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Fruit beverages industry set to boom
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Saturday, 28 April, 2007, 08 : 00 AM [IST]
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Dhwani Pandya, Mumbai
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tal store and you will find hordes of packaged juices piled up on the shelves with eye catching, refreshing and attractive packages fighting to grab the attention of the consumers. However, this was not the case some five years ago. Retail stores had handful of brands and that too in limited flavours. However, in last five years a lot has changed for the fruit based beverage market, many new players have entered and the consumers' aspirations have gone up. The fruit-based beverage market is growing at an average rate of 25-30%. India the second largest producer of fruits and vegetables has very low processing levels of 2%, which shows the great opportunities in fruits processing.
The total fruit-based beverages market is close to Rs 1,600 crore, out of which the fruit drink segment is estimated at Rs 1,250 crore, while juice segment is Rs 350 crore. For the record, juices have 85% pulp content or concentrate, fruit nectar 35% and fruit-based drinks have about 16% pulp content.
About 90% of the fruit juices market in India is unorganised with the dominant supplier being the ubiquitous street-side vendor who sells fresh fruit juices. The remaining tenth of the market is addressed by the organised sector through packaged juices that uses the pasteurisation process, a time and temperature-controlled heat treatment to destroy microbes. Thus 90% of the market is still untapped and there is a huge opportunity for the juice industry to evolve from being seen as a commodity to being seen as a branded segment.
"Innovative tetra packs and aseptic packaging have offered a solution to provide fruit juice practically fresh and preservative free which has helped manufactures to address the consumer's concern of freshness," said an industry expert. However, the concern still remains as Paul Thachil, CEO, Mother Dairy, which promotes Safal Juices says, "Fresh juices are still preferred largely by people. People still have this mind barrier that packaged juices are bound to have preservatives added into it." However, this is not the case with the fruit drink segment as they are widely accepted and forms a major part of the overall fruit-based beverage industry. Thachil told Food & Beverage News, "The bigger challenge for the industry will be to make the juice consumption a daily habit and part of regular diet."
The companies like Dabur, Pepsi, Coca-Cola, Godrej Beverages & Foods Ltd, Parle Agro are some of the major and established players. In the last three years several new brands like Mother Dairy's Safal Juices, Seebuckthorn Indage's Leh Berry, Mohan Meakin's Gold Coin, Fresh Gold from Surya Fresh Foods and Coco Joos from Rittal Impex have entered the fruit beverages market.
With a market share of 57%, Real is the largest brand in the natural fruit juice segment, where in the other brands include Tropicana 24%, Godrej Xs 3%. In the fruit-based drinks category, Coca-Cola's Maaza is the leader with 37% market share followed by Parle's Frooti with 27% and PepsiCo's Slice with 13%. However, with the entry of new players the market dynamics are bound to change.
Challenges
The price is prime concern especially for the premium and 100% juice category, informed Thachil. The rising cost of raw material and packaging results in rising cost. However, the industry is now trying to offer different packaging to suit different price points while simultaneously working on ways to offer better quality and improved taste. For instance, all the leading premium juice brands like Dabur's Real and Pepsi's Tropicana are available in 200ml pack ranging from Rs 15 to Rs 25. In the case of fruit drink segment Parle's Frooti was recently launched in a conical Tetra Pak at a meagre Rs 2.50 in order to have larger penetration. Mango-based drinks like Slice and Maaza are now available in convenient packaging of PET bottles within the price range of Rs 22.
When several new players are entering the industry how a company can differentiate itself? "One of the important tools in the hands of a company to distinguish itself from its competitors is testing the product mix by launching new and innovative flavours," says an industry expert. Identifying this opportunity, several companies have come up with new and exceptional flavours in both juices and drink category. Dabur on the 10-year celebration of its Real brand launched Pomegranate and Musambi flavours. It also launched a range of fruit soya juices in exceptional flavours like Black currant, Peach, Apricot and Apple-Kiwi.
Major Players:
Dabur Foods: Dabur Foods recently unveiled its future plans for is three major brands namely Real (Fresh fruit juice), Active (healthy fruits and vegetable juices), and Coolers (summer drink). It will invest close to Rs 100 crore every year for developing its three major brands. "Beverage will be our focus of growth. The premium juice category, where we are leaders, will grow at 20-25%," Sanjay Sharma, GM sales and marketing, said.
"We would like to double our turnover to Rs 425 crore by 2010," claimed Sharma. Over the next three years, the company will focus to have a CAGR (Compound Annual Growth Rate) of 25%. In the coming summer the company will be driving Coolers brand through extensive sampling and will try to grow this brand aggressively. Coolers are summer drinks made from summer fruits and are offered in four variants like Aampanna, Rose Litchi, Watermelon Mint and Lemon Barley. Dabur recently launched Real Junior fruit juices in vibrant packages targeted at kids.
Coca Cola: The cola giant this year launched Minute Maid, the world's leading juice drinks brand in Andhra Pradesh, Tamil Nadu and Karnataka. The brand has already crossed the one million sales mark in the first month of its launch, informed an official spokesperson of Coca Cola. It also has other leading fruit drink Maaza.
Pepsi: Pepsi has juice brand Tropicana, juice drink Slice and sports drink Gatorade in its beverages portfolio, and is aiming to strike a balance between its carbonated soft drinks (CSD) and non-cola sales. Currently, Pepsi's cola portfolio contributes 60-65% to its sales in the country. It aims to bring the cola to non-cola sales ratio to 50:50 in another 3-5 years. "Our focus is on healthy, tasty and affordable products. We are looking at healthy whites (milk-based and soya products), value-added water like Aquafina Alive, which has been launched in the US, and more juices and juice drinks," Abhiram Seth, excutive director, recently told a leading daily.
Godrej Beverage and Foods Ltd: The company has Xs range of fruit juices, Jumpin range of fruit drinks. The company recently revitalised the brand profile of Jumpin with an innovative and fresh Integrated Marketing Communication (IMC) plan to tap the rapidly growing drink market in India. With a tagline "Jumpin Sip Sip mein BOING," the new specially designed package of Jumpin targets children in the age group of 5-12 years. During the press conference held for the launch of new Jumpin, A Mahendran, executive director, GBFL, said, "The fruit drink market in the country has been growing at approximately 30% per annum for the last two years. We plan to capture 10% of the market in the first year, by going all out with our IMC plan, which includes the new ad campaign, sampling, ground promotions and tie-ups. GBFL's recent joint venture with world leader confectionery manufacturer Hershey's will also roll out beverages belonging to Hershey's portfolio.
Parle Agro: The company holds one of the most popular fruit drink brand Frooti, which was launched in
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