31 Aug 2021 20:30 IST

Amul must work to fizz things up for Tru Seltzer

Positioning the product differently can help the brand cash in on the first-mover edge against competitors

In October 2020, in major product diversification, India’s leading home-grown dairy brand Amul entered the carbonated drinks space in India with the launch of ‘Tru Seltzer’, said to be India’s first seltzer. Marketed as a healthy beverage, Tru Seltzer was a mix of real fruit concentrate, milk solids, and fizz. However, industry observers pointed out that Amul’s entry into the carbonated drinks segment with a seltzer could be risky as it might not appeal to the health-conscious consumers and to Indian palates. Also, seltzers were still not a distinct category in the Indian beverages market and the challenge was for it to create a space for itself, they said.

Amul’s wide variety of products is associated with value for money, quality, affordability, availability, and nutritional value. Amul, which was initially synonymous with milk-based products, later began expanding its portfolio to include ice-creams, paneer, chocolates, and sweetmeats. Amul also forayed into frozen foods and ready-to-eat meals (Happy Treats), edible oil (Janmay), and bakery items (Amul Fresh Bakery).The brand reportedly introduced about 101 products between 2015 and 2019.

Tru Seltzer’s debut

In February 2019, with an eye on strengthening its beverage product portfolio, Amul forayed into the Indian beverages segment with the launch of the ‘Tru’ brand, a fruit-based milk beverage. It differentiated Tru fruit juices from regular sugary fruit drinks by blending milk solids with fruit concentrates to offer milk-based fruit nutrition in attractive packaging, and at an affordable price .

In fiscal 2019-20, the Amul brand registered a record turnover of ₹52,000 crore, according to the Gujarat Cooperative Milk Marketing Federation (GCMMF). The sales turnover jumped by nearly five times from ₹8,005 crore in 2009-10 to ₹38, 542 crore in 2019-20. Amidst the Covid-19 outbreak in early 2020, Amul launched several immunity-boosting products in the health drinks space — haldi doodh (turmeric flavoured milk), ginger flavoured milk, tulsi doodh (tulsi flavoured milk), and haldi ice cream (turmeric flavoured ice-cream). According to media reports, Amul launched 58 new products between April 2020 and December 2020.

Carving a niche

The history of the seltzer, a carbonated drink, dates back to the 1700s. At that time, carbonated water found near springs was used as medicine to cure diseases in Germany. Later, in 1787, the people of a German town Niederselters started bottling and exporting the carbonated water, and hence the name ‘Seltzer’. In the 19th century, people started adding seltzer to milk either as a refreshment or as a tonic to cure diseases.

Amul identified a gap. There wasn’t much innovation happening in the Indian carbonated drinks market and consumers were also moving away from sugary beverages that contained only water, sugar, and fizz. The brand decided to explore the carbonated beverages space amid the growing demand for beverages in India. The carbonated soft drinks market in India was valued at $13,096.5 million as of 2021. Amul researched deep into this category and found that the seltzer, which originated more than 300 years ago, had never been explored in India.

Moreover, seltzers had emerged as one of the fastest-growing soft drink categories in the Western countries, especially during the Covid-19 pandemic, when anxious consumers had turned to health and immunity enhancing foods to keep the disease at bay. As seltzers contained milk, Amul decided to position it as a healthy beverage to consumers.

Unique positioning

Amul launched Tru Seltzer, an extension of its Tru brand of fruit juices, on October 18, 2020. Globally, seltzers were made with the infusion of juices and interesting flavors. Amul’s Tru Seltzer was a mixture of real fruit juice, milk solids, and fizz. Introduced as a healthy and tasty beverage targeted at young Indian consumers, it was affordably priced at ₹15 per 200 ml PET bottle. Tru Seltzer was available in two flavors: orange and lemon. According to the company, Orange Seltzer had 10 per cent orange juice and 10 per cent added sugar while the Lemon Seltzer contained 5 per cent lemon juice and 9 per cent added sugar.

Tru Seltzer was positioned as a healthier alternative to the aerated drinks available in the Indian carbonated drinks space. The company stated that the drink was suitable for consumption by people of all age groups. Initially, Tru Seltzer was launched in Gujarat and was later rolled out to other cities across India.

Amul Tru Seltzer was introduced in the market through a well-planned communication and point-of-sale marketing strategy that included outdoor advertising and a teaser campaig. The product was initially launched in Gujarat through a virtual launch event in which more than 350 distributors participated. An exclusive website www.amulseltzer.com was launched to provide information about the product. Ads highlighting the product proposition "Dairy, Fruity, Fizz" were aired on TV and posted on social media. As part of an outdoor ad campaign, a teaser was released across major cities of Gujarat a week before the launch of the beverage. The teaser went viral and evoked a lot of curiosity among consumers.

 

 

 

Hoardings were displayed across the State that read "Is it a shake?" "Is it a Cola?" and "Is it a Juice?" Around 20-30 signboards (LED displays) of ‘Amul Tru Seltzer’ were displayed at Amul parlours and other locations. Going forward, Amul plans to launch the drink pan-India and roll out new variants such as Cola, Jeera, and Apple, in can packaging.

Challenges

According to industry experts, capturing the carbonated drinks space through Tru Seltzer would be a challenge for Amul due to the tough competition it would have to face from more established beverage giants such as PepsiCo and Coca-Cola. As of March 2020, in the non-alcoholic beverages segment in India, Coca-Cola enjoyed a 50 per cent share of the market while PepsiCo had 19.6 per cent. sAccording to some analysts, Tru Seltzer’s key ingredients — citrus fruits (orange, lemon, etc.) and milk — were not seen as complementary and it was largely believed that the acidic nature of citrus fruits would cause milk to curdle. This perception was largely validated in the Indian consumers’ minds by research.

Seltzer was considered a hard drink in the US, while Amul positioned it as a soft drink in India. Some analysts felt that this might lead to a confusing positioning and the product might get limited to a niche. Moreover, making it appealing to the masses might be difficult. Some analysts also observed that seltzer was not a distinct product category yet in India and the responsibility for defining it would also lie with the brand.

Analysis

The case focuses on the dynamics and risks involved in entering a new market segment and how a brand can reinvent itself through a successful brand extension strategy, in which a successful brand name is used to launch new or modified products in a new category. The best result is one where the extension enhances the core brand and boosts the sale of both existing and new products.

Amul is a leading dairy brand in India with a diverse product portfolio. With a slew of new product launches and brand extensions amidst the Covid-19 pandemic, the dairy giant looks set to reinvent itself. The launch of Amul Seltzer in the Indian carbonated drinks space is a bold innovation from the company and reflects its commitment to strengthening its beverage product portfolio.

Why Seltzers?

  • It wanted to explore the carbonated beverages space amidst the rising demand for such beverages.
  • It sought to introduce an innovative product in the carbonated beverage space as there was not much innovation happening in that space.
  • Seltzers had, at one time, emerged as the fastest-growing category in Western countries.
  • Seltzers had started gaining prominence as an immunity-boosting health drink amidst the Covid-19 pandemic.
  • As Tru Seltzer contained milk and dairy, Amul launched the seltzer to offer consumers a healthy and tasty beverage.
  • It sought to target health-conscious consumers. The carbonated drink space in India is loaded with aerated drinks made with artificial flavours and colours. Amul positioned Tru Seltzer as a healthy and tasty drink with the goodness of milk whey, fruit nutrition, and soda.

Success or failure?

That the product came from a home-grown brand, and enabling factors such as affordability, product availability, innovative positioning as a health drink, attractive packaging and design, worked in Amul’s favour. Moreover, the brand’s strong lineage combined with the growing demand for soft drinks was an added advantage.

However, capturing the carbonated drinks space through Tru Seltzer could be a challenge for Amul as it faces intense competition from established carbonated drink brands such as PepsiCo and Coca-Cola, and from other local brands. There is a brand and category misfit as far as Amul and Tru Seltzer are concerned as a carbonated beverage cannot be considered healthy. Brand Amul is known for offering natural, trusted, and nutritious products. Tru Seltzer contains soda, which is considered unhealthy. This could dilute the brand value of Amul.

While the younger generation may welcome this move, the brand, on the whole, does not fit the Seltzer groove. Seltzers are seen as a ‘hard’ drink in the US. Tru Seltzer, as the first seltzer in the Indian market, does not have much of a probability of excelling as an aerated drink, because of the lack of awareness about the health benefits associated with seltzers. Amul wants to pitch the product to the masses but with a confused positioning, it will only get limited to a niche.

 

 

 

Another huge challenge for Amul is to break the Indian myth that milk and citrus fruits do not complement each other. Tru Seltzer is a combination of both with fizz added. Also, the combination of dairy, fruity, and fizzy might not appeal to Indian palates. Despite the odds, it will be interesting to see whether Tru Seltzer will succeed in the highly competitive carbonated drinks market in India.


Strategies to adopt to gain market share for Tru Seltzer

Parent brand image

The attributes associated with the core Amul brand are — premium quality, traditional, trustworthy, value-for-money, and natural. These attributes can be projected onto its sub-brand Tru Seltzer to carve a niche for itself in the carbonated drinks space.

Parent brand and extension

Though Amul had milk-based shakes and fruit juices in its beverages segment, with Tru Seltzer, it has entered the carbonated drinks space for the first time. Except that milk is on the ingredient list, Tru Seltzer has no similarity with the products of the parent brand Amul. There are no substitutes for Tru Seltzer in the Amul product portfolio either.

As consumers are spoilt for choice with innumerable fruit-based drinks and health drinks available in the market, proper brand positioning is required to prevent any confusion in their minds. Tru Seltzer has to be positioned in the market by promoting the health benefits associated with seltzers.

Parent brand strength

Amul has been a market leader in the Indian dairy industry and has a strong brand image among consumers. Tru Seltzer, as a brand extension, can definitely leverage on Amul’s brand awareness, brand equity, and brand image. An omni-channel strategy should be adopted to make Tru Seltzer available to all types of consumers across the country. Tru Seltzer should be marketed to youth with an innovative and contemporary appeal of being a healthier alternative to other carbonated drinks available in the market.

Marketing support

Amul boasts of a wide supply chain network — one that reaches every nook and corner of the country. Tru Seltzer can benefit from that. Brand Amul should use its wide distribution and supply chain network to launch Tru Seltzer across the country.

Amul should roll out Tru Seltzer in metropolitan cities with a high population of young consumers, tier 2 and tier 3 cities, and even in the rural areas. Brand Amul, known for its creative and attractive marketing communication strategies in outdoor and print media, has to come up with creative ad campaigns to promote Tru Seltzer. Indian sportspersons can be hired as brand ambassadors for the product.

 

Quality of parent brand

Amul is a symbol of quality, and this needs to carry forward to Tru Seltzer too. The quality perceived by consumers will act as a benchmark for Tru Seltzer. Amul carries a 74-year legacy of being one of India’s most trusted brands with fundamental brand attributes such as pricing, availability, variety, and taste. The consumers’ expectations from any product coming from Brand Amul will be high. Tru Seltzer, with its unique, novel, and differentiating product profile, can match these expectations and emerge as a successful brand extension.

Though Amul has entered the carbonated beverages segment for the first time with Tru Seltzer, it can create a niche market for seltzers in the broader beverages segment in India. Tru Seltzer can enjoy the strategic advantage of being the first Indian seltzer in the market, that too as one coming from a trustworthy yet contemporary brand like Amul. 

 

(Syeda Maseeha Qumer is Adjunct Research Faculty, and Syeda Ikrama is Research Associate, at IBS Case Research Center, Hyderabad.)