What can a little-known berry, found in the icy heights of the Himalayas, do for the fruit juice market in India? Plenty, if the plans of Ladakh Foods Ltd. are translated into liquid reality.
Ladakh Foods is building a portfolio of products from fruit juices to jams and sauces, based on the little-known seabuckthorn berry, which grows in the Ladakh region.
That may seem like a risky gamble. But Ladakh Foods doesn't think so. Two months ago it launched Leh Berry, its first fruit juice in Delhi and it's selling it in the more affluent parts of town.
Since January the drink has also been on shopshelves in cities like Hyderabad, Nagpur and Pune.
D K Mittal, group chairman, Compact International, is putting big bets on seabuckthorn. Last year the group built a pulp processing factory in Leh. Ladakh Foods, part of the same group, handles the distribution.
Naturally, the juice will be competing with such established players as Tropicana and Real. The fruit juice market has been saturated, so to speak, by the preponderance of orange, mango and apple flavours, so Leh Berry believes it has the advantage of a fresh taste.
But its competitive edge may well lie in its positioning. Ladakh Foods is marketing Leh Berry as a nutrition drink (it prefers not to use the word health, with its bitter, medicinal associations), based on the chronicled nutritional properties of the seabuckthorn fruit.
Legends about the nutritive and energy-giving properties of the berry date back to ancient Greece, according to the International Seabuckthorn Association.
The association says that Mongol conqueror Genghis Khan used the fruit to improve the fitness and stamina of his armies. Closer to the present, Russian cosmonauts have used them in space to combat cosmic radiation and as an oxygen supplement.
What makes the fruit special? Its supporters say the juice contains a potent mix of compounds and vitamins that help to fight a string of diseases.
The branded fruit juice market in India is estimated to be worth Rs 120 crore (Rs 1.2 billion) and the segment is growing at about 30 per cent per annum. The market leader is Dabur's Real Fruit (50 per cent to 55 per cent) followed by Pepsi's Tropicana.
Both players are firmly established, so Ladakh Foods' target of capturing at least 7 per cent of the market share within a year and 20 per cent by 2006-end is ambitious. Ladakh Foods had a turnover last year of Rs 2 crore (Rs 20 million) and it aims to boost that five times by 2004.
Can a one-flavour brand sustain itself in a competitive market? Mittal has the answer ready.
"Seabuckthorn will always provide the base for our juices," he says, "but we will soon hit the market with new flavours mixed with seabuckthorn extract."
The company is looking at conventional flavours like apple but the plan for the near future is to introduce apricot, passian (a fruit popular in the north east) and even pomegranate mixes. Currently, Leh Berry is available in 200 ml and 1,000 ml packs priced at Rs 12 and Rs 55 respectively.
For now, the company is ready with its next product lines -- jams and sauces made with seabuckthorn as the base. Jams, fine, but is India ready for a fruit sauce revolution? Mittal is optimistic.
"It's a question of being open to a new concept. We believe the citric taste of the sauce will combine well with foods like parathas."
The company doesn't want to divulge the prices yet, saying only that they will be similar to those of the competition -- Kissan jam, for instance. The jam and sauce will also be available in sachets, priced at Rs 2 and Re 1 respectively.
Further down the line is a foray into cosmetics, again with a seabuckthorn base. Fairness creams, face packs and anti-aging creams will soon hit the market under the brand name Seabuck, and as many as 30 products are planned for the next six months.
The company even says it is hoping to make a foray into pharmaceuticals based on seabuckthorn. This has a precedent: in Russia, for instance, purely medicinal use is made of the extract.
Compact International conducted research on the seabuckthorn fruit in association with Defence Research and Development Organisation.
Ladakh Foods Ltd was incorporated early last year with an investment of Rs 4.8 crore (Rs 48 million), its objective being to carry out business in the field of horticulture and food processing in Leh-Ladakh.
An integrated processing plant was set up at Leh to process the fruit juice, and the company signed a joint venture with National Agricultural Cooperative Marketing Federation of India Ltd and Small Farmers' Agri-Business Consortium. "Over 300 farmers invested in the company," says Mittal.
This was followed by a tie-up with Godrej Industries Ltd for the use of its Bhopal plant for co-packaging. The fruit is seasonal -- it can be plucked only in a six-week period between August and September -- so NAFED has taken the responsibility for storage.
While seabuckthorn-based products are only just being produced for Indian markets, worldwide the fruit has long been used in juices and in medicine.
Mittal, who recently attended an international Seabuckthorn conference, says China has as many as 180 products made from seabuckthorn. But he also points out that the fruit is being artificially produced in that country, something not yet done in India.
"There is still plenty of potential for wider cultivation of the fruit," he says.
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