The fruit juice market is one of the fastest growing categories in the beverages segment growing at a CAGR of over 25- 30 per cent over the past decade. According to a consulting firm Technopak, the Indian packaged juices market is valued at Rs 1,100 crore ($200 million) and is projected to grow at a CAGR of ~15 per cent over the next three years.
The growing trend of fitness and keeping one self healthy is driving the juice business in India. Over the last five years, the country has seen juice bars and juice cafes opening in India.
On one hand, local players are expanding their wings and signing deals with the global majors to start their business in India and on the other hand, beverages major like PepsiCo, Coca Cola and Manpasand are investing heavily into packaged juice business.
At the same, Dabur is the market leader in the Indian packaged juices market, with its brands Real and Real Active having 55 per cent share in the packaged juices market followed by PepsiCo with a 30 per cent share.
“Beverages segment is the most profitable business in India as the juice market stands at Rs 1,200 crore today. Beverage business has very small model, but the output is same in comparison to a restaurant brand,” says Rivoli Sinha, Founder Director, Joost Juice Bars, which is a master-franchisee for Boost Juice in India.
Organised v/s Unorganised
The juice business in India is highly dominated by unorganised players with over 75 per cent market share. The organised retail which has only 25 per cent of the business comprises of juice bars, juice cafes and packaged juice players.
“The juice segment in India is still an unorganised market. I am part of a niche crowd, which is very health conscious. And if I look at the competition in the market, I honestly feel that I do not have a real competitor in the market. First two years of my business was to let the product and logistics in place and I have not even started on sharing the market share presently,” adds Sinha.
Meanwhile, HAS Juice Bars which started its first juice bar in 2007 has 11 outlets in Mumbai. Speaking on the same, Director Hemaang Bhhatt says, “We started our first juice bar in 2007. So far, we have 11 outlets in Mumbai. Though we were slow on expansion initially, but before opening a new outlet, we want to ensure that the previous outlet is profitable in terms of process and scalability.”
Rise in the disposable income, people adapting the western culture, health awareness and import of fruits to India are among the top most factors to drive the juice business in India.
Over the years, we have seen that people no more stick to eating traditional foods. They have become experimental in terms of trying out new, they are travelling more, and they have grown an appetite of West among themselves.
“Emerging trends like increased preference on wellness, the desire to spend extra on health and maintaining healthy lifestyle, especially in the middle class and strengthening Indian economy, which offers more disposable income to the masses are major catalysts that drives strong growth of the non-alcoholic beverages market in India,” shares Dhirendra Singh, MD, Manpasand Beverages.
“We were witnessing that Indians are adopting western style of living and eating habits. At the same time, fruit is an inherent property which can cure a lot of disease and improve the immune system of human body. So, that’s where the idea came in my mind. I think that juice has become a substitute to food today. At the same time, it is a quick bite, saves time and gives all the required nutrition to the body,” adds Bhhatt.
Today every player in the segment is trying something. They are coming up with new flavours and tastes to meet the demand of their customers. Sourcing and growing the fresh food and vegetables have become the main strategy for these players.
ITC, PepsiCo and Coca Cola are signing great deals to enter and flourish their juice business. Manpasand Beverages, which started its operation in the year 1998, has crossed Rs 240 crore during the financial year 2012-13 with strong growth rate of 35-40 per cent per annum.
In May 2014, Hindustan Coca Cola Beverages announced that it aims to start mango juice business in partnership with Jain Irrigation after success of mango farming initiative 'Unnati' launched in 2011. Both the partners plan to invest Rs 50 crore over the next 10 years to boost mango production by using the Ultra High Density Plantation (UHDP) technology with the involvement of about 25,000 farmers in an area of 50,000 acre.
On the other hand, ITC Ltd, one of the biggest FMCG major in the company is planning to invest Rs 1000 crore in dairy and juice business. The group has also acquired Bangalore-based B Natural juices to tap the fast growing juice business in India. The company is planning to enter into both 100 per cent juices and nectars with 7-8 variants.
“ITC will soon roll out juices across the country, whereas, the entry into dairy business will be in the late next quarter. We plan to regionalise both juices and dairy products,” shares Chitranjan Dar, CEO, Foods, ITC.
Thus, we can say that Indian juice markets are heavily pouring profits into the business with participation of new as well as existing players in the market. In the years to come, we can see players working upon unique strategies to make their products more popular.
The Indian non-alcoholic market is currently estimated to be around Rs 50,000 crore, which includes mineral water, fruit juices, soft drinks, dairy drinks and hot beverages among others.
The fruit juice market is roughly around 10 per cent of the Indian non-alcoholic beverages market and is expected to grow by 35-40 per cent in the near future.