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For a share of the juicy pie

For a share of the juicy pie

Author | Source: Business Line | Thursday, Jun 08,2006 6:31 AM

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For a share of the juicy pie

The cola controversy and growing awareness of health have resulted in a shift towards better food habits, prompting consumers to look for healthier alternatives to quench their thirst.

Cola wars are now passé. It's the players in the juices segment who are now flexing their muscles to cash in on this fast-growing category. In fact, with the juices segment seeing continued double-digit growth, not only are existing players sharpening focus on this category but also, a plethora of new players are jumping on to the bandwagon. Over the past year, the market has seen several domestic players, both small and big, making a beeline to enter the segment. The list of new entrants includes Seabuckthorn Indage Ltd, makers of Leh Berry juice and seabuckthorn nectars, Coco Foods and Balan Foods (makers of B Natural juices), who are all offering products including seabuckthorn, blackcurrant, melons and guavas apart from the staples such as orange, pineapple, grapes and mangoes.

Besides the new kids on the block, players such as Dabur Foods, PepsiCo, PriyaGold and Rasna are sharpening focus on the juice business. The reasons seem obvious enough. According to industry estimates, of the overall Rs 615-crore non-carbonated beverages market, fruit juices and nectars account for Rs 112 crore, while the fruit-based drinks account for the remaining Rs 503 crore.

Market analysts point out that the 25-30 per cent growth seen in the juices segment during the past year speaks of immense untapped potential as a result of which many regional players are now flocking to it.

Take, for instance, Rittal Impex Ltd (makers of Coco Juices), which recently forayed into the segment. The company is looking to promote its drink and has appointed nearly 200 distributors in the Northern part of the country alone. Says Pradeep Khanna, the company's Managing Director: "The opportunity is huge. We are targeting around Rs 40- to 50-crore turnover in the next few years from the juices business." The company also wants to export juices to other Asian and EU markets. Besides retailing juices through department stores, Khanna says institutional sales could also emerge as a volume spinner. "We are targeting selling our products in railway stations and airports, which makes for a good business proposition," he says. Surya Foods and Agro Ltd, manufacturers of Priyagold biscuits, too forayed into the juice segment last year. It has set up a Rs 25-crore manufacturing facility in Greater Noida. Branded Freshgold, the one-litre juice in cartons, is available in supermarkets and malls in and around Delhi for Rs 60.

Says B. P. Agarwal, Chairman, Surya Foods and Agro Ltd: "Last year, we recorded sales of Rs 1 crore, but this year, we are aiming for Rs 25 crore-30 crore." The juices are currently available only in the Northern markets; the company is planning to launch them in the South next month. It has earmarked around Rs 3 crore for promotion.Bangalore-based Balan Natural Foods has launched four varieties of fruit juices, hoping to grab a slice of the lucrative market. The company, which clocked a turnover of around Rs 10 crore last year, is looking to double the figure by this year, says a company official. The company markets its range of beverages under brand names Miruna, Yo, B Natural, and Mougli. Under the brand names Miruna and Yo (which is a yoghurt drink) there are five flavours: mango, strawberry, apple, orange and mixed fruit. The B Natural brand is a natural fruit drink and is available in seven flavours. The company also has a natural vegetable juice made of carrot, tomato and beetroot.Another entrant is Seabuckthorn Indage Ltd (SIL), a part of the Indage Group. The company has based its products on the `wonder-fruit' seabuckthorn and has launched various flavours including a pineapple-apple combination, apple-peach, mixed fruit, orange and blackcurrant. Says M.S. Dhanota, President, Seabuckthorn Indage Ltd: "We are targeting making juices a Rs 30-crore business and aim to capture around 5-8 per cent of the market by the year-end."The company plans to spend around Rs 50 lakh -70 lakh on below-the-line marketing activities. The company has set up an R&D facility in Shimla with an initial investment of Rs 25 crore. Though SIL doesn't have a manufacturing facility of its own, it plans to set up one in the near future. Currently, juices are being processed and packaged at the Godrej Foods' plant in Bhopal.

Why the sudden interest in this market? Analysts say this segment is growing at a much faster rate (around 27 per cent), which is hard to come by in any other FMCG category. While new players such as Seabuckthorn Indage, Balan, and Rittal Impex are growing at 15-25 per cent, established firms such as Dabur and Pepsi which have a slice of 60 per cent and 33 per cent respectively boast of about 30 per cent growth rate.Furthermore, the industry is also riding high on the back of the cola controversy and the growing awareness of health, which in turn has resulted in a shift towards healthy food habits. "With the health and wellness trend gaining momentum in the market, consumers are looking for healthier alternatives to quench their thirst," says a marketer. No wonder many players are rolling out products/sub-brands positioned on the health plank.

Consider this. The market leader, Dabur, introduced three flavours in its summer drinks brand, Coolers, which includes lemon-barley, watermelon-mint and rose-litchi. Rittal Impex has launched Coco Juices in apple-banana and honey-lemon flavours. Seabuckthorn Indage has launched apple-peach, pineapple-apple and blackcurrant flavours with seabuckthorn fruit as the base, which is claimed to have medicinal and stress-relieving properties. Pepsi is gearing up to launch more variants under its Tropicana brand, while Rasna revved up its summer activities with its recently launched Juc-Fit. "One of the important tools in the hands of a company to distinguish itself from its competitors is testing the product mix by launching newer flavours," says an industry watcher, adding that this strategy is proving to be successful. At present, according to industry estimates, Dabur's Real is the market leader in the juice segment with a 60 per cent share followed by PepsiCo's Tropicana, which has an estimated 33 per cent share. In the fruit-based drinks category, Coca-Cola's Maaza is the leader with a 33 per cent market share followed by Parle's Frooti with 27 per cent and PepsiCo's Slice with 13 per cent. However, with newer players entering the juices arena, the market dynamics are bound to change.

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