OLD IS GOLD: PARLE PRODUCTS
Recently, the calls for localization have been ringing aloud in everyone’s ears. But it is important to not get swayed away by blind localization, globalization too is equally important!
When I think of a company that has been able to delicately balance globalization and localization for over 9 decades, Parle Products is the first to come to my mind. It is a company that is deeply ‘Indian’ at heart and globally competent.
Parle’s flagship product, a product that is associated with ‘India’ by every Indian, Parle G, fondly called ‘Gluco’, is in fact the child of globalization and localization, glocalization.
To know more about how Parle embraces glocalization, it is paramount to understand the circumstances in which it was conceived, its path towards growth, and the challenges it faced and overcame.
Let us turn back time to the early 1920’s when Mohanlal Dayal, the founder of Parle, ran a successful tailoring establishment in Mumbai. Around the same time, the Swadeshi Movement had started gaining steam. He heeded to the calls of the movement and decided to set up a confectionary in the locality of Vile Parle (suburb in Mumbai) that would empower localization, but at the same time, embrace globalization. This laid the foundations for Parle, the name derived from the locality itself!
In its initial years, the confectionary made orange candies and milk-based toffees.
At the time, biscuits were largely imported from Britain, and sold mainly to the British elite and the affluent Iocal population. It had never been introduced to the broader public on a large scale. Several local fragmented players existed, but neither had any meaningful impact in introducing global tastes to the Indian masses.
Parle in 1938, decided to seize this opportunity, and introduced India’s first mass made biscuit, the Parle Gluco. It was made of three locally available ingredients: wheat, sugar, and milk.
Its success largely hinged on two factors: Affordability & the pride of ‘Made in India’.
Despite having an entirely localized set up, Parle was successful in introducing new global tastes to the locals. Parle bridged globalization and localization.
Following this blueprint, in 1942, Parle introduced India’s first salted cracker, the ‘Monaco’. This was another resounding success!
However, the tumultuous times of 1947, of our Independence, posed new problems to Parle. Many wheat-producing areas had been lost. This led to an acute shortage of wheat in India, the main ingredient for Parle’s biscuits.
Taking cognizance of the situation, Parle immediately moved to manufacturing barley biscuits, thereby displaying their adaptability, which I believe comes from localization. ‘Making do with what one has!’. Nevertheless, bad times tide over, and Parle resumed making wheat biscuits soon after.
The widely popular cheese-based cracker was introduced in the form of Cheeslings in the year 1956. They also propped up their candy and toffee ranges, with the launches of Kismi (1963), Poppins (1966), Melody (1983), and Mango Bite (1986).
Despite a vast multitude of successful products, the Parle Gluco stood out as the flagship, ‘head and shoulders’ over the others. Its resounding success attracted several imitation brands looking to make a quick buck and ride on the prosperity of the original Parle Gluco.
This was a cause of worry for Parle since consumers were unable to identify the original Parle Gluco amongst all the imitations. To cement their position as the original, in 1982, they came up with a re- branding strategy that would eventually lead us to the iconic white and yellow paper packaging with the Parle Girl. Parle Gluco was renamed to Parle G. Advertisements were also released which showed consumers how to spot the ‘original’.
This iconic packaging still exists today, albeit, with a cheaper and more attractive plastic packaging.
Parle in 2017 identified the need to cater to the growing number of affluent Indians. Hence, they launched the premium Platina brand, which now comprises of products like Hide&Seek biscuits (launched in 1996, then assimilated into Platina brand), as well as Milano biscuits.
Moreover, Parle has been growing their global footprint. They have 8 manufacturing facilities outside India (Cameroon, Nigeria, Ghana, Ethiopia, Kenya, Ivory Coast, Nepal, Mexico) catering to over 25 countries including the likes of USA, UK, Canada, Middle East (Bahrain, UAE, Oman), Singapore, Australia, and New Zealand.
In my opinion, Parle has been able to bring out the best in glocalization practices which has led to the creation of a robust business model. A few parameters which have likely enabled Parle to grow steadily are:
- Pricing Control: Parle has been able to control the prices of their products consistently well, still making it available at a similar cost as before (similar cost = considering inflation as well as rising base incomes). This has been largely possible by adjusting the size and number of consumable units in each pack, and by keeping a check on raw material inflation.
- Brand Loyalty (Parle G): Having been around for over 9 decades (4 generations), it is one of the few brands that makes one nostalgic. An emphasis on quality, nutrition, and superior taste has ensured that people keep going back for Parle G. As is well known, some things are passed from generation to generation. Luckily for Parle G, it too has been passed.
- Advertising Campaigns and Packaging: Their advertisements have always been clear in their intent and messaging, and are extremely attractive to the eye. The packaging too has always been impeccable and has been able to stand out amongst its competitors. The iconic white and yellow packaging of Parle G with the Parle G Girl has stood the test of time and is often imprinted on our minds.
- Wide Market Reach: Parle boasts a wide market reach due to an extensively developed distribution network. It is one of the few brands which is available across the entire country, from urban high-rise areas to extremely remote border outposts. Parle identified the need to tap the rural and semi urban markets (majority of India’s population still resides here), a long time ago, and thus has been able to establish dominance in these highly price sensitive geographies.
- Manufacturing in India: Parle has 10 company owned factories, and over a 100 contract-based manufacturing facilities. The decentralized manufacturing across the country has ensured that Parle is able to reach the otherwise lowly penetrated rural and semi urban areas with ease.
However, times are changing since Parle first introduced biscuits to the masses of India. There has been a rise in competition with the likes of Britannia and Cadbury operating in the same market.
The GST reforms announced in 2017 have hurt Parle since their biscuits were now taxed at a much higher 18%. This led to a slowdown in sales, especially in rural and semi-urban areas (these are Parle’s key areas of operations and most sales come from Parle G and Monaco) where consumers are highly price sensitive. On the brighter side, the new Platina range has shown a steady growth despite the headwinds.
This led to a tale of contrasting fortunes for Parle, declining sales for the iconic Parle G, and increasing sales for the newer Platina range. However, owing to the strength of Parle’s business model, sales have started recovering across all segments since 2019.
Parle, through its ups and downs, has always embraced glocalization and will likely continue to do so.
I hope that I have been able to delight you the same way that Parle has delighted over 4 generations of tea drinkers!
Truly, Old is Gold!
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Since I have not spoken directly about how Parle has performed during the Covid-19 crisis, I would suggest you to visit https://economictimes.indiatimes.com/industry/cons-products/fmcg/82-year-old-parle-g-books-best-sales-in-covid-times/articleshow/76275237.cms to have a look at how strong business models survive and thrive through crises!
Coincidentally, this article was published 2 days prior to the decided launch of my article. I believe that reading the article in the link above will enlighten you more on Parle-G as a brand.
Sources for statistical data and images: