Squeezing More Juice Per Fruit

Suneera Tandon

Businessworld, May 20, 2011

The buzz at Dabur is Real this summer. It has just roped in Zlata Creative Design, a brand consultancy from Down Under, and spent close to Rs 18 crore to give a booster shot to its two fruit-juice brands — Real and Real Active. Krishna Kumar Chutani, vice-president for marketing at Dabur, says fatigue was the trigger: “Consumers have been looking at the same juice packs for over 10 years now.” It has also added Real Fibre for that nutritious zing.

Now, there’s nothing to beat nimboo-paani (lemon juice) when it comes to matters of thirst. But Real’s market share is juicier than its rivals. Elara Capital puts it at 52 per cent. Right behind Dabur is PepsiCo’s Tropicana at 35 per cent. The remaining is shared by others such as Coca-Cola’s newly launched Minute Maid juice, Parle’s Saint Juices and some local brands that are still warming up. (This market share is for the juices/nectar category only — beverages with 25-85 per cent pulp concentrate.)

On The Shelf
Sure, the thirsty swig more cola. It packs more than a fruit-punch in the annual Rs 10,500-crore beverages mart. The fruit-based beverages market is much smaller at about Rs 2,000 crore. Fruit juice sales come in at a shade over a third of this at Rs 750 crore. But fruit beverage is seen as the next big squeeze. It is growing at a healthy clip of 25 per cent year-on-year as against carbonated beverages that is growing at 22 per cent per annum.

The bet is on the growing pool of the health-conscious that believes fruit drinks are the real big chill. Godrej’s Nature Basket, which caters to the higher end of the market through its 13 retail outlets, has witnessed a 4:1 sales ratio between fruit and aerated drinks. It also vends high-end imported juice brands from the US and South Africa such as Ceres, Pfanner and Florida, priced anywhere between Rs 125 and Rs 250 for a litre as against Real and Tropicana, which fall in the range of Rs 85-Rs 90. “Consumers are more than willing to pay for these brands. Juices have constantly outdone other drinks. It is an obvious market preference where our health-conscious consumers opt for juices,” says Mohit Khattar, managing director at Godrej’s Nature Basket.

Homi Batiwalla, director-juice and juice drinks at PepsiCo, would like some of that business come his way. “Fruit drinks are the next big thing and we are constantly investing in better technology to get the best out of this market.” PepsiCo might have held back from repricing Tropicana this year, but it has tweaked the way it hawks its mango drink Slice, which will now be sold — the only one at that — at three price points. You still get to gulp down from the 200 ml tetra-pack; there’s also a bigger-gulp 350-ml Slice priced at Rs 22. PepsiCo has also upped the price of its 500 ml bottle by Rs 3 to Rs 28.

For Spar, a chain of 14 hyper-markets run by Max Hypermarket India, a consumer tilt towards fruit beverages is the trend. “The sale of fruit juices and fruit-based drinks market is twice that of carbonated drinks. The demand for fruit drinks category has been growing steadily at say around 10-12 per cent annually,” says Viney Singh, managing director of Max Hypermarket India that also sells mango juice under a private label. “We also house a few regional brands such as Cocojal, a range of flavoured coconut drinks, and Sip On, local mango and apple drink that is sold only in Mangalore.”

It also helps that a sipper is born every minute. For most consumers, the lines are fuzzy. Juice, fruit nectar or fruit beverage, it is the pulp that matters. If what you drink contains a generous 85 per cent or more fruit pulp, it can be called juice. It is fruit nectar if there’s 25 per cent to 85 per cent pulp; and it is just a fruit-based drink if the pulp is at 25 per cent. To most consumers, it does not seem to matter though — as many just want to have a ‘healthier’ or more ‘natural’ option than carbonated, synthetic drinks. “The concentration of pulp does drive up the price. You get the sense that it is a more wholesome product. But I think the perceived benefits of having a ‘natural product’ remain attached to products all along the price curve,” says Devangshu Dutta, CEO, Third Eyesight.

Mother Dairy, too, wants to get a few more sweet drops out of its Safal brand. It will now come in 200 ml plastic bottles with a new look. Pradipta Sahoo, head of horticulture business at Mother Dairy Fruits & Vegetables, says the company will look at how consumers reach out to the shelves. “We will tailor our range to future market trends.” Safal’s range is distributed and sold through 1,000 exclusive outlets in the Delhi National Capital Region and Bangalore.

Then you have Unilever’s Kissan. It has farmed out Kissan Soya Juices in three new flavours — apple, mango and orange. Safal makes it clear that it is not juice; its nectar. You will be forgiven though if you mistake Pepsico’s Slice to be pure mango juice!

Points out Dutta: “Package graphics or point-of-sale collateral does not make the distinctions any clearer for consumers.”

If it is true, it is a great way to juice your way to the bank.

(This article originally appeared in Businessworld.)