The Hindu Business Line : No pulp fiction

In the world of fruit juice, pulp is sometimes a thing of fiction. And that is not always a bad thing, as that could render it light and refreshing, rather than heavy and filling. But were you to want a beverage with the latter qualities, replete wit h pulp and vitamins and minerals, those are available too, as are those without sugar or other additives such as flavour or preservatives.

And this, rather than the precise amount of fruit in the beverage, is what consumers are looking for – and is the learning on which Dabur India has begun to segment its products.

Last month, Dabur launched Burrst, a fruit drink, the latest in a long line of fruit beverages which include several flavours under the Real and Real Activ brands. Launched in four flavours, Burrst aims to fill a gap in Dabur India’s range.

“The other players have Frooti, Maaza, Slice, Minute Maid and Twister in this category, but this was a vacant slot in our approach to the market, which we wanted to fill,” says V. S. Sitaram, Chief Operating Officer, Dabur India. Saying that Burrst is meant for refreshment and to quench thirst, he explains that the company has changed its approach to segmenting the fruit beverages category. Earlier the conventional approach as set out by government guidelines was to classify a beverage with over 85 per cent fruit pulp as fruit juice, between 20 and 85 per cent as a nectar and less than 20 per cent as a fruit drink. “This was more from a manufacturer point of view and consumers did not connect with the same. So, we have reworked the positioning based on the specific consumer need that each product and brand addresses.”

Parle, whose Frooti claims 85 per cent share of the fruit drink market and calls it India’s “first national mango drink”, points out that globally, the fruit-based beverage category has multiple sub-categories, which India has not exploited to the fullest potential as yet. “Till today the largest sub-category in fruit-based beverage is the fruit drink category. Nectars are still small, so are juices, and fortified juice beverages are non-existent. So the potential of the category is huge,” says Nadia Chauhan, Joint Managing Director and CEO of Parle Agro.

Today the market for fruit-based beverages (in a country of 117 crore people) is valued at Rs 2,000 crore, while a country such as Thailand with a population of 6.5 crore yields a market that is five or six times larger, she says.

What do they want?

Broadly, there are three kinds of consumers: Those who are conscious of what they eat and drink and are into “active health management”; those who look for the nutritional value, protein and fibre content in fruits and vegetables; and those who look for refreshment or a light drink. Consumers are also looking for variety. Real Activ, which exhorts consumers to “Say No” to added sugar, flavour, colour or preservatives is aimed at the first category; Real, with its fruit juices that claims to provide benefits like ‘60 per cent of the daily requirement of Vitamin C in a 200 ml serving’ is for the second category and Burrst, for the third.

But in a market awash with a number of players big and small, how does Dabur differentiate itself? All the more so when all players put out mostly the same flavours – orange, grape, mango, mixed fruit, apple …? Is price the only difference in such a market? “Differentiation is a must, otherwise we will be playing a commodity game,” says Sitaram. “There is a strong need to justify the amount” being charged in a market where prices run the gamut from Rs 45 to Rs 85 for a 1-litre pack. As it does in the case of Activ, for instance, which, claims Sitaram, “without any sugar or added flavours, is still very good, and we’ve invested in special packaging capabilities”. Or Real, where the premium is justified by the fruit pulp content of over 80 per cent. It’s not just the standard issue flavours but also the “exotics” such as cranberry and Indian ones such as litchi, guava and pink guava that Dabur has in its kitty, points out Sitaram.

Parle Agro, on its part, prides itself on introducing products that are innovative and new. “As a core value of the company we introduce into the market the never seen and the never experienced,” says Chauhan. Whether it was in 1985 when we launched the first national mango drink in a carton or even our most recent launch, Grappo Fizz, a sparkling grape juice drink which created a new category altogether, every product between 1985 and now has also been a unique product, be it the first apple nectar in India (Appy Classic) or LMN, the first ‘Nimbu Pani’ in India.

Dabur says that while the new Burrst has been launched in the ubiquitous mixed fruit, apple, orange and mango flavours, there are “points of difference”, such as the mango variant using Alphonso mango. Also, the Orange Bytez variant gives consumers some pulp as well.

One learns that normally, it’s not just one variety of mango or a local variety of orange that’s processed to make the beverage. The variety of fruit either differs widely across this vast country (as in the case of mango) for a standardised recipe, or funnily enough, the variety available in India doesn’t suit the consumers’ tastes (as in the case of orange). Often, two or three kinds of mangoes have to go into what comes out as the mango juice as we know it, and oranges have to be sourced from abroad to suit Indian consumers’ tastes!

Dabur’s range of Coolers (launched in 2004), for instance, were withdrawn as the company felt it “was not really adding much value” to these drinks, and that the flavours (watermelon, pomegranate, aam panna and rose litchi) “weren’t mainstream”. And Real Twist, a fruit drink that combined mango with one other fruit, launched a couple of years ago to connect with youngsters, has been given up for “the much more evolved” Burrst.

Product packaging is another key differentiator. Chauhan says Parle Agro is a strong believer in packaging. “Today packaging is the first form of advertising and with more and more retail stores converting to self-service/open formats, packaging begins to play a larger role in differentiating the best from the rest.” “While most fruit drinks in the market are available in PET bottles, Réal Burrst stands out with its Tetra Pak packaging,” says Sitaram.

With 52 per cent market share, Dabur says it’s the leader in the Rs 600-crore fruit juice category with Real and Real Activ. This market is growing at about 15-20 per cent. (Included in this is the unsweetened fruit juice segment estimated at Rs 100 crore, and Dabur says it dominates here too with 55 per cent share, through Real Activ.) The fruit drink market, on the other hand, is much larger at about Rs 1,100-1,300 crore, and is growing at 30 per cent per annum. Dabur hopes to capture a 5 per cent share of this market in the next three years with Burrst.

Staying at home

Sitaram says, though, that the estimate of the market’s size does not take into account out of home (OOH) consumption. He says Dabur is taking a different strategy with Burrst. Though it is available in one-litre and 200 ml packs, “our primary source of business will be in-home consumption; we will drive the one-litre packs (priced Rs 65 per litre),” he says, explaining that home consumption accounts for one-third of the market. Competitors such as Pepsi, Coca-Cola and Parle started off as OOH and are targeting the on-the-go consumer with the smaller packs (200-250 ml), he says, adding that he expects 70-80 per cent of Burrst’s business to come from the bigger packs.

Says Parle’s Chauhan, “The Indian beverage market is price-sensitive. For packs that are targeted at on-the-go consumers, even a small price fluctuation has an impact on consumer demand. But the consumer does not mind paying a premium if he /she believes in the brand promise that the product holds.” She says Parle has a well planned SKU strategy to address ‘on-the-go’ as well as ‘in-home’ consumption. Frooti, for example, starts from a 110 ml pack and goes on to a 2-litre pack. While the 110 ml innovative triangular pack works as a shot of refreshment for those looking at economy or consuming a small quantity, the 200 ml pack mainly targets the youth and the on-the-go consumption market. The 500 ml PET bottle and bigger units enable staggered consumption and possibly one that friends and family at home can share,” she explains.

Dabur has not yet launched advertising for Burrst. Sitaram says he would like to have the distribution in place first – as of now, it is available only in modern retail stores. However, over the past few months, it has honed its advertising of Real and Activ with insights gleaned from consumers. And while it puts all that information on its packs, it doesn’t rely on them alone - the advertising too strives to be more precise vis-À-vis the benefits the products impart.

The pesticides controversies served to dampen the market for carbonated drinks, and created a thirst for healthier, cleaner alternatives, which saw fruit beverages’ growth rate in the last five years soar to healthy double digits from single digit earlier, says Sitaram. And while there’s always value in health, there’s much scope for wealth too!

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