Listed company Manpasand Beverages is investing to achieve rapid growth, plans to double production capacity with three new units at Vadodara, Varanasi and Sri City and expand distribution network after tie-up with Parle Products. The company is likely to report 32 per cent growth in net sales and 25 per cent growth in Ebitda, based on extent of scale up of Mango Sip in tie up with Parle and completion of new units, says brokerage house Prabhudas Lilladher. Abhishek Singh, director of Manpasand Beverages in conversation with Sudeshna Banerjee shares the company’s branding a promotion strategy.
What has been your brand-building effort?
Brand-building has been a continuous effort since the Company’s inception in 1997. Our strategies and tactics have evolved with time though. Initially when we started, the major players, mostly MNCs, were present only in the big cities of India, leaving a gap for tier II and III cities. We sensed an opportunity there and experimented with our products in these areas. We made our products available for the Indian Railways. These moves paid off by establishing Mango Sip our flagship brand and in turn Manpasand as a credible name in the Indian beverage market.
After gaining significant prominence, we adopted a two-pronged strategy of building a strong network of distributors and being customer centric.
One of our key strategies has been leveraging distributor relationships apart from other marketing strategies, such as direct promotional initiatives, celebrity endorsements, television advertisements and outdoor hoardings. Till today, we manage the entire business. On a daily basis we host 10 of our distributors with their families at our main plant in Vadodara. Today, Manpasand’s brands are present in 24 states through more than 400,000 retailers, over 2500 distributors and 250 plus super stockists.
Although we have products ranging from Rs 5 to Rs 99, we have seen that around 55-60 per cent of the sales are in the Rs 5-10 range. This is because there is a huge demand for Rs 5 /10 products in India, especially in smaller cities and towns.
To appeal to a wide range of customers we introduced PET and Tetrapack in various SKUs and at affordable price points. In addition, to achieve a better brand recall we roped in brand ambassadors. For ‘Mango Sip’, we have Sunny Deol, for ‘Fruits Up’, we have Taapsee Pannu, and for ‘Manpasand ORS’ it’s Mary Kom. Also, we have ventured in to strategic tie-ups with QSRs, Food Chains, and retailers to develop stronger brand recognition for our products among consumers. Some of the major tie-ups have been Barista, Heritage Group, SPAR, Reliance, Metro Cash and Carry etc. We have also tied up with IRCTC e-catering last year.
What has been your marketing strategy for differentiated products like Coco Sip, Jeera Sip and Siznal?
Our goal is to make healthy drink mainstream. For all our products, we deploy separate distribution channels and sales team as we believe each one is different and would require a customised approach.
‘Coco Sip’, which is packaged 100 per cent tender coconut water, is available at select outlets in metro cities. The price point is Rs 40 for 200 ml SKU. We are currently outsourcing the manufacturing of this product, but with our upcoming plant at Sri City we will be adding a dedicated line for ‘Coco Sip.’ This will help us to increase the production of ‘Coco Sip’ and in future we can look at reducing the price too.
With ‘Jeera Sip,’ we have entered the traditional Indian drink segment. Positioned as a healthy and yet refreshing beverage, the product is available in 250 ml and 160 ml PET bottle. Currently the product is available in five states through retailers – standalone and modern.
We have just rolled out ‘Siznal’ in a few select outlets. The product is a blend of fruits and vegetable juices with a dash of honey. Since, the product is in premium category and a new concept too, we want to give it some time before we scale up.
We spend about 7-8 per cent of our revenue in marketing and promotional activities. Mango Sip and Fruits Up TVC have been running for some time now. In addition to this, we use dealer boards, glow signs, and POP (point of purchase) materials to highlight our products. We are also engaging other mediums such as outdoor hoardings, radio jingles, and event sponsorship to drive high visibility across tier II and tier III cities.
How have your brand ambassadors helped sub-brands?
Our brand ambassadors have been carefully vetted on the basis of their resonance with the brand’s philosophy and their appeal to specific segment or market.
When we launched Mango Sip in north and western India, we didn’t use any major marketing technique and instead relied primarily on strengthening our relationships with distributors and trade channels in rural and semi-rural areas. After gaining a good amount of visibility, we decided to scale up and cater to pan India markets. Since, our initial focus was to capture tier II/III cities we did a survey and found that Sunny Deol had a good resonance with not only the potential consumers but also the trade partners. Sunny’s image as an action and patriotic hero among the masses revered well with our product that was propped up as ‘Made in India’ and ‘for the masses.’ With Sunny Deol on board, ‘Mango Sip’ has received the visibility across India that we were looking for.
Fruits Up’ brand is a differentiated brand as it contains fruit and fizz. In addition, the non-fizz version of the brand contains more fruit pulp than the competition. So, to reach out to the target group, which happens to be urban consumers, we wanted to rope in someone with a strong youth appeal. Actress Taapsee Pannu, who has worked in Hindi movies like Baby, Pink, Naam Shabana and in the south Indian film industry, augured well with the Fruits Up brand as both are young and emerging stars in their own way. Fruits Up is targeted at the urban consumer who, while being health conscious is open to try new things. Also, since last year, we have ramped up our expansion in the southern markets and with her large fan following, Taapsee has helped ‘Fruits Up’ reach out to potential consumers. In May 2107, we launched a TVC campaign for Fruits Up. Keeping its target audience in mind, the campaign was anti-dowry with a touch of humor.
The company launched Manpasand ORS fruit drinks with energy-replenishing qualities (apple and orange flavors) in July 2014. It is targeted at northeastern markets. To create a buzz about the product we signed Olympian and Member of Parliament Mary Kom as the brand ambassador. Since the product is of nutritional value, Mary Kom’s persona resonated with it. In addition, the fact that she is a well-known Indian role model belonging to North East is a big asset for us. In future, we do plan to offer Manpasand ORS across India and the popularity of Mary Kom will help in this process.
How do you hope to expand your distribution network after tie-up with Parle Products?
The core strength of Manpasand Beverages has been the Company’s strong distribution network in all parts of India and its presence in the rural and semi-urban markets. Further, we have embarked on a path to create innovative beverages for the masses, which are not only affordable but also nutritious. In this context, we have tied-up with Parle Products - makers of Parle G - to increase our footprints.
Manpasand Beverages will have access to Parle’s 4.5 million outlets pan-India for Mango Sip. In this association, both companies will cross-promote brands. A pilot of the said partnership is already underway in eastern India where 2 lakh outlets of Parle Products have been roped in by Manpasand Beverages. We have introduced a new packaging for Mango Sip, Mango Sip Gold, for this partnership. Under this association, Parle G packs and Parle’s Wafers will be offered along with Mango Sip’s various SKUs.
What kind of market share are you trying to grab?
Currently, our market share is about 10 per cent. By 2020, we are working tirelessly to gain at least 25 per cent. This would include both rural and urban markets.
RBI has given a nod for 49 per cent FII stake in Manpasand from 24 per cent. Brokerages are giving a Buy to Manpasand. Your comments
As a growing publicly traded company, it is always good news when our share prices soar.
In the next 3 years or so, we want to cross over the Rs 1000 cr turnover mark and are working aggressively increase our footprints by making our products available in all markets. So, we are exploring options on all fronts to achieve that target.
You are planning to double your production capacity in Vadodara, Varanasi and Sri City. Please talk about your investments and the quantum of growth you are looking at.
The Company aims to grow aggressively across India and continue to delight customers to superior quality products at affordable prices. In order to do so, we have to expand our capacity and at the same time keep our logistical costs low. These three new plants will not only help in formalising our expansion strategy, but will provide the opportunity to have a stronghold in newer geographical markets. With an investment of over Rs 500 crore, the upcoming plants will increase the production capacity from around 1.5 lakh cases per day to 3 lakh cases per day by end of 2018. Construction of Vadodara plant is near completion while the other two plants will be completed in another 6-7 months.
Also, we will be finalising the location of another new plant in the eastern
region, most likely in Odisha or Jharkhand, in a month or two.
In mid 2016, we completed construction of our manufacturing unit near Ambala, Haryana, and also finished modernization of Vadodara and Varanasi facilities. Currently, Manpasand has five operating manufacturing facilities located in various parts of India: two at Vadodara in Gujarat, one in Varanasi, UP, one in Dehradun and one at Ambala in Haryana.
What has been your revenue model?
Today, Manpasand is one of the country’s leading fruit juice players with Rs 730 crore plus net sales in FY17. We are the only listed company in the Indian beverages sector. Mango Sip, launched in 1997, is the company’s flagship product, contributing 80 per cent to revenues in FY17.
Today, Mango Sip has a 10 per cent market share in the mango drink segment and is the fourth most preferred mango drink brand in India. In coming days, we are hopeful that this share will increase to 22 per cent.