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Parachute: Innovations through Bottles

Capturing millions of hearts and a place in every household with the tagline “Inn Baalon Mein Jaan Hai” (There is life in this hair), Parachute hair oil, from the Marico company, is the first brand that comes to mind when one utters the word “coconut oil”.

Marico Limited, Parachute’s Parent company is an Indian multinational consumer goods company focusing on health, beauty, and wellness products. They are present in over 25 countries across Asia and Africa. Their products include well-known brands beyond Parachute oil, such as Nihar Naturals, Set Wet, Livon, Saffola, True Elements, and FITTIFY.

The Story of Parachute begins in 1947. Vallabhdas Mariwala, a spice merchant trader, and his four sons founded Bombay Oil Industries Limited (BOIL) with four manufacturing units across India. These units included a plant in Sewri for extracting coconut oil from copra, a vegetable oil refinery in Mazagaon, a chemical plant in Bhandup, and a spice extraction plant in Kochi. Their coconut oil was sold under the brand name “Parachute”.

Harsh Mariwala, one of the sons, observed that distributors in Nagpur and Kolkata were repackaging Parachute oil into smaller packs and selling them at high prices. This realization led him to explore untapped potential in the retail market across India. Harsh also believed in the superior quality of their brand.

This insight sparked the first innovation for Parachute- switching from 15-litre tins to smaller, retail-sized tins. This change effectively captured the retail market, significantly strengthening their position. Recognizing the power of packaging, Harsh saw potential in plastics. They were cheaper than tins, easy to pour, and visually appealing on shelves. Parachute, therefore, led the way for the market shift from tin containers to plastic bottles.

A battle with Rats

With new ideas arise new problems. Parachute’s shift to plastic bottles, while innovative, presented a surprising challenge: rats. The enticing combination of plastic and coconut oil proved to be irresistible to these little thieves, who would gnaw through containers stored in shops, leading to significant product loss. To combat this new obstacle, they developed a round-shaped bottle. This design served a dual purpose: it prevented oil leakage and made it difficult for rats to grip and bite through. To build confidence among retailers hesitant about the new packaging, Harsh conducted a clever experiment. He locked several rats in a cage with the new bottles of oil. The results were clear- the frustrated rodents were unable to breach the packaging.

Breaking Market Resistance

This innovative solution, along with the visual proof of the rat experiment, slowly chipped away at the market resistance. While it took about ten years to fully convert the market from tin to plastic, Parachute’s perseverance paid off. The new packaging not only addressed the rat problem but also offered cost advantages due to cheaper materials. These savings allowed Parachute to invest more in advertising, further solidifying its brand presence.

Challenges and Innovation

Parachute’s journey wasn’t without its hurdles. While they battled the rats, they also faced fierce competition from rivals who mimicked their designs. This resulted in a significant drop of around 20% in sales. To combat this, Parachute implemented a two-pronged strategy.

First, they partnered with international designers to create unique moulds for their bottles. These moulds incorporated a distinct mark- a tiny dent shaped like an oil drop- that served as a symbol of both authenticity and purity for their product. This subtle yet effective design element helped consumers differentiate Parachute from its imitators.

Secondly, Parachute recognized the need to expand its product offerings. They went beyond their pure coconut oil and introduced a range of new hair care.

  1. Parachute Advanced Hair oil: Combination of 50% coconut oil and 50% mineral oil, catering to the needs of those seeking a blend.
  2. Parachute After Shower: This product addresses the growing concern of hair fall, offering a targeted therapy.
  3. Parachute Advanced Starz: This is specifically made for children aged 3-10.

By focusing on innovative packaging, product diversification, and strong marketing strategies, Parachute successfully navigated the challenges and solidified their position in the market. Their reach extends beyond India, with products available in Bangladesh, Egypt, and the Middle East, making them a truly global brand.

The art of label

Parachute’s story also involves a clever tax strategy. They do not mention “hair oil” explicitly. This minor detail holds a significant meaning. In India, cosmetic products (28%) have 8% higher tax than edible oil (20%). Additionally, they obtained an FSSAI (Food Safety and Standards Authority of India) mark to solidify their claim of being an edible oil.

State governments of Kerala and Tamil Nadu questioned the rationale behind selling “edible oil” in small packets primarily used for hair care. Parachute countered by highlighting their focus on students and bachelors, for whom smaller sachets were more convenient. However, the government’s Central Board of Indirect Taxes and Customs (CBIC) responded by classifying all products below 250 mL as cosmetics and imposing a higher tax rate.

Unwilling to back down, Parachute filed a petition in Supreme court. They argued about the product’s inherent nature as an edible oil and won. This legal victory allowed Parachute to continue selling coconut oil under the lower tax bracket.

Building Brand Loyalty

Parachute’s success can be attributed to several factors, including its unwavering commitment to product purity, quality, and transparency. This dedication has earned them the trust and loyalty of generations of customers.

 Parachute leverages a multi-channel marketing strategy to reach a wider audience. They utilize television commercials, outdoor advertising, and digital platforms to connect to consumers. Recognizing the importance of rural markets, they also employ innovative van campaigns to promote their brand directly. Parachute’s advertisements often evoke a sense of nostalgia, connecting viewers to the time-honored hair oiling in Indian culture.

The biggest success of Parachute as a leading brand in coconut oil in India is through its innovations, brand positions, marketing strategies, and catering to consumer needs.

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