Come summer and the liquid goodies come pouring out, in various sizes and shapes, varieties and flavours. There is always some excitement at this time in the Rs 13,000-crore beverages market when thirst needs to be quenched, energy needs a quick boost and one just needs to feel cool. While carbonated soft drinks and non-fruit beverages such as soya milk and iced tea exist at different points of the spectrum, there seems to be much action in the fruit-based segment, estimated varyingly between Rs 1,300 crore and Rs 3,500 crore. This year, Coca-Cola got into the 100 per cent juice market, estimated at Rs 750 crore, offering market leader Dabur and Tropicana some competition with its Minute Maid range, while Hindustan Unilever added soya to the mix when it launched its juices (and milks) under the Kissan range.
But wait, a story about fruit juice need no longer be told only in the summer. Says K.K. Chutani, Head (Marketing - Foods), Dabur India, “Consumption of juices is no more seasonal with growing health awareness and availability of juices of different variants of fruits throughout the year.” And it's not just mango, lime and orange - consumers are willing to experiment with different flavours and varieties and pay a premium for value-added products. “As consumers, we have started living more and as a result, we have started to catch up with things or consume what we haven't done before. Today, the older generation has started experimenting with products and services traditionally meant for the younger generation,” points out Andriy Avramenko, Vice President - Juice Business, Coca-Cola India
It doesn't end there – it's now much more a considered purchase, especially with the growth of modern trade, and not just an impulse buy when one's hungry. A fruit beverage is now also a snack and not consumed merely for breakfast. They are now being gifted, just like chocolates and sweets, and more and more consumers are able to distinguish between a fruit drink (less than 20 per cent fruit pulp) and a fruit juice, making them more conscious and informed buyers. Children are a key driver of the category - they come in the top 4-5 things that a kid loves, says Dabur's Chutani.
OUT OF HOME
Another thing that marketers are trying to do is drive out-of-home (OOH) consumption. Homi Battiwala, Director (Juices & Juice Drinks), PepsiCo India, says in-home consumption is growing significantly faster - the format dictates the consumption pattern. For instance, in fruit juice, there are mostly one-litre packs and not much innovation in pack price, unlike in the carbonated soft drinks or fruit drinks category, where there are many options. Busy lifestyles seeking convenient solutions present a big opportunity. Nadia Chauhan, Joint Managing Director & Chief Marketing Office, Parle Agro, says packs are now also designed to offer 1-2 servings instead of larger packs for in-home consumption. It introduced its apple drink Appy in PET bottles and saw sales grow by double digits. It recently launched 100 ml triangular packs priced Rs 5, to drive rural penetration, and in smaller outlets such as tailor shops and STD booths. Coke's Avramenko says it has continuously worked with its partners to ensure products are available chilled, build capacity to service demand and offered smaller pack options in Maaza and Nimbu Fresh. Vending machines at public places such as malls, placing 200 ml packs in restaurants and airlines are other ways to tap the OOH consumer, says Dabur.
MAKING A DIFFERENCE
When BrandLine wrote on the fruit beverages market two years ago, one of those interviewed said Indian marketers had not exploited the various sub-categories in fruit-based beverages, and that they seemed stuck at fruit drinks. That seems to be changing. There are juices (20-100 per cent fruit pulp), exotic flavors such as guava, litchi and cranberry, and value-added options such as soya- and fibre-enriched juices, which Dabur is test-marketing.
“There is an increasing trend of consumers making healthy choices in their food consumption. Kissan Fruit & Soya juices are being introduced on the platform of taste and health. This is a differentiated proposition which we believe will help us open up and grow the juices market in India,” says Harpreet Singh Tibb, GM, Packaged Foods, HUL. HUL has also launched Soya Milk as part of the range.
Dabur's Chutani says consumers are going for “base-level” flavours as well as a “second flavour” – the latter is growing at above 40 per cent, while the former is growing at 25 per cent.
PepsiCo's Battiwala says that while brand managers need to tap into the street fruit juice market (“very relevant to the season, and consumers' lives”) to cover that category, popular flavours such as mosambi are hard to packsge as there is no consistency in supply or quality. Freshness too poses a problem. Differentiation in flavours or variants is more a challenge in fruit drinks rather than juices, says Chutani, adding that Dabur's Real has an assortment including peach and cranberry and offers pink guava juice. Dabur accounts for 52 per cent share of the Rs 750-crore fruit juice market.
However, growing as it is on a small base, there is a lot more momentum in the fruit juice category. It is growing at over 20 per cent. “Overall, awareness of the juice category is low,” opines Battiwala. Coke, quoting independent beverage industry reports, says nearly 120 billion litres of beverages are consumed in the country every year, only four per cent of which is consumed in packaged ready-to-drink form. This is a huge opportunity, says Coke, adding that it believes in building a portfolio of loved brands so that whatever be the occasion or “beverage need state”, it can cater to that need. Its Minute Maid range of 100 per cent juices come in apple, orange and grape.
Parle, the other brand which has juice, branded Saint, is promoting it through tie-ups with doctors and even arranging for it to be delivered home to some patients. Its strategy is to focus on the metros, mini-metros and top three cities in every State, as well as institutional sales and modern trade, which contribute 12 per cent and 5 per cent to Parle's revenues. Today, Saint Juice sees 30 per cent of sales coming in from modern trade alone.
According to Battiwala, the slowest growth is in fruit drinks (which account for 80 per cent of the fruit juice category) - growing between 10 and 15 per cent. “They are not able to unlock value either through price, taste or health, and are struggling for a foothold,” he says. Dabur's Chutani says drinks in PET are not seeing any growth, but that mango is still doing well. According to Parle Agro, market leader in mango drinks with Frooti, the flavour accounts for 77 per cent of the category.
A Datamonitor report says that due to the Indian preference for freshly made juices, the highest growth will be seen in 100 per cent juices, with claims such as “no added sugar” attracting new customers. “This segment is set to display the highest CAGR of 12.5 per cent over 2009-14,” says Varun Kumar, a senior analyst of consumer markets at Datamonitor. The packaged fruit beverages category is expected to display a growth rate of 7.8 per cent in this time. He says affordability, to appeal to the mass customer, and promoting them as part of a regular diet should see consumers consuming more.