fruit industry
TRANSCRIPT
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Index
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INTRODUCTION
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1. INDIAN FRUIT BEVERAGE MARKET
The fruit drink market has recently witnessed expansion with the entry of several new
players. The market has been progressing in terms of product content and there are three
major product contents available.
Drinks: Juice with pulp content less than 40%
Nectars: Juice with pulp content between 40-80%
Juices: juice with pulp content more than 80%
With development in the tetra-pack market, there is a natural progression from drinks to
nectars to juices. While traditionally fruit drinks were aimed at children, the new brands like
Onjus, Real, and Life have focused on young adults and professionals. Take the case of
market leader Parle Agro which has launched Yo Frooti and Yo Appy with a new slim pack
to attract youngsters. Although fruit drinks focus strongly on out-of-home consumption, the
juices and nectars have been concentrating on takeaways or in-home consumption. With
more choice coming in, the tetra-pack market is likely to witness further segmentation.
1.1. MARKET SIZE, GROWTH AND DEMAND
The total fruit beverage market is placed at Rs. 22 billion with the fruit based beverage
market constituting 25% of the overall market. Thus the fruit based market has currently a
potential of Rs.5.5-6 billion. Until 5 years ago, the market, which largely consisted of fruit
drinks, was growing at 30% due to its low base. But with the launch of new products in the
niche segments like nectars and juices, the fruit drink market growth reduced to 10% as
compared to 30% growth rate of juices and nectars.
The pure fruit juices segment is estimated at 100 crores and is growing at 40 % growth rate
while the synthetic segment is at 10 % only. The per capita consumption of juices in India is
estimated at 200 ml which is expected to rise given China has attained a consumption level of
1500ml.
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As per the study by McKinsey and Co and CII, the market size of all fruit beverages is
projected to grow very fast to Rs 20 Bln level by the year 2006 from Rs 3.5 Bln level
currently. This figure is not inclusive of exports.
The worth of tetra-pack market is currently estimated to be around Rs.400 crore, which is
10% of the total soft drink market. At present, the tetra-pack market is growing at a rate of
10%-12%, and in the near future, companies like PepsiCo Inc. (Tropicana) are expecting a
growth rate of 40%. But Godrej Foods is skeptical of the growth rates and estimates it to be at
15% due to onslaught of carbonated soft drinks.
In- home packs do not witness any seasonality in the market and there distribution patterns
remain normal throughout the year. Out-of-home packs like 250 ml face a lot of peaks and
troughs and there is a lot of seasonality, which has to be looked after to manage demand and
shoot profits.
Table 1.1: Demands Past & Future
Year '000 MT
1990-91 137.61991-92 147.4
1992-93 157.5
1993-94 176.9
1994-95 211.0
1995-96 262.2
1996-97 298.2
1997-98 340.0
1998-99 390.9
1999-00 447.6
2001-02 579.22004-05 809.9
2006-07 1043.7
From the above table, the growth in market can be seen as increasing constantly from 7 to 16
% in 1999-2000. In the next six to seven years, the market is poised to grow at 20%
approximately.
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The fruit beverages market in the Indian continent is segmented zone-wise as follows:
Table 1.2: Zone wise Shares
Segment Share (%)North India 25
East India 20
West India 31
South India 24
Thus the fruit beverage market has more acceptance in Northern and Western India, which is
due to the climactic conditions prevailing there relative to the rest of the country.
Table 1.3: Market growth rates
1990-91 -1996-97
13.8%
1996-97 -2001-02
14.2%
2002-2006-07
12.5%
1.2. MAJOR PLAYERS AND THEIR MARKET SHARES
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Cooperatives and other processors in the fruit-rich states of Himachal Pradesh and Punjab led
the early development of juice processing. The canned juices market initially covered brands
like NAFED, Noga, Midland, Gold Coin and Druk. These were fruit juices and nectars and
not drinks. But they did not make a mark in the market due to reasons such as high price,
unattractive packaging and lack of right promotion programmes.
The market has suddenly picked up since 1994-95 and a few players have emerged as market
leaders. Parle Agro's Frooti, a mango drink, was introduced in tetra pack in 1987. It is a
leading brand in this segment with a market share of 67 %.
Enkay TexoFood's Onjus (Orange Juice, with a pulp content of 85%), which is positioned in
the niche market of fruit juice was introduced in 1997. This brand has gained a market share
of 19% of the tetra-pack market within two years. After the success of Onjus, the company
launched Life (Mango nectar with 40% fruit content) as fruit nectar in 1998. The market of
this brand is estimated to be 7%.
Godrej Foods markets its Jumpin brand (Fruit drink) in mango, pineapple, guava, litchi and
orange flavors. From 15% in 1997, its share has reduced to 3%. Although, Godrej produces
75% of its requirement of raw materials pulp internally to have a cost benefit, but it not able
to cash on that advantage.
Dabur had launched its Real range of fruit drinks and had gained a market share of 53%.
Some foreign brands like Ribeno, Don Simon, Hazienda, Trauben and global leaders in fresh
fruit juice products- Sun Pride from England and Kings from Germany have entered in stores
in affluent areas of Delhi and Mumbai. Mafco is in the nectar segment with mango,
pineapple, guava and strawberry fruit nectars.
Brand & Type of fruit bever. Market share
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Player
Frooti Parle Agro Drink 67%
Onjus Enkay Texofoods(ETL) Juice 19%
Life(mango) ETL Nectar 7%
Jumpin Godrej Foods Drink 3%
Real Dabur Foods Juice 53%
Xs Godrej Foods Nectar N.A.
Tropicana PepsiCo. Juice 21%
As per ORG_MARG study, Onjus has 19% share, Real has 53% and Tropicana has 21%
share. But according to retailers, Onjus is the market leader followed Real and Tropicana.
2. SCOPE OF FRUIT BEVERAGES
2.1 MARKET SEGMENTATION
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There has been no general acceptance of the product forms in the fruit drinks market. The
consumer is basically concerned if it is a fruit juice or synthetically constituted product.
Product segmentation, therefore, should be clearly delimited. Under the fruit drinks the first
segmentation is between real fruit drinks and synthetic drinks. The former is based on natural
fruit pulp or juice. The others are synthetic products containing fruit flavors.
Broad taste preferences could be another way to define the market. The market is at present
segmented on the basis of fruit pulp content. For the purpose of segmentation, on the basis of
fruit pulp content, the market can be segmented as:
Fruit juice with pulp content more than 80%. Brands falling in this category are
Onjus and Real. Recently Tropicana has also entered this segment.
Fruit Nectar with pulp content between 40%-80%. Life and X's comes in this
category.
Fruit Drinks with pulp content less than 40%. Frooti and Jumpin are the popular
brands in this category.
Segmentation could also be on the basis of the benefits provided to the consumer:
One benefit could be the nutrition content it gives to the consumer. So one market
could be the health-conscious segment.
Second benefit is thirst quenching, so the other segment could be those buying the
drink or nectar for satisfying the thirst and especially for those on the move.
Another very broad segmentation is the type of situation in which the drink or nectar is used:
People who are on the move i.e. those traveling and
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People who are using it on the breakfast table as a part of their menu.
Players very often choose one or more of such segmentations to differentiate their
product and target market and accordingly plan their distribution and promotion
patterns.
2.2. POSITIONING
Fruit based drinks are positioned as a natural thirst quencher for fun loving, health conscious
youngsters. The target segment for the fruit drink is children where the brands are positioned
as fun drink. While fruit juices and nectars are targeted on youth where the projection of the
brand is as a trendy drink.
2.3. CONSUMER HABITS AND PRACTICES
The Indian lifestyle has a traditional predilection for fresh fruits and vegetables or those
processed at home. People go in for fresh fruits vending from kiosk fountains, which produce
instant juices from fresh fruits in the presence of the consumer. One reason is the
unavailability of hygienically produced and well-preserved products with the use of
preservatives. The fact that it is packed denies its freshness. This was also a reason why some
of the real but branded fruit juices launched in the late 1980s and early 1990s did not succeed.
Taste is often the secondary consideration in the Indian market for beverages. Fruits juices
also lose on roughage, which is an important part of fruit nutrition. Few people know the
difference between a juice and nectar.
In general, the Indian consumers have become health conscious now and are looking for
healthy and natural and appetizing juices. They are moving away from synthetic drinks to
natural and wholesome fruit juices. At present
Per capita consumption of juices in India is estimated at a fraction of a litre -200ml.
The consumption of fruit juices in take-home packs is estimated at 17250-mn lt.
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Consumers go for convenient and economy products. So small packs are well suited
for travelers and children and large take home packs for families and price conscious
people.
Availability in chilled form and brand awareness plays a crucial role in purchasedecision. This has implications for the need for availability of the product and in the
right form.
While there is no aversion to consumption of fruit beverages by any age group, the
main consumers of this market are people in the age group of 30 and below. Young
adults and teenagers predominantly consume tetra pack drinks.
Brand loyalty is very low, as all the products taste the same. But brand loyalty is high
in case of kids. Though there is a lot of difference between brand awareness and brandloyalty.
Consumers are money conscious where the purchase of fruit beverages is concern.
Consumers are not ready to explore the market. They do not want to change their taste
and are stuck to their old brands. Orange and other drinks are slowly picking up and
breaking the loyalty towards old brands.
2.4. PACKAGING TECHNOLOGY
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With the change in consumer preference for the product, there is a change in the package
preference. Tetra-Pack India, a part of the $10 billion Tetra Laval group, has become the
major source of brick cartons amenable to aseptic packaging and impairing long product shelf
life to the foods.
Packaging has emerged as the 5th P of marketing. Especially in context of food products,
packaging has been designed and used to connote wholesomeness and provide convenience.
Coming to fruit drinks, the possible packaging could be using
Food grade polyethylene.
Glass bottles
Canning
Aseptic packaging
Although a small volume of branded fruit juices are sold loose (an example is hpmc), the
loose fruit juice market consists mainly of unbranded players (mainly the restaurants).
In spite of the cost advantage food grade poly packaging is almost out of question because
It does not provide the kind of shelf life required to store seasonal juices for the off-
season.
It is not tamper proof and hence is not perceived to be wholesome.
Glass is burdened with the cost disadvantage which can be overcome only by giving up the
on the move image. This means a loss of one segment of the market. However glass is
expected to come back in a big way owing to its environmental friendliness coupled with the
increased environmental awareness. A lot of research is also on the way to make glass cheap
and light in weight.
All most all the major players in the fruit juice segment have positioned themselves as either
on the move / nutritious/fun to have drinks. To project this image, tetra packs have served the
best.
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Canning is very useful in terms of the longer shelf life but has constraints in the form of time
and effort required and the technological know how.
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2.5. DISTRIBUTION NETWORK
Distribution network and reach are vital factors for the success of the brands in the fruit drinkmarket. It is mainly the distribution strategy that the companies are focusing upon.
The distribution is mainly done through stockists. The companies also have franchises that
work as a separate entity. Some companies also have their C&F agents to give the product to
the distributors, who further distribute to the retailers. To co-ordinate the things properly with
the distributors, companies keep their own-filed force.
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COMPANYS
MANUFACTURING PLANT
FRANCHISES STOCKISTS
C&F AGENTS
RETAILERS
DISTRIBUTORS
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3. PROFILES OF THE MAJOR MARKET PLAYERS
Based on the publications and literature available, the major players have been analysed and
their profiles are put as follows:
3.1. PARLE AGRO LTD.
Parle Agro Ltd. is one of the leading companies of this group. Parle Agro's Frooti has been
one of the major successful brands. It has a market share of 67% in the tetrapack fruit drink
market. After the success of India's first tetrapack drinks, Frooti and Appy, which were
launched in mid 80's, there are new product variants from the house of Parle. This is the
launch of the larger 200ml. Packs of YO Frooti and YO Appy that generated some kind of
fizz in the lackluster market.
Current sales:
Parle Agro's current sales are around 12 million cases nationally. Institutional sales contribute
a minimal part of Frooti's sales. The institutional supply is mainly to AIR INDIA, hotels like
Taj, Leela and Railways on contract basis.
Export Market:
Parle Agro exports to Europe, American and Arab countries. Although there is a lot of
demand from these countries, it is seasonal.
Marketing and Distribution Network:
Parle Agro has extensively gone in for manufacturing franchising of its soft drink Frooti.
Through Franchising, it has grown fast and established its brand Frooti as the leader market.
It has continuously strengthened its marketing network and distribution intensity, and
achieved deeper penetration at minimum cost. This has led to
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decentralized and cost effective operations. Whenever capacity was becoming a constraint
Parle Agro commissioned more manufacturing franchisees and overcame the limits to
growth. It has appointed some manufacturing in places like Boston, USA, Dhaka,
Bangladesh, Nepal and has registered itself in 44 other countries.
In India, the distribution network is very widespread. Frooti has reached 200 cities. There are
7 manufacturing plants from where, the distribution is mainly carried through stockists. In
other regions, franchisee network is established which has a separate entity. Parle Agro's rural
network is very good and their reach is even to the smallest village of the country.
3.2. ENKAY TEXOFOOD INDUSTRIES (ETL)
ETL's business has 3 main business segments in the food processing:
Fruit pulp
Orange juice, Onjus (100% juice)
Life mango nectar (80%)
The two beverages brought Rs. 100 cr. in 1999.
Orange juice, Onjus (100% juice):
Their first brand Onjus was launched in 1997 and within 2 years has captured a market share
of 19% of the total tetra-pack market. The main attraction of this brand was that the juice is
squeezed out of oranges imported from Brazil. Onjus was started out on a 'natural taste'
proposition and was launched as an on-the-move drink with 250ml straw packs for outdoor
consumption. Onjus worked extensively on taste and worked out a concoction of
international oranges and Indian oranges. It was predominantly oranges imported from
Florida and Brazil, with Indian mandarin to suit Indian taste buds.
Priced at Rs. 9 for a 250-ml pack, it had advertised as a kind of adult fun drink the low
pricing was a part of the penetration pricing strategy. Onjus' orange 250ml pack sells for
Rs.12 while the 1-litre pack is for Rs. 44. Having attained leadership, Onjus raised its prices
recently.
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Advertising outlays had been stepped up for TVs and press. The sales last year were 15
crores and the Onjus brand is now a 60 crore product. It has also penetrated the household
refrigerators with 1-litre tetra-packs and had extended its markets to Delhi and Pune initially.
The brand right now does not focus on replacing milk or milk products at the Indian breakfast
table though there is a possibility in the future. For this brand, Enkay Texofoods is intending
to garner additional volumes from canteens and the like in future, if current plans succeed.
The Onjus' success is attributed to the ATA model of 'Availability, Taste and Affordability'.
It is succeeding as a big-pack brand. As per company's estimate, the ratio of 1-litre take home
packs to 250ml tetras is already 60:40. The small packs are serving as trial getters, but the big
ones offer better price realization.
Onjus was recently shifted from the pulp to nectar to participate in the nectar segment in
India which is untapped. As per ORG-MARG, Onjus is right now the leader and this is partly
because it has the first mover advantage, having built the market over the last five years.
Onjus has, according to the company's consultants, Samsika Marketing, opened its
institutional segment and is strong in military canteen sales departments, on airlines as well
as in hotels and clubs.
Onjus' focus is on capturing share in all the segments of the market. The idea is to go to all
levels-upper, middle and lower income. As such the price of Onjus is quite reasonable and
affordable.
Life mango nectar (80%):
Life was introduced in the market in 1998 as mango nectar. Of the tetra pack market Life has
a market share of 7%. Life had been test marketed in Mumbai and Pune and then rolled out to
the remaining 101 targeted towns including 80 class 1 cities. Initially, it had been sold as a
huge sampling drive to generate trials. It was served on air India, Indian airlines and some
international flights. It ad campaign was handled by Advertising Avenues.
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Distribution Network:
Their distribution network currently spans over 302 towns in outlets such as general stores,
supermarkets and departmental stores. Onjus is served on all airlines during flights and has a
260 strong marketing team to supportAs per the company, Life is made from the finest
Alphonso mangoes. And with the success of the brand "Life", they made plans to enter the
rural sector.
Export Market:
Enkay is the largest Indian exporter of fruit juices, pulp and concentrates to Europe and North
America, with clients such as Unilever, Coke, Pepsi and Nestle.
ETL had recently restructured to demerge the textile division into another group company,
thus leaving ETL with just agro processing. This will give ETL the boost to focus on its
foods business more and also provide the company with a single focus image. The money
raised from restructuring has been used to expand reach of distribution channels.
The company has a plant near Vapi, Gujarat churning out 80000 packs of 250 ml and 70000
packs of 1 litre of Onjus daily.
3.3. GODREJ FOODS LIMITED
The company is quite an old and experienced player in the market. It now has a portfolio of
three products- Jumpin, Xs and Refresh.While Jumpin is in the drink segment, Xs stands in
the nectar category and Refresh in the juice category.
Jumpin:
In July 1991, the company launched fruit drink in 6 flavors under the brand name Jumpin and
in 1998 it was extended to squashes. Jumpin had six flavors- mango, apple, orange,
pineapple, guava and litchi. In the Rs.400 crore fruit drink market, Jumpin share is now at a
low 2%. Earlier Jumpin was positioned as a fun and
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excitement drink and was mainly targeted on kids. But now Jumpin goes for an appearance
change to grab the attention of trendy youth. The company is focusing strongly on providing
a variety of flavors and has entered the nectar and juice segment. In June'99, the company
launched Xs in metros, which is doing pretty well. The company launched these tetra packs
in 1999 and the reasons were:
Low market growth in fruit drinks
Young adults emerging as consumers of tetra pack drinks
Improved tetra pack technology
For the young adult, who does not like a tetra pack with a straw in his mouth, Godrej also
offers a bigger pack, which fits into their image as well.
Xs:
Xs was introduced in summer 1999 in two flavors- mango and litchi priced at Rs 12 each.
Godrej had done a lot of homework in launching Xs. At the time, Frooti and Jumpin
accounted for 60 and 40 % of the Rs. 175 cr. market. The company researched and found that
the young adult market considered Frootis and Jumpins as kid stuff. Since new drink could
not now be introduced as a brand extension of Jumpin, Xs was positioned as a nutritious
drink-cum-snack.
To differentiate Xs, Godrej has following strategies:
Xs is prepared from Alphonso mangoes to give value-addition in terms of taste. It is also a bit
high-priced to create a premium perception. The product formulation has been kept suitably
thick to appeal to the consumer's taste buds. Since this could make drinking uneasy, the pack
comes with a pull tab. Initially, Xs was distributed in Mumbai and Bangalore and then spread
to 24 cities. The brand is now doing well in these places.
Xs was also differentiated on the advertising platform. It was projected with a trendy,
youthful image and was compared with cool products. The company spent Rs. 1.5 crore on
advertising (handled by Madison DMB&B) to target sales of 1 million trays. In restructuring
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in January last year recently, Godrej pulled the litchi brand from popular category into the
premium category to cater to adults.
There is a difference between Xs, Jumpin and Refresh. The difference is in formulation,
pricing and the target segment. While Xs is for young adults, Jumpin is for children and
Refresh is different because it is cheaper.
The company has also launched Lemon and Rose at Rs. 5 to fight the nimbu pani segment
which constitutes about 90 % of the domestic soft-drink market. The company has also come
up with a new mango drink Jumpin Masti, in nectar category. The company had also tried to
increase its sale to 10 lakh crates each in Jumpin and Xs to confront the stiff competition
from Onjus, the market leader and Real of Dabur.
Future plans:
Godrej has also been building to increase its 40% share in the category and aims to get hold
of 45% by this year. Though Jumpin mango constitutes 70% of total Jumpin franchisee, the
focus is shifting on the non-mango variants to increase their contributions.
Export market:
Godrej has also forayed into exporting 20 % of the total volume manufactured to west Asian
countries. It has an association with Blue Diamond Almond Growers Association and is the
only one to use this name.
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Promotions:
Godrej tied up with TNT and Cartoon Network for promotions on Jumpin drinks. It also
carried out innovative trade schemes at retail level. Right now, Godrej has also tried to
fragment the market in a manner to cornet Frooti. It considers the fact that the one 'mango'
variant of Frooti is Frooti's weakness.
Distribution Network:
The synergy in the distribution with the existing business makes the distribution of the brands
easy. Their network is the same like soaps and biscuits. The company has distributors who
supply directly to retailers. The distribution network is spread in 50,000 towns all across the
country. The company's reach is also to places like Leh, Sikkim, Guwahati etc. The
distribution network and the brand name Godrej are considered to be the main strengths of
the company.
Manufacturing:
Godrej foods has been quite an old and experienced player in this category. The company has
manufacturing facilities at Mandideep, Bhopal, Mumbai and Mysore. There is another facility
at Wasik and all plants run at 60% capacity due to seasonality of products.
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COMPANY
DISTRIBUTORS(1000 APPROX) RETAILERS
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3.4. NOGA
The Nagpur Orange Grower Association, or better named as Noga is a very old player in this
category. This once popular brand of the '70s and '80s was the product of Noga, a division of
the Maharashtra Agro-Industries Development Corporation (MAIDC).
Support to the brand was withdrawn in 1994, when sourcing funds for Noga's maintenance
became difficult. The margins given to dealers and retailers were also not enough to develop
adequate push. To resolve this, MAIDC gave a fresh look to this brand and relaunched it in
1998.
Seeing that the orange fruit juice segment is becoming popular with brands like Onjus and
Real being introduced in quick succession and PepsiCo also entering in this market with its
newly acquired Tropicana (orange fruit juice) from Seagram, efforts were hiked.
Noga's product portfolio currently revolves around three fruits - orange, pineapple and
mango. As per the Food and Agriculture Integrated Development Action (FAIDA) report, "
fruit based products are in the basic segment, which are dietary additives over subsistence
segment products like cereals, fats and fruits. This segment is expected to double by this year,
taking in 200 million people.
Noga is banking on its popularity in markets in north and western India. After having a
presence in exports, the company has also tried to make its presence felt in the market. Noga
came up with extensive media campaign. The campaign targeted children. In the words of
Mr. Amar Pande, president, food processing, MAIDC, " This is the segment which counts, as
children influence the decision of purchase makers."
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Advertising and promotion:
Noga's ads can be spotted on hoardings and Pops, which is a thrust area for MAIDC. The
decision to aggressively adopt outdoor media was strategic as well as practical. The decision
was to get sustained exposure to outdoor media and thus attract the consumer's attention long
enough to arouse curiosity. It was practical also because they are far cheaper than spots on
television or print.
Noga has occupied a number of kiosks and side panels of buses in Mumbai, which is its
primary market. The 150 dealers across the country provide the required distribution network
to MAIDC. While its popularity in Mumbai, Goa, Nagpur, Guwahati and north India can
generate pull, without adequate push support the product can only languish.
Noga, which is fairly strong in terms of institutional sales, is now working hard to make its
presence felt in the retail segment.
MAIDC also moved from ton cans to tetra-packs for its one-litre juice packs which retail at
Rs.35. This was done to bring Noga at par with other brands being retailed and to make it
more attractive on the shelf. The main idea behind this was to project the image of Noga as a
brand, which moves with the time.
It also entered into a joint venture with foreign and Indian partners and it would involve
marketing and production. The partners were given access to a brand which had production
facilities in place and a fair amount of recall in the west Indian market.
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3.5. DABUR FOODS
In 1997, Dabur Foods brand 'Real' made its foray in the fruit juice market. It was launched inpineapple, orange and mango flavors. When Real was first launched it failed due to quality
problems. Dabur was stressing on richness of juices, which did not go very far. Another
reason was narrow distribution and slackened advertising. It was also priced higher than
Onjus and so was unsuccessful due to reasons such as quality and high price. Dabur had to
chart an indigenous marketing strategy since Onjus was sold on almost half the price. In the
relaunch, Dabur tried to wrest the price advantage. As a result, it was successful in capturing
a market share of 53%. The company also used a new packaging plan, a new positioninginitiative, a new price rationale and even a new ad-shop. The first step of the plan was to
target an estimated Rs.100 crore in-home consumption segment through 500ml and one litre
packs.
They had started as an on-the-table family drink and later positioned it as an on-the-move
drink. Dabur also tried to cover the paanwallahs and other small shops with 200 ml tetras.
The current positioning is as a soft drink kind of beverage with the added benefit of health.
The price of Real was lowered and its raw material is sourced from Brazil rather than a
European trader, thus lowering the costs. Also, since processed food can be brought into
India without duty, Dabur imports juice concentrates at lower prices. Real's half-litre orange
juice sells for Rs. 22 while 1-litre pack is for Rs. 42, which is two rupees lower than Onjus.
Real has also forayed into nectar besides the juice category. It comes in 250 ml, 350 ml, 500
ml and 1 litre packs. No preservatives or synthetic colors are used and the juice is packed in a
special foil of Elopack imported from Norway. This pack is a 9-layer foil which claims to
keep the juice fresh for 6 months with the flavor intact.
As compared to Tropicana, Real is emphasizing on sweetening the taste. It intends to cater to
the Indian taste and offer sweetened options. As per their market research, taste is the first
thing Indians consider. It also offers convenience by offering a cap that can be screwed back
on, for a longer period of freshness.
Real's current target segments are the upper and middle-income classes. The rationale is that
juices being a commodity for the middle classes, the market is definitely to
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boom. Real is also sold to institutional segments like airlines, marriage orders and special
occasions of bulk selling.
Real faces almost no competition in Gujarat but on the national level, its major competitors
are Onjus and Tropicana.
Promotion:
Major advertising is done on TV and occasional promotions are also run to increase demand.
Currently it is running a promotion scheme offering the 1 litre bottle with an airtight tumbler.
Dabur is increasing its marketing and advertising expenses since Real Fruit Juice have
potential to achieve greater volume of sale.
Distribution Network:
For distribution, the company had been tapping its current network of 280 cities and big
towns and the products are not being supplied in the smaller regions where there is no
effective real demand. Conventionally, the distribution network comprises of depots that
supply to stockists and retailers like supermarkets and general stores. Now, Dabur Real sells
at some 80,000 outlets in 240 cities and towns. This smaller region in itself contributes 80%
of their sales. The margins given to stockists are 7.5% and retailers earn 15% on the sales.
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GENERALSTORES
SUPERMARKETS
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Dabur had also appointed consultants to improve its distribution system. Better
logistics were required to link delivery to price realization. Under the new system, which
replaced the old haywire one, Dabur switched to varying delivery frequencies- depending on
value of sales being generated by each leader.
Expansion and Modernisation:
The plant in Nepal helps Dabur bring processed food into the country without any duty. After
facing the packaging problems due to small breakdown at the manufacturing unit, Dabur
Nepal Ltd., the company upgraded its packaging technology. In FY 1997, they purchased a
state-of-the-art-packaging machine from Chicago-based Nimco. It also has plans to come up
with vegetable juices. There are also new product variants coming up such as Apple Juice and
Mixed juice.
The prices of various packs of Real are as follows:
Product Price (Rs.)
Mango Nectar (1 lit) 48
Pineapple juice (1 lit) 57
Orange (1 lit) 57
Mixed Fruit 60
Orange (50 ml) 24
Mixed (500 ml) 30
Pineapple (500 ml) 30
Pineapple juice (250 ml) 12
Orange juice (250 ml) 12
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3.6. PEPSICO
The most recent entrant in the fruit juice industry is the $2.3billion orange juice giant
Tropicana Products Inc, a division of PepsiCo Inc, which made its debut in July'99 in Delhi
and Bangalore with two variants-its best selling orange juice and pineapple juice. The
company entered the fruit juice instead of the fruit drink market.
Tropicana stands at 21% share in the market. The company is importing concentrate, which is
blended locally under its supervision at Dynamix Dairy Industries' plant in Baramati,
Maharashtra. A test market exercise, which was initially carried out in Bangalore under the
Dole brand (also owned by Tropicana) revealed that Indians would prefer a sweeter taste. Asa concession to this preference, a special orange and white grape blend was concocted at the
research facility in Florida.
Tropicana in the US makes much of its money as a breakfast habit. It intends to keep up with
its global positioning on health and taste and does not want to sweeten its juices. The product
is a more premium product catering to the upper classes as the cost of fruits is very high.
Thus Tropicana is very expensive among all categories.
Tropicana currently runs its volumes in metropolitan cities like Delhi, Mumbai, Hyderabad
etc.
Tropicana has a global sourcing strategy for fruits. It buys apples from China, pineapples
from Thailand and Philippines, oranges from Brazil and Florida. The company picks up 30%
of Florida's annual crop.
PepsiCo's entrance in the domestic juice market comes at a time when the market has become
very competitive with several brands like Real, Onjus, Frooti, Jumpin fighting for the market
share. At the same time Dabur's Real is being relaunched with new packaging. Tropicana has
become a strong competitor to Onjus in the fruit juice category.
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Promotional Activities:
PepsiCo has set up cool zones in outlets to create a visual effect. These zones house
PepsiCo display racks next to its visicoolers, both stocking the entire PepsiCo range in a
present format the products horizontally, at eye level, and in different sizes down the racks
with selling price on it.
3.7. OTHER PLAYERS AND BRANDS
Kool Kokum
RSVP Foods of Pune has launched Kool Kokum, a tetra-pack version of the popular sweet-
sour Maharashtrian drink made from a dried fruit of the west coast. There is another variant, a
green mango Panna (Kool Jal Jeera) with a sweet-sour flavor, different from the other drinks.
The company launched these products to take advantage of the liking for ethnic flavors in the
consumers.
Ditto
Ditto was launched by HPMC (Himachal Processing and manufacturers Cooperative) in the
100% juice category. The product has been introduced in three flavors- strawberry, pineapple
and apple. There is another brand Apple and also another product of mixed fruit juice of
apple and pineapple (100%). Priced at Rs.9 for packed juice and Rs.6 for loose juice, it sells
200 glasses per day in summers and 60 glasses per day in winter. Its Litchi squash sells at Rs.
50 for 700 ml, Orange squash sells at Rs.45 for 700 ml. The price of the Apple juice is Rs.15
for 200 ml and Rs.30 for 600 ml. The apple juice concentrate sells Rs. 122 for 900 ml.
Other brands in the category are Maavin from Tamil Nadu Milk Federation, Verka from
Punjab Milk Federation and Milma's Refresh. These companies are basically into pasteurized
and flavored milk production and have also forayed into the fruit juices category.
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FAILURES
Amul's Safal with mango and guava flavors failed due to non-acceptance on the part of the
consumers. The consumers were unable to associate the brand Amul with a product like fruitjuices which need to carry an image of freshness and flavor more than quality.
Another failure was that of Lipton's Tree Top. The brand's prospects were messed up due to
poor distribution support and erratic supply of packaging raw material. Another reason was
the brand's appeal, which was far too nerdy in contrast with Frooti and was not properly
differentiated.
Yet another failure was Godrej's Great Shake and Mato, a tomato based drink.
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4. SUBSTITUTES
The substitutes market is the major threat sector for the fruit beverages. It comprises flavored
milk, cold drinks, mineral water and drinks and juices sold by the unorganized sector.
The fruit beverage industry faces tremendous competition from many substitutes available in
the market. Some of the major substitutes are:
1. Soft Drinks (both cola and non-cola drinks)
2. Flavoured Milk (Milda, Zip Sip, etc.)
3. Mineral Water
4. Other milk products like buttermilk and lassi.
4.1. SOFT DRINKS MARKET
Segments:
Soft drinks are divided into carbonated and non-carbonated drinks. While Cola, lemon and
oranges are carbonated drinks, and mango drinks come under non-carbonated category.
Packaging:
Soft drinks are available in bottles, cans and large PET bottles for home consumption.
Fountains also dispense them to cater to the demand of fountain drinks by on-the-move
consumers who are price conscious.
This market has witnessed a growth rate of around 16 percent for the last two years as
compared to the growth rates of 5%-6% in early 1990s and 2%-3% in late 1980s.
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Segmentation:
The soft drink market can be segmented in accordance with the point of purchase as:
On -Premise: Around 80% percent of the consumption of soft drinks takes place on-
premise, i.e., restaurants, railway station, cinema, etc. which gives a lot of competition
to the fruit beverages which competes directly with take-home packs of fruit juices as
well as squashes.
At - Home: The remaining 20 percent of the soft drink consumption is for home.
The cola and non-cola segments are as follows:
Cola: This accounts for 60 percent of the total soft drink market at the all India level.
The brands that fall in this category are Pepsi, Coca-Cola, Thumps Up, etc.
Non-Cola segment which can be further divided into:
Orange: This segment has a 19 percent market share of the total market. Fanta
and Crush fall into this category.
Cloudy Lime: This segment represents 14 percent of the total market. Limca
and Mirinda Lemon fall in this category. Limca is the largest non-cola brand
and holds a share of around 82 percent of this market.
Clear Lime: This comprises 3percent of the soft drink market. The major
brands, which fall in this category, are 7 up and Sprite.
Mango: Slice, Maaza are mango drinks having a market share of 3 percent.
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Consumer Habits and Practices:
The competition from soft drinks market exists for fruit juices because the consumer
segments are universal for both and the reason for purchase in both categories is almost the
same.
Consumers purchase soft drinks primarily to quench thirst. Therefore people traveling
and not having access to hygienic water reaching out to soft drinks account for a large
part of the sales. Not having access to hygienic water can also result in purchase of
fruit beverages and it is here that soft drinks give them the hard battle.
While there is no aversion to consumption of soft drinks by any age group, the main
consumers of this market are people in the age group of 30 and below. Thus, the soft
drinks directly compete with the fruit drinks, which are also targeted towards the same
age group.
Brand loyalty is high in the case of kids and people in the age group of 20-30 years.
This again is a major threat to the fruit beverages market.
Some of the major strategies, which are being or have been adopted by the cola players to
combat competition from the fruit juice market, are:
Introduction of Diet Pepsi/Coke
Diet Pepsi/Coke were mainly introduced to capture the health conscious consumers, whom
they would have lost to the fruit drink market. They tried to position their products as fun
drinks.
Packaging:
Since the fruit drinks have been positioned as on-the-move drinks, the cola players have
introduced cans and 500 ml PET packs. These players also switched back to 200ml bottles
mainly to reduce the unit cost in the expectation that such a strategy would lead to more
frequent buying.
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Major cola players, Cadbury's Schweppes and Coca-Cola have undergone a merger. The
main reason was that Cadbury's Schweppes wanted to strengthen its distribution network,
while maintaining its market share in the United States.
In United States, Coca-Cola has launched a new product " Frozen Coke". This launch was
the result of the company's belief that it would lead to legitimization of the product as a real
beverage.
Distribution:
The distribution network of these drinks is very strong and widely distributed which gives a
strong shake to the fruit beverages industry. Coke had 8 lakh outlets by the end of 2001 while
Pepsi had 6.5 lakh outlets.
4.2. FLAVOURED MILK
Just like fruit drinks, flavoured milk is also positioned on the health platform. Companies are
trying to project it as a fun drink with added flavours and innovative packaging.
Due to the perishable nature of flavoured milk, this segment has been dominated by regional
players like Energee and Milda. However, in February 1999, Britannia entered in this
segment at the national level with its offering named Zip Sip. Available in five flavours -
pineapple, mango, strawberry, chocolate and cardamom, it is made from cow's milk and has
no preservatives. It is offered in 200ml tetra packs.
Advertising and promotion:
Zip Sip has been positioned as a cool milk drink with Vitamin A that could help bringing
about regularity in its consumption and not make it a one-off impulse drink. Due to its
projection as a fun drink, the company considers all branded products in the soft drinks and
fruit drinks as their competitors. Zip Sip has a vast distribution network with 4,50,000
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retailers, targeting 50% of these for Zip Sip, which is a serious threat to the fruit drink
business. Recently Parle has introduced its new flavored milk in the market called N-Joi.
The drink is capturing the market rapidly as Parle is already a market leader in fruit drink
market with its brand Frooti, and so it also has a very vast distribution network. The drink
was launched in Alphonso mango flavor with a dash of milk, which is been projected as a
nutritional drink; the drink is now also available in strawberry flavor.
Packaging:
Tetra packs are also being used to sell fresh, long-lasting milk packs and ensure quality
delivery. Also UHT (Ultra High Treatment) is being used. For these milk products, retailers
opine that advertising is crucial for success. While in competition with fruit drinks, retailers
are given a margin of around 15 % for flavored milk brands and they encourage more
promotional schemes to boost sales.
4.3. MINERAL WATER
This was one of the most surprising finding of the project. Fruit drink sellers consider even
mineral water as a substitute for to their offerings. The main assumptions are packs ensure
quality delivery. Also UHT (Ultra High Treatment) is being used. Mineral water essentially
caters to the demand of travelers and affluent customers which is also the target market for
fruit beverages. The consumer's perception as regards contaminated water has also undergone
a change and international as well as domestic tourists accept mineral water as a travel
companion. The bottle can be refilled for further use. Wholesale and institutional segments
have emerged such as weddings, social parties, hospitals, nursing homes etc. which also clash
with those of fruit beverages.
Segmentation:
The mineral water market is segmented according to the type of consumers:
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Foreign Tourists: Foreign tourists have been the main consumers of the mineral
water as they face a lot of digestion problems due to different food habits.
Domestic Tourists: Domestic tourists have switched to mineral water mainly
because of safety and hygiene factors.
Fashion Conscious: Like soft drinks, some people also consider drinking mineral
water fashionable.
The mineral water consumer is mainly in the age group of 20-35 years and is an educated
middle class person. This is also the segment of fruit drinks, which have usually been
positioned as fun and health drink for young adults.
The mineral water market is also segmented along pack sizes:
One litre bottle: it is meant to spell safety and security for consumers. It is positioned
on a prestige platform for the achiever segment - who like to make a fashion
statement by drinking mineral water. This segment gets the maximum sales.
500ml bottle: This size has been introduced in the market to target the individual and
local travelers.
PET bottles: The size of the PET bottles varies from 10 to 20 litres. These are mainly
for institutional sales (Wedding parties, Hotels, Corporates, etc.)
Consumer Habits and Practices
Consumers are growing more health conscious and are more careful of their drinking
habits.
Brand loyalty is very low as all the products taste the same so they can buy just any
product which is on the shelf, same as that of soft drinks and fruit beverages.
Availability in the chilled form and brand awareness plays a crucial role in purchase
decisions.
While there is no aversion to consumption of mineral water by any age group, this
product is mainly consumed by the people in the age group of 20-35 years who have
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less attraction of soft drinks or other synthetic drinks whereas youngsters look in for
soft drinks and fruit beverages to quench their thirst.
Visibility is another factor that should be taken care of by the companies as
consumers are not very brand loyal and consume whatever is in front of them.
4.4. OTHER MILK PRODUCTS
As the major demand for fruit beverages is during summers, milk by-products like buttermilk
and lassi also serve as major substitutes. They compete in terms of low price as well as easy
availability. These drinks are also considered important from the health
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5. INDUSTRY ANALYSIS
A cross company analysis needs to be done to analyze the fruit beverage industry in the
following heads:
A cross comparison and preliminary analysis
Analysis of reasons for the success of leading players to identify the sources of
competitive advantage
Make a set of best practices to ensure success for any player
5.1. CROSS COMPARISON
The players in this industry have been around for less than five years and they have adopted a
mix of strategies to grab market shares. While some strategies are widespread among all the
players, some of them are exclusively used by only particular companies, which can presently
be said to be the major success factors for them.
The crucial factors for success in this industry are identified as follows:
Technology used for processing
Sourcing of raw materials
Product portfolio and variants produced
Packaging technologies used
Distribution strategies, logistics and reach in the market
Strategic alliances and joint ventures to gain competitive advantage in packaging,
distribution and product formulations.
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The players can be compared across some universal factors such as:
Source of raw materials
Product portfolio and variants Packaging technology
Distribution reach and logistics
Promotion schemes.
Strategic alliances.
Exports
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packs(200 mland 300ml)
packs (250ml and 1litre take-home)
packs packs (250 ml,300 ml and 1litre)
ml,350 ml,500ml and 1litre)
ml and 1-litre)
Distribution Franchis
es,stockists,andstrongruralnetwork
302 towns
and outletslikegeneralsupermarkets anddepartmental stores
50000
towns,withdistributorsandretailers.Reach in
places likeLeh,Sikkim andGuwahati
Kiosks, 150
dealers acrossthe country
Network of
80,000 outlets in280 cities and
big towns.Comprises ofdepotsstockistsretailers.
Delhi, Mumbai,
Hyderabad andBangalore.
Advertisingagency
Advertising Avenues
DMB&B NA. NA NA
Salessegments
Institutional salesminimal(airlines,hotels,railways)
Share in allincomesegments,institutional sales inmilitarycanteens,airlines,hotels and
clubs
Middle andlowerincomesegments,
Primary market-Mumbai, stronginstitutionalsales, efforts tomake a mark inretail segments
Upper andmiddle incomeclasses.Institutionalsales (airlines,marriage orders)and specialoccasions),almost no
competition inGujarat
Upper incomesegments due tohigh price andmetropolitancities.
Alliances none BlueDiamondAlmondGrowthAssociation
Foreign andIndian partnersfor productionand marketing
Elopack(Norway ) for
packagingtechnology
Tropicana wasacquired byPepsiCo.
Exports Europe,American and
Arab
Largestexporter of
juices,
pulp andconcentrates toEurope and
NorthAmerica
20% of totalmanufactur
ed volumeto westAsiancountries
None None NA
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5.2. ANALYSIS OF REASONS FOR SUCCESS:
The fruit beverage industry is growing at a pace of 15% per annum. And the market is still in
a nascent stage. In the last four to five years, three players have emerged as the market
leaders: Enkay Texofoods with Onjus, Dabur with Real and PepsiCo with Tropicana. The
challenge in front of the leaders currently is to expand the market further as well grab the
largest shares.There are old as well as new players like Godrej foods with Jumpin, Xs and
Refresh, Parle with Frooti and NOGA. The market leaders have adopted various strategies
and made many strategic moves to emerge as leaders. Following is the analysis of the three
current market leaders:
ONJUS
This drink has cashed in on the first mover advantage
The brand has consistently followed the ATA model of availability, taste and
affordability.
Onjus sources its raw material from Brazil and Florida and has mixed it with Indian
mandarin to cater to Indian tastes.
It targets all the income segments and is priced comparatively lower than Tropicana
and Real and has a large chunk of institutional sales.
It has built a strong distribution network spanning 302 towns.
It has emerged as the largest exporter of fruit juices , pulp and concentrates to Europe
and North America
Onjus initially used a penetration pricing strategy and then hiked the prices to come at
par with other brands and skim the market.
The Onjus controversy over sourcing of its raw materials did not harm its position due
to its strong image in the market.
It also has a strong promotional drive to push sales.
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REAL
Dabur learnt from its failures with real. Initially priced higher than Onjus, it lowered
its price.
Real has the advantage of the brand name Dabur which is associated with health in
India.
It also changed its packaging, positioning and advertising to give Real a new look.
The positioning was changed from on-the-table to on-the-move to take advantage of
volumes. It is also promoted as a soft drink with additional health benefits.
Dabur incurs low cost of production owing to import of fruits from Brazil than
European traders.
With the alliance with Elopack, Norway, it has a superior packaging of 9-layer foil. It
also offers a tetra pack with a cap that can be screwed back. Imported packaging
technology gives Dabur an upper hand.
Real stresses on sweetened tastes. By this, it caters to Indian taste preferences.
(Indians find Tropicana juice bitter).
A strong distribution network with enough margins for dealers.
Continuous innovation has helped Dabur to keep pace with market (plans to come up
with vegetable juices)
TROPICANA
The main advantage is that Tropicana is a well-established brand in US.
It has a strong research base, which helps it in coming up with new flavours.
To cater to Indian tastes it has come up with a special Orange and White Grape blend.
Global sourcing strategy enables it to provide quality products.
In terms of distribution, this brand has the greatest advantage. (PepsiCo has more than
600,000 outlets in India)
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5.3. WHAT ARE THE BEST PRACTICES?
Since the industry is still in the nascent stage, the practices adopted by the leaders can give afair idea of what practices would lead to the success of any player. These practices are also
combined with the trends in the western fruit beverage market.
The success of the market leaders suggests that:
State of the art production and packaging technology is a must. This gives an edge in
packaging and ensuring freshness of product besides enhancing the image.
A strong distribution network is essential for ensuring availability to fight competition
from the other players and also the substitutes which have a strong distribution reach.
Companies should take into account the regional taste preferences and build products
to serve the same. Various concoctions and formulations in the US and other foreign
markets suggest that such strategy is necessary to live the image of the company and
remain in the forefront.
Innovations in terms of ethnic flavours and mixes will pay off. (Kool Kokum)
Global sourcing strategy will give an edge over other players in terms of both cost and
quality advantages.
Strong advertisement especially media campaigns would help the players in the fruit
beverage market to combat competition from soft drinks, flavoured milk, mineral
water and unbranded sector.
From the trends observed all around the globe, one can see that:
Continuous innovation in product formulations, in terms of blends, fortifications and
health concoctions would become a necessity in future to differentiate products. Such
a strategy would help players to remain in the market.
New forms of packaging like resealable tetra packs, screwable caps, plastic on glass
etc. suggest that fruit beverages continuously require small revisions in terms of
product formulations and packaging and also need strategic changes in marketing
aspects like promotion, pricing volumes sold, advertising and promotion.
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The entrants and existing player need to appreciate the fact that growth in the market with
onslaught of global competitors will have to be met with better preparations in marketing
strategies and continuous promotion, advertising and product changes will be required to
fight competition. There is another determinant to success of the players in this industry and
this includes the tropical fruit market scene in Asia and the world.
5.4. THE TROPICAL JUICE MARKET IN ASIA
The tropical juice market in Asia can give some insights into the future of the market in
India.Way back in 1998, despite the growing popularity of tropical juices, there were
indications that traditional suppliers would not be able to serve the market. There were
adverse economic and weather conditions also in Thailand and India. Mango production In
India was hit hard by higher than normal temperatures, followed by floods. There were
certain adverse conditions in Thailand such as weather conditions, economic crisis,
depreciation in baht, low purchasing power and less import demand, leading to shortage of
transport containers and a rise in shipping costs.
This suggests that such developments, whatever they are, affect demand. This is evident inthe fact that there was a threat to Asias strong position in the international juice market even
when demand for tropical juices grew.
In the global market, the European and US importers are the major buyers of tropical juices.
These importers mainly demand mixed tropical drinks. In Europe, many juice concentrates
(including guava, banana, papaya, and others) are mixed with orange and pineapple to form
nectars and special tropical blends. Netherlands is the largest continental importer of juices
for mixing purposes and usually does so for resale to the rest of Europe.
In the U.S., the tropical juices are also enjoying increasing popularity. From 1994-1996, the
total volume of banana juice imports grew by 15 percent whereas imports of tropical juices
excluding banana and pineapple increased by 50 percent during the same period, both in
volume and value terms.
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The long-term trend in the U.S. juice market points toward increasing popularity for tropical
juices. An important reason being sighted for this increase is the growing number of Asian
and Latin American immigrants, which in turn has sustained the growth of ethnic based food
stores. A more recent development is the popularity of multivitamin drinks during hot
weather. These drinks are prepared by mixing juices such as mango, papaya, guava and
others with vitamins and health related supplements.
The following fruits have the following demand patterns in the world:
Pineapple
The price of pineapple juice has increased over the last couple of years due to Asian
production shortfalls, which have caused unrest among the importers worldwide. Philippines
and Thailand are largest pineapple suppliers by volume. Shrinking demand and shortage in
production has led to a 13 percent reduction in U.S. imports.
Unlike the U.S., demand in Europe continues to be strong despite the high prices. EU
pineapple juice imports have doubled over the past ten years, to nearly 100,000 metric tons
per year. Imports of this magnitude began in 1994 and have hovered at this level. This juice is
especially popular in the Mediterranean countries where temperatures are high during the
summer season.
Thailand is the largest pineapple concentrate exporter to the European Union, normally
accounting for 25 percent of all imports.
Mango
The concentrates from Central and South America enjoy popularity among U.S. and
European juice importers.
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Banana
Normally supplied in large quantities by India, buyers have begun to look for alternate
sources as the supply and the quality of banana puree have been put to question because of
some bad seasons in last few years. Costa Rica dominates the U.S. market, supplying over
half of all imported banana puree.
Other Fruits
In the U.S. other tropical juice imports (except banana and pineapple) have shown steady
growth in recent years. Brazil and Ecuador are the two major players who hold the top spot in
the export of juices.
India is the main supplier of white guava whereas the pink guava (more popular guava
variety for juice making processes) is exported by Malaysia, Brazil, South America and
Venezuela.
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With respect to the fruit juice market, the two main drivers identified are the quality
of the juice and the consistency of the quality. This means that the Indian consumer
has to be convinced that the juices are pure and do not contain any preservatives.
Energy has emerged as another option for the positioning of fruit beverages. Fruit
products companies in the west have already begun using this ground.
Vitamin fortified juices have become the rage. Sales of calcium fortified Tropicana
pure premium orange juice, rose 173 percent since 1997. Tropicana has three
offerings of calcium-fortified juice and one offering of orange juice with Vitamin E
and C.
A few ethnic flavours like Kool Kokums Jaljira and Regent Agros Coco Sip are into
the market and are expected to be a hit. From these trends we see that a number of
combinations in terms of fruit juices mixture and fortifications (Vitamins and
Minerals) can be formulated and be used to expand the market.
Any company can create a niche for itself by concentrating on a particular juice and
then advertise to cash upon the desired tastes demanded by the consumers.
Tetrapak is experimenting with an innovative Tetrafino packaging. This is
expected to be cheaper but the shelf life offered would be maximum 45 days. The
main advantage would be less cost and more volumes with more shelf life and further
revenue generation.
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CONCLUSION
The fruit beverage market is growing day to day, but the market in still in nascent
stage. There are many old as well as new players like Godrej foods with Jumpin, Xs and
Refresh, Parle with Frooti and NOGA and the challenge in front of the market players is to
expand the market and increase the market share too. Frooti Parle Agro Drink is ahead of
all and in the last 4 to 5 years Onjus Enkay Texofoods (ETL) Juice, Real Dabur Foods
Juice and Tropicana PepsiCo. Juices have emerged as the market leaders and are facing stiff
competition.
The Indian consumer has become health conscious now and is looking for healthy and
natural and appetizing juices. They are moving away from synthetic drinks to natural and
wholesome fruit juices. The Indian consumer perceives the product through its quality and
consistency in quality and hence he has to be convinced that the juices are pure and do not
contain any preservatives. Companies should take into account the regional taste, preferences
and build products to serve the same. Innovations in terms of ethnic flavors and strong
advertisement especially media campaigns would help the players in the fruit beverage
market to combat competition from the substitutes of fruit beverages like soft drinks, flavoredmilk, mineral water and unbranded sector.
The Fruit Beverage Market has potential to grow and there is very huge market which is
untapped. Hence the market players must strive to grab this opportunity. Todays market
players need fresh thinking about how to operate and compete. To understand the customer is
very important and it is not simple too. Creative and unexpected ad placements can grab the
customers attention. When the product is positioned it should have availability, taste and
affordability also. A product will be successful if it delivers value and satisfaction to the
target consumers. The market players have to adopt suitable packaging that would be
convenient to the customers and fast distribution network that will make the product readily
available in the market. The entrants and existing players need to appreciate the fact that
growth in the market with onslaught of global competitors will have to be met with better
preparations in marketing strategies and continuous advertising, promotion and product
changes.
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In the new millennium it will be very important for a marketer to understand the
psychology of the Indian customer. The Brand that will be able to understand the consumer
behaviour with respect to their likes, dislikes, requirements and preferences and use it
accordingly in their positioning strategy will take the biggest slice of the market.
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APPENDIX
What is Aseptic packaging?
Aseptic packaging is the packaging of a product in germ free ingredient. The product to be
packed should be aseptically processed. There is no point in trying to protect a product from
external contamination if it already consists of spoilage causing organisms.
What is aseptic processing?
Aseptic processing involves, heating the product rapidly to a temperature of 137-140 degrees
centigrade, holding it at that temperature for a few seconds and quickly cooling down to room
temperature. This kills spoilage causing bacteria without affecting the taste or nutrients in the
product. The entire process takes place in a closed, pre-sterilized system to prevent re-
infection. To safe guard the high microbiological quality imparted by the process, the
aseptically processed milk is conveyed to the packaging machine in a closed, pre-sterilized
system and metered aseptically to packs, which are sterilized and formed inside the machine.
What is Tetra Pak packaging?
Tetra Pak is a brand name, which has come to imply the technology. This
essentially consists of 6 layers of packaging. (See figure below)
1. Polyethylene: seals liquid in2. Polyethylene adhesive layer: Gives extra strength
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2
3
4
5
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3. Aluminum: keeps flavor in and light, odors and oxygen out
4. Polyethylene: for adhesion
5. Paper board: gives rigidity and strength.
6. Polyethylene: keeps moisture and germs out.
Advantages of tetra packs:
1. Allow a larger shelf life with no additional preservatives.
2. Original taste and flavor of the juice is preserved
3. Can be stored and distributed without refrigeration
4. Tamper evident and hence rules out possibility of adulteration or contamination.
5. Makes it possible to transport the nutritional but perishable product across long
distances.
6. Juices of even seasonal fruits can be made available to the consumer throughout the
year.
Limitations of Tetra Packs:
1. Cost is high as compared to pouch packaging. One litre pouch pack would cost about Rs
3.50 whereas the same sized tetra pack would cost about Rs.5.50. (there are some argumentsagainst this, to quote B.L.Venkateshwar general manager, Parle Agro Though tetra packed
fruit drinks are expensive upfront, once analyzed they give value for money, a 200 ml Frooti
is priced at Rs 8 so is a 300ml fizzy soft drink. But the thirst quenching ability of the former
is probably more. Not to forget that it has extra nutritional value attached to it
2. The product cannot be seen by the eyes. (This is overcome by vivid designs on the pack.)
2. Tetra Pak market faces excessive duties and taxation. May be because of this the Tetra
Pak market is growing at only 10-12% when the bottled beverage market is growing at
a rate of 25%/annum.
What is canning?
It is the filling of the fruit juice or any product in a can, hermetically sealing it and then
heating up to 125 degrees Celsius for approximately 20 minutes. This process eliminates any
microbes but adversely affects the flavor and texture of the product. An alternative solution
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was found in aseptic packaging, but until recently, traditional aseptic packaging using thin-
walled metal cans have been considered impossible.
Now Beverage presterilization has emerged to overcome the limitation of canning. Here
instead of sterilizing the product inside a can, the beverage is pre sterilized for just a few
seconds at 140 degrees Celsius before filling the cans aseptically.
Advantages of canning:
Provides better opportunities for improving the products image.
Makes product suitable for vending machines.
Environment friendly. (The beverage can is easy to recycle)
Limitations of canning:
This is suitable only for carbonated beverages. (Carbonated beverages produce their own
pressure, which supports the walls. Unpressurized dont do this and the can feels floppy).
The solution came as introducing an extra stage into the process which is, placing a drop of
sterile liquid nitrogen placed on top of the product before the can is sealed. When the liquid
nitrogen warms up it evaporates, pushes oxygen out of the headspace and pressurizes the can.
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8. Which flavors you like the most?
Mango Guava
Litchi Orange
Apple Pineapple
Grapes Mixed
9. Which Fruit drink you prefer?
Frooti
Onjus
Jumpin
Real
Tropicana
10.Why?
11.Which packs of Fruit drink you prefer?
Family packs
Small packs
12.Do you keep on changing the brands and flavors? And why?
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13.Are you satisfied with he current product line of beverages?
14.Which more attributes you want in your Fruit drink?
Taste
Flavour
Price
Pack
Questionnaire to executives:
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1. What is your product portfolio and in which flavor the products are
available?
2. What is your target market?
3. Which region is your biggest market?
4. What are the bases of market segmentation?
5. What is positioning strategy of your brand?
6. What are the strategies to market the fruit beverages?
7. What are the promotional and advertising activities undertaken by the
marketers?
8. What type of packaging is used?
9. What is your Distribution Network?
10.How do you conduct market survey?
11.Why do you think people have started purchasing branded Fruit drinks?
12.What is the peak season for the sale of Fruit drinks?
13.Who do you think your closest competitors?14.How is the response from customers and how do you see it in the future?
15.Do you export products? In which countries the products are exported?
Bibliography
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WEB SITES
www.godrej.com
www.pepsico.com
www.parle.com
www.daburindit.com
MAGAZINES
Business world
Business India
Atlanta Business Journal
NEWS PAPERS
The Economic times
REFERENCE BOOKS
Marketing Management Philip Kotler
Marketing Management M.V. Kulkarni
Marketing Management V. S. Ramaswami
http://www.godrej.com/http://www.pepsico.com/http://www.parle.com/http://www.daburindit.com/http://www.godrej.com/http://www.pepsico.com/http://www.parle.com/http://www.daburindit.com/