More juice in the juice market

Can Dabur Real Foods put more juice in the juice market? The company which has turned fruit juices into a Rs 60-crore (Rs 600 million) business has been turning on the taps in recent months -- and it hasn't been afraid to innovate.

It's heading off in untested directions by launching a new range called Coolers, which includes traditional recipes like Aam Ka Panna (a green mango drink). It has also launched a pomegranate juice and a watermelon drink. A jamun variant will soon follow.

Or, look at Pepsi Foods that has recently launched Tropics, a new range of what are called nectars in the fruit juice business. Pepsi has started out with a relatively unadventurous mango flavour but it will soon be putting guava and litchi on the shelves.

If that's not enough, Pepsi Foods is also aiming at customers with more exotic tastes with an orange-apple combination and a tropical fruit fusion drink (a mix of mango, guava, pineapple, orange and apple juices).

Dabur and Pepsi Foods aren't the only companies that are moving into overdrive in the juice business. As Indians take bigger swigs than ever before of packaged juices a slew of companies are hoping to grab a share of the action.

The result is that players like Dabur Foods, Pepsi Foods, Godrej Industries' Foods Division, Mother Dairy and even the small Ladakh Foods are betting big money on this market by flooding it with new fruit beverages. "It's a huge market with its potential still to be tapped," says Sanjay Sharma, head of marketing at Dabur Foods.

The results are on show to anyone who steps into a neighbourhood supermarket. There are now racks filled with fruit juices, nectars and drinks (the difference lies in the pulp content -- juices are 100 per cent while drinks are below 20 per cent and nectars fall in between).

The swift growth in the market is attracting newcomers like Mother Dairy, which recently launched the Safal brand of juices. Safal is currently available in orange, mixed fruit, grape and an orange-apple combination. Ladakh Foods, makers of the Leh Berry seabuckthorn berry drink, has now also launched an apple-peach combination juice and a mixed fruit variant.

Even Godrej Industries Foods Division has introduced fruit juices under the Xs brand (which earlier only consisted of nectars) and a soya milk fruit juice based drink called Sofit this year. Parle Agro -- of Frooti and N-joi fame -- too is rumoured to be on the verge of new launches.

To add to the buzz, players are now looking at different pack sizes and price points. New entrants are also expected to join the fray in the Rs 500-crore (Rs 5 billion) organised fruit beverage market (nectars, drinks and juices combined).

One newcomer is likely to be Ahmedabad-based Pioma Industries -- makers of the Rasna brand of soft drink concentrates, which test marketed a diluted mango juice in Andhra Pradesh, but dropped the launch plan after a lacklustre response. Industry experts predict that the company may try again either this year or the next.

What's making all these players gung-ho about fruit beverages? For one, the fruit drink market (juice accounts for 30 per cent, nectar is 10 per cent and fruit drinks are 60 per cent of the market today) has grown at a 20 per cent to 25 per cent rate.

Of this, the more expensive juices segment has grown at a 40 per cent rate this year. It accounted for only 15 per cent of the fruit beverage market three years back. Says Jagdeep Kapoor, chairman and managing director, Samsika Marketing Consultants, "Consumer habits have changed drastically. They are looking for healthier options and nutritional value in the food they buy today."

Obviously, some segments are doing better than others. Fruit-based milk drinks {market size Rs 20 crore to Rs 25 crore (Rs 200-250 million)} like N-joi are currently stagnating. But fruit-based soya milk, another emerging segment reckoned to be worth about Rs 15 crore (Rs 150 million) to Rs 20 crore is expected to grow rapidly.

Godrej, which recently launched the Sofit brand, is experimenting with this market for the second time. Ten years back, its soya milk brand Great Shakes failed miserably because of its taste.

But it's not just the health fad that has led to the growth spurt. Cola sales fell dramatically after the pesticide controversy and this seems to have benefited the fruit beverage industry. Soft carbonated drinks (colas) grew 17 per cent in 2002 but fell 15 per cent in 2003.

Says Alaka Bhosle, marketing consultant with ad agency Percept H, "It's one of the key factors that has led to the kind of growth that we have seen in the last year. But this growth will continue since consumers are now hooked on."

"What also made the market work is the fact that tetrapaks offered a solution to provide fruit juice practically fresh and preservative free," says M P Pusalkar, executive director & president, Godrej Industries, Foods Division.

The proliferation of supermarkets and malls in metros and mini-metros (key markets for this category), added to the growth story as well. And then there is the income factor.

The other factors that have helped are the different pack sizes that players started offering in the last year. Tropicana launched a 500 ml pack at Rs 25 compared to a one litre pack for Rs 76.

Says Subroto Chattopadhyay, executive director, Pepsi Foods, "These new price points and packs are aimed at getting more consumers to try the new product, and in turn increase the consumer base."

All of this has resulted in increased in-home consumption of juices, which has gone up from 30 per cent three years back to almost 80 per cent today. Says Dabur's Sharma, "Consumers perceive this as the next best thing to having a fresh fruit. Convenience is no longer the selling point, the naturalness is."

Everyone now has big plans for the future. Dabur, which currently has a 55 per cent market share, wants to launch more Indian fruits and even fruit and vegetable juice combinations in the near future. It is also trying to bring down prices.

So, it has launched Coolers 15 per cent cheaper than Real because it has a lower pulp content. And by setting up a food processing plant in Siliguri, West Bengal, Sharma says Dabur will source fruits directly from farmers and cut down raw material or pulp costs, which comprise almost 30 per cent of the finished product.

Similarly, other players like Godrej are also looking at launching new variants including combinations by year-end. Parle Agro, which has been experimenting with sugarcane juice for sometime now, has launched mango Frooti in 65 ml packs in Pune, Gurgaon and Mumbai for Rs 5. A year back, it extended the Frooti brand into pineapple and orange variants as well as launching it in 250 ml and one-litre PET bottles.

Pepsi's Tropicana has tied up with equestrian sports and polo clubs to build bridges with the well-heeled young adults. Its recent sampling exercise included an interactive quiz reaching out to 200,000 students from 150 schools in Delhi.

But the big issue is that they are all playing with the same fruits. It has to be seen how long consumers can sip the same concoctions.