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Can Parle Energize India’s Consumer Explosion?

Last fortnight, Parle launched a campaign with RRR stars Ram Charan and Alia Bhatt, a first for the brand with the pairing as it targeted reaching 20,000 Cr of sales

Founding Charge Called Parle

The year was 1928 in pre-independence India. 

Mohanlal Chauhan set about his entrepreneurial ambitions. He founded a confectionery company.

The first factory in Vile Parle was set up with just 12 people making confectionery such as boiled sweets. The company didn’t have a name, so it got named after where it was located. 

Parle was born. 

Their core product was sweet. A delicious mix of sweet and tangy, Orange Bite has been the nation’s favourite ever since.

In 1938, the same year that Adolf Hitler’s army marched into the Sudetenland in Czechoslovakia, the first batch of Parle Gluco biscuits was baked.

As per the laws the Parle company was only allowed to manufacture it for the soldiers at war and could not sell them to the consumers domestically or internationally.

As the war waged on Mohanlal continued to innovate, introducing Monaco, India’s first salty crackers.

The tides of war changed and the allied forces landed on the beaches of Normandy, the world was going through one of the biggest technological revolutions it had ever seen. Machines and mass production became mainstream and the Parle company was not going to be left behind.

Parle products created a 250-foot oven to keep up with the growing demand for their biscuits. It would be India’s longest oven and would pave the way for what was to come.

In 1947, when India became independent, the company launched an ad campaign showcasing its Glucose biscuits as an Indian alternative to the British biscuits.

Parle Glucose was launched as an affordable source of nourishment to counter expensive, imported biscuits in the British Raj such as Jacob’s (cream cracker of United Biscuits) and other large biscuit makers like Huntly & Palmers. Britannia, then based out of Calcutta, was strong in the east, while Glaxo glucose biscuit, also imported, ruled over the south.

The biscuit wars were on, to run for decades.

Electrifying the Family

The Parle company’s intense focus on high quality but cost-effective Glucose biscuits created a powerful platform that the Chauhan family could leverage to diversify into a wide variety of products.

Mohanlal made sure to teach his sons every trick of the trade and introduced them to the business. 

The five brothers divided workflows.

Narottam and Jayantilal handled the technological end, Pitambar took care of the financial aspect, Maneklal was the fund-raiser, and Kantilal took care of daily administration.

When India finally became Independent, the Chauhans launched their biscuits for the Indian consumers at large, they did so with an Ad campaign – “Freedom from British Campaign”. 

Within no time, Parle became a well-distributed product

Building on their success and reputation for quality products at good prices, the Chauhan family started operations for carbonated beverages as ‘Baroda Bottling Company’ which later transformed into “Parle Agro”

As more family members got involved in the business, the original Parle company was split into three separate companies, owned by the different factions of the original Chauhan family, with a majority of it owned by Parle Agro products

Parle Products was led by Vijay, Sharad and Raj Chauhan. This was the owner of the brands such as Parle-G, 20-20, Magix, Milkshakti, Melody, Mango Bite, Poppins, Londonderry, Kismi Toffee Bar, Monaco and KrackJack,

Parle Agro (1960s) was led by Prakash Chauhan and his daughters Shauna, Alisha and Nadia. Agro owned brands such as Frooti and Appy.

Parle Bisleri was led by Ramesh Chauhan, his wife Zainab Chauhan and their daughter Jayanti Chauhan. Bisleri was bought from an Italian entrepreneur Felice Bisleri, who wanted to sell bottled water in India

The Parle brand quickly became well known in independent India but the success came with drawbacks. 

Competition was on

Resistance from Knock-Offs

In the 1960s Britannia launched its first glucose biscuit brand, Glucose D, later endorsed by Amjad Khan’s Sholay avatar, Gabbar Singh in the 1970s.

Parle Gluco started feeling the heat. 

Even smaller players would imitate the packaging and adopt the suffix of ‘glucose’ in their names. People, especially those who were not literate would just ask for glucose biscuits.

Glucose became generic. Parle did advertise the differences “Often imitated, never equalled” was one of their slogans. Parle was even among the first advertisers to paint Mumbai’s train compartments with Parle Gluco ads when the Indian Railways allowed it.

To combat increasing competition, in 1982, Parle Gluco was repackaged as Parle G. 

The company had tried to battle knock-offs by imprinting the now-famous plump little girl on its packs, in the mid-seventies. It clicked with Parle G’s target audience, kids and their mothers.

Those who are active on Quora may have identified her as Gunjan Gundaniya or Neeru Deshpandey from Nagpur but in reality, she is just an illustration created by Parle’s longest-serving media agency- Everest which was created in the 1960s for Parle.

Parle wanted to sell biscuits in consumer-friendly packs, rather than leave them loose in jars. Parle resorted to importing and patenting its own packing machinery as early as the fifties.

It was the combination of their strong belief in branding and hands-on owners that did everything from procurement to packaging in-house that made it possible for Parle G’s makers to be self-reliant, build scale and maintain pricing.

The communication of the brand proposition to its target audience was done in the most creative, integrated and targeted way.

Parle focussed on two of the most functional aspects of Parle G – Taste & Energy.

This message was aptly communicated by a grandfather playing with his grandkids and singing in chorus — ‘Swaad bhare, Shakti bhare, Parle-G’ -for their first TVC showcasing how Parle-G has been the trustworthy choice for generations.

Parle, after pioneering a product and seeing imitators was now winning again. But the storms of the competition were swirling again

Globally Disruptive Currents

By 1991, India opened up to the world and introduced policies that led to liberalization, Globalization and Privatization in India.

This also meant Coca-Cola and Pepsi could reenter India after it was banned in 1977 when Janta Dal came into power. 

This ban was the key reason for Parle Agro’s aggressive growth building nostalgic brands like Gold Spot, Limca and Thumbs up.

But this came to a tragic end when Coca Cola came back to India with its cash war chest and Pepsi started buying out the bottlers who were trained by Parle starting with their Punjab units.

Ramesh Chouhan who was the CEO of the group (Parle Bisleri) had to make a tough decision to either fight the competition and risk all products including Bisleri or let go of his soft drink products and focus on other products where they had leadership positions.

In 1993, he decided to sell all except Bisleri for $40 million to Coca Cola with a clause to not compete for the next 10 years.

It was a bitter experience for Parle in the sugary water industry letting go of the Goldspot but soon they found a top spot for their gold through an aggressive marketing strategy.

By the mid-90s, after running TV commercials for a few years Parle-G understood that TV was the primary channel they must focus on to reach Indian households.

For Parle G, TV was a better media channel than newspaper as it helped Parle to reach rural populations where literacy was very low and given its rich video and audio format, TV was anyways becoming more popular than radio.

They focussed on what worked and kept scaling it up.

By 1998, Shaktimaan was a very popular show with kids and had a wide reach on Doordarshan. It was a suitable fit for Parle-G as it resonated well with the brand in terms of TG as well the value proposition of energy (Shakti).

They roped in Mukesh Khanna aka Gangadhar aka Shaktimaan to promote Parle-G.

Parle G could sense that customers are evolving and liberalisation has brought in a new sense of aspiration. 

High Potential of 4Ps

By the late 90s, Middle-class Indian families wanted their kids to grow and shine.

Become engineers and doctors. This aspiration fuelled a preference for brands that provided not only a functional value but also connected with the deeper emotions of Indian parents.

Parle-G changed gears and soon came out with the “G mane Genius” campaign in 2004.

Parle-G packaging has evolved over years starting from a nascent butter paper package (pre-independence) to a white packaging (60-the 70s) to a yellowish wax-paper wrapper during 1982’s rebranding exercise and later on to BOPP (Biaxially oriented polypropylene or plastic) by 2001.

While Packaging plays a key part in Porter’s 4P of marketing, pricing was the next piece that Parle solved brilliantly.

Post-liberalisation, there was an influx of multinationals and foreign companies started coming to India as the next big market for growth.

This led to immense competition for Parle which they solved partly through a decade long branding exercise, expanding their distribution network to over 2.5 million outlets and at the same time keeping the pricing almost constant for 15 years.

It’s not that input costs did not increase or Parle did not try to increase prices. They just understood the market dynamics and the price-sensitive customer really well. 

To combat the raw material costs (60 per cent of the total costs) and packaging costs (20-25 per cent of the total), rather than increasing prices, they slashed the pack sizes and decreased the weight of the biscuit.

From 2008 to 2009 itself, weight was reduced from 92.5 grams to 88 grams as well as the count of biscuits was reduced from 16 to 15.

A key reason for this pricing strategy is the customers here are very price sensitive and in such cases, it is better to play around with SKU size than with the price, which is more evident to customers.

To keep margins intact, strict cost control at every point in its supply chain was monitored and manufacturing outsourced partners were increased to 60 so as to optimize logistics costs.

It wasn’t only that margin pressure or competition was the only problem they had to solve. There were some internal issues as well.

Around 2007, there was a conflict between the two branches of the Parle Group which led to family tension.

Parle Group which got divided into Parle Product, Parle Agro and Parle Bisleri in the early 60s had a clear line of businesses into which they can or cannot venture.

The battle between the cousins Prakash Chauhan (Parle Agro) and Vijay and Arup Chauhan (Parle Products) started as Parle Agro diversified into confectionery, an exclusive domain of Parle Products for decades, in 2007 under a division called Parle Confi.

This led to some hiccups. But Parle’s growth both in terms of sales and brand was always on an upward trend.

FMCG’s 5,000 Cr Bright Light

India’s organised biscuit market was big enough to accommodate multiple players. Alongside Parle Products, Britannia and ITC had a nationwide presence, with a few regional players like Priya Gold and Cremica operating in their respective regions.

Parle Products had a sense of this. Parle Products focused on four core things – manufacturing, distribution, pricing, and packaging to continue to lead the market.

By 2010, Parle Products partnered with 60 contract manufacturers and had their own 10 manufacturing setups. This step ensures that the supply is available and logistics do not hinder the supply.

The next focus was on distribution. Parle Products partnered with more than 5 million stores across India. Basically, Parle manufactured products were available in more than 80% of India’s small retail stores.

Manufacturing and distribution alone will not translate into sales. It ensures that the product should be available if there is a demand. The final puzzle was consistent packaging and pricing when you scale things up.

Since its beginning, Parle Products has never relied upon fancy packaging. Instead, the focus was on simple yet consistent packaging with excellent recall value. Remember Parle-G with a girl’s face on it! 

On the pricing front, they have aggressive pricing. They had biscuits available in small packs and with a price of Rs. 2 and Rs. 5. 

The reason for aggressive pricing was that the consumers should consume Parle-G and associate with it. For example, Parle-G should be consumed with tea.

Parle-G became the first FMCG brand in India to cross sales of Rs. 5,000 crores. Moreover, the revenue generated by Parle Products was higher than the domestic sales of Dabur or Godrej consumer products. If we make the product-wise comparison, Parle-G sales were three times higher than Maggi’s.

Parle achieved this feat by selling more than 120 crore biscuit packets or 12,000 crore biscuits in the entire year. Each household, on average, consumed 400 Parle-G biscuits every year.

Parle-G increased its share from 67% to 80% in 2013. Tiger biscuits lost 15% market share during the same period in the glucose segment.

Battery of Super Brands

Consumption market size is directly proportional to a country’s population and per capita income. 

As we had observed in our D2C piece, India has large potential but is yet to get there.

In India, the problem is the low per capita income compared to countries with similar GDPs, as India’s population is much higher than other countries.

The high population countries tend to attract many global players if they feel that per capita income is growing. 

India was in a sweet spot.

But then there is another challenge for a homegrown player like Parle: competition from global/diversified FMCG players who tend to have a bigger brand and money muscle.

Parle Products faced stiff competition from Britannia and ITC. Parle Agro and Parle Bisleri were competing against PepsiCo and Coca-cola.

With low per capita income and competition from other players, building a consumer brand is challenging in India.

But each Parle company was determined to make a difference.

Parle Products had a good brand portfolio (Parle-G, 20-20, Magix, Milkshakti, Melody, Mango Bite, Poppins, Londonderry, Kismi Toffee Bar, Monaco, and KrackJack). In addition to that, Parle Products decided to play on volume rather than the value and not let go of glucose biscuit market share. 

They were banking on economies of scale. 

The strategy worked – it forced other players to shift focus on the different categories of biscuits, and Parle Products achieved 15% YoY growth for more than 5 years. 

Parle-G had 25% of the entire biscuit segment which was a massive market of Rs. 20,000 crores.

Parle Agro had a relatively new brand portfolio (Frooti, Appy, Hippo, Bailey). Apart from the brand portfolio, they faced competition from global players like PepsiCo and Coca-cola. 

Parle Agro was operating in a mango-based drink market pegged at Rs. 4,500 crores and Frooti had a market share of 30%. They focused on small size SKUs, and distribution to tier 2/3 towns and cities helped them maintain the market share. 

Using the cash flow generated through the drinks category, Parle Agro started to expand its footprint in the packaged food and confectionery market.

Parle Bisleri had a business in the niche sector, the bottled water segment. Biselri focused purely on consumer-focused advertising and efficient production. 

From quirky ad lines ‘Har Pani ki bottle Bisleri Nahi’ and ‘Bisleri is veri veri extraordinari’ to change the colours of all bottles so that consumers can differentiate, to offer products in various sizes (300 ml, 500 ml to 5 litres) so that it is affordable and can be used based on the need. 

No wonder Bisleri had 60% of the Rs. 3,000 Cr packaged drinking water market.

By 2015, Parle had two category-defining products. Glucose biscuits were called “Parle-G”. Bottled water was called “Bisleri”

Incredible that a single company was able to do that.

It was established that the Parle group was not going anywhere; it was in the consumer market for a long haul.

A 40,000 Cr Powerhouse

In the consumer business, it’s one thing to reach the masses, and it’s another thing to become profitable and maintain that status.

Even if we assume that distribution can be created by incentivizing the distributors or retailers but then how do they become profitable? And how to maintain the profitability once the company reaches that stage? There is only one way – to control costs.

There are three main costs that any consumer brand incurs. The first is the manufacturing cost, the second is the marketing and distribution cost, and the third is the employee cost.

If we talk about Parle-G, the major contributor in revenue for Parle Products was operating in a segment where consumers were very conscious about the price. So they relied on economies of scale.

Playing on a volume is very important when we talk about economies of scale. Parle Products realised this early and executed this for Parle-G.

Multiple manufacturing facilities, strong distribution, and the conscious decision not to increase the price helped Parle Products to grow the top line to Rs. 10,000 crore in 2019 from Rs. 4,000 crore a decade ago, but the net profit margin declined to 4% in 2019 from 8% a decade ago.

The sub 5% is not a norm in India’s FMCG companies. Britannia operates with a net margin of ~12%, and companies like Dabur operate with a net margin of ~17%.

That doesn’t mean that Parle Products can’t command a premium valuation. 

If we assume that they continue to grow at this pace and have an earnings ratio of 50x (per industry standards), then Parle Products commands a valuation of ~Rs. 25,000 crore.

The combined valuation of all three companies would come to around Rs. 40,000 crore if we follow the similar growth and valuation assumptions.

In the absence of premium products that can expand margins, there will be downward pressure on overall valuations. 

No wonder Parle companies are now focusing on premium products within the category, which can help the overall business to expand margins.

Surging into a $4Tn future

By 2019, India was one of the fastest-growing economies globally, and it is one of the largest producers of biscuits globally.

The organized biscuit market in India is estimated at Rs. 37,000 crores. The world was thit by the COVID pandemic. Everything stopped. 

But for Parle Products, this was the moment to be in the news again.

Consumers stocked up the packaged food at home, fearing the lockdown. Parle Products benefited. Also, many migrant workers relied on Parle-G during the first lockdown in India.

Parle’s focus on the volumes segment and competitive pricing backed by strong distribution led them to post record-breaking numbers.

In 2020, Parle Products posted a 38% increase in net sales. The revenue number of Rs. 13,000+ crore was higher than rivals Britannia and Nestle India. This also helped Parle Products to become India’s biggest food company by annual revenue.

Parle-G became the second Indian FMCG brand to gross sales of Rs. 7,500 crore in one year.

This sudden push helped the company post a record net profit margin. Parle products net margin reached sub 9% level from 4% in 2019. If a company can manage this level of margin, it will have a direct impact on valuation.

Parle Products wish to reach sales of Rs. 20,000 crore by 2025. And if the company can maintain a net margin to a level of around 8-10%, then by 2025, the total value of Parle Products will be in the range of Rs. 75,000 crores. Similar stories will play out for Parle Agro and Bisleri too.

The group could be worth north of 100,000 Crores, a solid sustainable consumer business. It would also be entering a time when India’s consumers would start meeting its promise. 

India is finally moving toward that stage where per capita GDP will cross a threshold of USD 3,000. 

It is observed that once the country crosses that threshold, the consumption boom happens. In pockets, India is witnessing that.

For Parle companies, this is the moment they have been waiting for. 

With manufacturing established, large distribution, and brand recognition, these companies will be one of the biggest beneficiaries. 

Parle’s journey indicates how a “hero” product in a “niche” market can be leveraged to build brand recall all across. The Parle G journey of creating, fighting and winning the glucose biscuit market is a lesson for consumer founders. 

As consumption expenditure in India is expected to hit $4Tn in the next 5 years, Parle would be at the forefront. 

An indigenous brand that has survived decades, the next 20 years would be the years it became a leading light. 

As India’s consumer comes of age, Parle could be energizing India.

Writing: Abhinay, Mazin, Parth and Aviral Visuals: Chandra and Omkar

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2 years ago

What a fantastic piece AJVC team!

2 years ago

Excellent piece to understand how to scale up a business in the food category , Kudos to the team…!!!

Parth Purani
Parth Purani
2 years ago

Wow what a piece of article I have just read. Thank you

2 years ago

amazing amazing read. Thank you for writing this!

Srinjoy sarkar
Srinjoy sarkar
2 years ago

Awesome content. Kudos to the team.
Reading this on a Monday morning, while having tea along with Parle biscuits, makes it more interesting.

Aditya Arora
Aditya Arora
2 years ago

That was an amazing read😀

2 years ago

Great article

2 years ago

This one almost felt like reading a little storybook. So fluid. No complications. Kudos to the team.

B Yourself
B Yourself
2 years ago


This is my first article on your website. Excellent content.

I’m happy that now in India also “wait but why” level blogs are written.


2 years ago

a well written …i learned alot

2 years ago

Amazing read!!