Fruit juice war hots up as new players enter fray

Fruit juice war hots up as new players enter fray

Author | Source: The Economic Times | Monday, Jul 10,2006 7:28 AM

Fruit juice war hots up as new players enter fray

Is a price-war waiting to erupt in the packaged juice segment? The entry of Rasna, Priyagold and Seabuckthorn into the fruit juice business may kick off a price war, believe many. While some players have slashed prices, others have launched consumer promotion blitzkrieg to lure consumers and increase their share in the Rs 300-crore Indian fruit juice segment, which is growing at an impressive rate.

Dabur's Real, which dominates the segment and PepsiCo India's Tropicana, have started doling out various incentives to counter competition. Tropicana has started offering 200 ml free drink on certain purchases. Real, on the other hand, gifts glass tumblers with particular purchases.

“The segment has seen a steady growth driven by increasing health consciousness among consumers. With the rising popularity of fruit juices, this category holds a lot of promise for new entrants as this would help expand and grow the category faster by attracting more consumers to it,” says Amit Burman, CEO, Dabur Foods.

“We believe that it is trust of our consumers that would help us overcome the challenge of low priced brands,” he says. While Dabur has no immediate plans to slash prices, executives at Pepsi Co India say the company is “open to all kinds of possibilities”.

Of the Rs 1,500-crore non-carbonated drinks segment market, fruit drinks comprise about Rs 1,250 crore, while the rest are fruit juices. The fastest growth is being observed in the fruit drinks segment at 45%, while the fruit juices segment is witnessing a growth of over 30% a year, say industry sources.

In the past 12 months, at least three new entrants Rasna, Priyagold and Mohan Meakin's Gold Coin have stirred up the segment. Still, there are at least a couple of more players who have lined up new launches. “With the rise in the number of players in this segment, the pie has widened, resulting in healthy competition,” says Geetu Verma, executive director (new business), PepsiCo India.

Mohan Meakin, which recently launched juices, nectars and drinks, too has started selectively offering incentives in high-volume markets. “We have just re-launched Gold Coin. With the competition hotting up we have identified markets with good volumes to offer incentives, including discounts,” said Vinay Mohan, MD, Mohan Meakin.

Will the price war get fiercer? “It depends. At the moment, we are not going to slash our rates any further. However, we'll decide on that when such a situation arises,” says Piruz Khambatta, CMD, Rasna, who claims he has already made a big dent in the share of the big players.

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