, I gave him a 20 rs note to buy two packs of the drink he loves- Smoodh. Eagerly waiting to sip the shake, I waited and to my amazement, it tasted absolutely Yumm!

But, Why not Hersheys or Amul? I wondered. And this intrigued me to research the product making my brother rush to the shops and jump over the shelves- Smoodh.

Parle Agro is the reason our taste buds still twist over the thought of having soft drinks like Frooti and Appy Fizz. It does not require a moment for us to memorize the taste and crave for it. The brand is cleverly continuing to maintain the same with its newest launch- Smoodh, a flavored milk drink.

Parle Agro launched Smoodh in the month of September 2021 and is smoothly sweeping in the stacks at every store we might visit. The flavored milk is targeted in the packs of Rs 10 with the most desirable flavors- chocolate, caramel, toffee and coffee. The flavors themselves are the most basic choices a consumer has in Agro's competitors- Amul, Parag, Mother Dairy or Hersheys. Therefore, displacing the established players to conquer the segment was a challenge accepted by the brand. The brand in its initial seven months successfully reaped a business of roughly Rs 300 Crores despite the slit throat competition in the dairy segment. But, the question remains: How things actually worked?

Money Matters $

The brand worked over not offering a unique flavor but over shattering a unique price point. This perspective of making the brand highly affordable and accessible helped them recognize their USP. USP aka Unique selling proposition can be defined as the feature or the unique characteristics of a product that differs it from others in a similar category thereby making it more appealing to the consumers. For example- What comes to your mind when you think of Hershey's? Probably a word- chocolate. The brand has built itself over USP of the quality and types of chocolate it offers making them highly recognizable by the taste. The thought of thick, creamy, rich and dark chocolate that cut through the chase in our mind when we talked of Hersheys is how we can easily define the unique selling proposition- USP.

Smoodh fought over its USP of lower price point which was the major barrier as per the senior management. They worked over becoming a quality and affordable brand. The brand researched and concluded over the fact how their competitors, Amul being the most prominent one has already conquered the major share of dairy segment but is not able to seep into the rural segment as deeper as it should. Why? Well, somewhere because of its higher price points. Amul Kool- the flavored milk brand serves for Rs 20/180ml. Other competitors also hold similar price points in the segment. The brand tackled and concluded to serve at Rs 10 for 85 ml giving it perfect reach and accessibility in its targeted segment- the rural India. The entire strategy that helped the brand transact over 300 million packs in just a period of seven months is based upon price point.

SWOT ANALYSIS OF SMOODH

Ruling The Rural Minds

The brand on one end fights a tough fight with local brands but also won the battle against players like Amul because of its extensive research and competitive efforts. Upon research a following comparative analysis could be noted that depicts how the two prominent brands- Parle Agro and Amul still hold a differential aspect when it comes to getting deeper in the rural segment. One, on the visible facet has clearly penetrated the rural segment the other on the flip side being the king of the dairy segment continues to fight for the same. Therefore, justifying how strategizing and segmenting the markets as per the products works best if they justify the product, price and people they are meant to serve.

USING FAILURES TO ACHIEVE SUCCESS

Parle Agro holds a vision to make the entire dairy portfolio equal to its beverage portfolio which sums up to almost Rs 6500 crores as of 2019. Following which, the brand has promised itself to learn from the past mistakes it made with the launch of N-joi back in 2001. N-joi was the fruit milk launched by Agro which proved to be a failure because of the inefficient supply chain of raw materials. The product was hence withdrawn in the first 4 years because of the same reason.

THE PANDEMIC AND THE POSITIONING

Learning from its past experience of failure with N-joi , not only the brand focused upon maintaining the supply chain and reentering the dairy segment post analyzing the perfect timing and stage of the segment while working over its newly launched product but also, tackled the positioning in a way to showcase itself as a health conscious product while launching Smoodh. The rising health consciousness during the pandemic proved beneficial to the brand and helped it position as an affordable nutrition drink. The brand faces a barrier as being a “kids only brand” sometimes but continues to grow and skim the profits out of the crowd.

The USP of Rs. 10 packages developed by the brand was the result of identifying the main reason other brands lack their positioning which led them to their effort of developing a thoughtful pack of 85 ml quantity. A well thought, sufficient and perfect quantity available at the most affordable rate is how we can term the same. The brand upon analysis and extensive research of developing over 1000 protocols developed the pack making it enough for a kid to get the taste and feel full of the same.

The process followed by the brand to position itself, develop its thoughtful pack and promote the product powerfully proves highly beneficial to the brand in terms of penetration and raising sales. The profits and sales in the segment that is highly competitive is the one tackled upon promising them an expected profit of selling over 1.3 billion packs by the end of the year, allowing its graph to not end like N-joi this time.

The brand is successfully growing and earning profits today in the market as there are situations that I have experienced where Amul and Hersheys seem to be the second choices. The possible reason might be the affordability for parents when it comes to kids- who make up a huge share of the flavored milk market in India which currently stands at a value of INR 33.2 billion in 2021. Looking forward to CAGR of 26.01% during 2022-2027, i.e. to reach INR 127.7 billion by 2027. The brand is very cleverly clearing the clutter of rural positioned brands and taking a front seat in the shelves. I usually find the packs placed on multiple layers in the refrigerators of the stores with children and now even the youth rushing to grab the pack before it runs out of stock! What do you observe? Have you tried Smoodh and loved it too?

Let me know if you do have any other opinions about the brand breaking the market beyond the boundaries of budget.