Cola wars are all set to make way for a possible fight in the health drinks business, with the segment growing at a commendable 20-25% in recent times.
Stagnant growth in the cola market fighting various controversies and an increasing health consciousness among Indians have also forced industry majors to shift focus on this segment.
Companies have increased spends on advertising their fruit juice brands by 25-30%, and are expanding production capacities as well. According to industry officials, Coca-Cola may soon be test-marketing its global fruit juice brand Minute Maid, leading to a fierce competition between cola majors, Indian companies and importers.
Says Geetu Verma, vice-president (new businesses), PepsiCo India, “In this segment, we are growing faster than the market and we are currently evaluating our options for expansion in order to keep pace with the growing demand.” The company has shortlisted a few places in the North and currently has a manufacturing capacity in Baramati, situated off Pune.
According to ACNielsen estimates, of the overall Rs 615-crore (traditional and modern trade in urban markets) non-carbonated beverage market, fruit and nectar juices comprise Rs 112 crore, while the balance Rs 503 crore comprises fruit-based drinks.
Dabur's Real is the market leader in this segment with a 60% share followed by PepsiCo's Tropicana which has a 33% share. In the fruit-based drinks category, Coca-Cola's Maaza is the leader with a 33% market share followed by Parle's Frooti and PepsiCo's Slice with
27% and 13%, respectively. “The growth is 26-27% in the fruit juice segment, which is much faster than the 11% growth in fruit-based juices. The growth potential is a CAGR of 30% over the next five years, but pricing remains a barrier since the average cost is Rs 65 per litre,” says Anand Singh, director client servicing, ACNielsen.
Imports seem to be on a growth curve as well. Leading importers say that there has been a 25-30% increase in demand from retailers for brands like the South African brand Ceres and US-based Dr Pepper. Another segment, which as of now comprises only a small fragment of the overall juice market, is sports drinks - Red Bull and Gatorade.
The category requires marketers to create and cultivate a demand in order to boost sales. “We plan to increase our advertising and promotions spends significantly, but the focus right now is on grassroot marketing like educating the consumer and getting the product tried by sports people,” adds Ms Verma.
In order to increase their bottomlines, fruit juice marketers are targeting places like gyms, night clubs, BPOs, among other youth hangouts and places of interest for the health conscious consumer. From a modern trade perspective, Damodar Mall, president, Food Bazaar, says that the growth for this category is 100% higher than last year.
“The growth in fruit juices is very rapid and in value terms it is double that of the tea market. Every month sales are larger than all colas put together. Existing players are bettering promotions in the modern trade format in order to target a large consumer base, while players like Rasna and Priya Gold are getting into this segment too,” he adds.