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FMCG majors set to stir up beverage market

FMCG majors set to stir up beverage market

Author | Source: Business Standard | Thursday, Nov 24,2005 8:46 AM

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FMCG majors set to stir up beverage market

Domestic FMCG major Dabur is test marketing its herbal malted beverage in West Bengal before its nationwide launch next year. With this the company aims to expand its product portfolio and gain foothold in health food beverages market.

“We are test marketing a chocolate flavoured herbal malt beverage in West Bengal which we plan to launch nationally next year,” said Sharad Goel, spokesperson, Dabur.

Horlicks, with 70 per cent share in the 82,000-tonne (per annum) market, has also been trying to increase its base with introduction of new flavours, biscuits and finally installing vending machines earlier this year.

“Vending is a strategic initiative being driven by the company as it is a fabulous way of not only inducing trials but also keeping the brand contemporary. We have just placed in excess of 1000 machines with very encouraging feedback and are keen to drive this business as we move forward,” says a company spokesperson.

India is the worlds largest consumer of malted or health food beverages, accounting for almost 22 per cent of the total global consumption. Despite this, the Rs 13 billion market has been relatively stagnant in India with penetration levels of only 6 per cent.

Kunal Motishaw, an equity analyst with Equitymaster says although growth opportunities in the sector are tremendous, it has been growing in single digits at about 7-9 per cent per annum.

“Although Glaxo Smithkline (GSK) has taken initiatives by launching smaller packs of 100 gm for rural markets in Tamil Nadu and West Bengal, sales have not picked up as per expectations.” Traditionally these areas contribute a bulk of the sales for the companies.

According to him, since children are the key drivers in the category, brand positioning would play an important role in performance of the products.

This is the reason why brands such as Boost, Complan and Bournvita have over the years ensured that their communication, either advertising or associating with events, programmes have been the kind that go down well with kids.

At present the white beverages account for almost 65 per cent of the total revenue as they are considered therapeutic products and the browns mainly considered taste additives. Other players in the segment include Nutramul, Milo, Maltova and Viva.

Tangy flavour

India accounts for almost 22 per cent of the total global consumption

Quite contrary to this the Rs 13 billion market has been relatively stagnant in the country with penetration levels of only 6 per cent

Although growth opportunities in the sector are tremendous, it has been growing in single digits at about 7-9 per cent per annum

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