India’s packaged juice market has charted a high growth trajectory, thanks to its easy availability, anytime-anywhere consumption, and convenience.
Within the beverages market, the fruit-based beverages category is one of the fastest growing categories, and has grown at a CAGR of over 30 percent over the past decade. As of March 2013, the Indian packaged juices market was valued at Rs 1,100 crore (~USD 200 million) and projected to grow at a CAGR of ~15 percent over the next three years.
The packaged fruit juices market can be divided into three sub-categories: fruit drinks, juices, and nectar drinks. Fruit drinks, which have a maximum of 30 percent fruit content, are the highest-selling category, with a 60 percent share of the market. Frooti, Jumpin, Maaza, etc. are the most popular products in this category. Fruit juices, on the other hand, are 100 percent composed of fruit content, and claim a 30 percent market share at present. In contrast, nectar drinks have between 25 and 90 percent fruit content, but account for only about 10 percent of the market.
The rising number of health-conscious consumers is giving a boost to fruit juices; it has been observed that consumers are shifting from fruit-based drinks to fruit juices as they consider the latter a healthier breakfast/snack option.
Dabur is the market leader in the Indian packaged juices market with its brands Real and Real Activ. Other players include Parle, Fresh Gold, and Godrej. Some of the other brands of fruit juices and drinks include Frooti, Appy, Mazza, Minute Maid, Slice, Fresh Gold, and Del Monte. Considering the attractiveness of the segment, diversified consumer food companies such as ITC are working towards making a foray into packaged juices.
As per studies, the most preferred pack size is the individual (small) pack which is convenient, and easy to carry and consume. These are in great demand as out-of-home consumption is on the rise. Tetrapaks are most popular among manufacturers as well as consumers. Some companies are also offering their products in tins (eg Del Monte) and PET bottles (eg Mazza); however, they are more expensive than Tetrapaks, which adds to production costs, and, as a result, affects the market price.
Fruit juices have created a space for themselves in regular household menus, as a part of a family’s breakfast, social gatherings, and evening snacks. As a result, consumers are picking up multiple family packs at one go, which is an emerging consumption trend.
There are several reasons behind the growth of the Indian packaged juices category: Changing consumer lifestyles, increased health awareness, hygiene concerns, growing category of informed buyers, rising disposable incomes, booming modern retail, habitual purchase, and introduction to new flavours.
Among all challenges, it is difficult to control the cost of production at the price points of juices, primarily because of rising food inflation. The continuous, year-long supply of raw materials, and the non-stop production of juices for the full season, is another production-linked issue which needs to be managed carefully. Also of vital importance is controlling transportation and logistics costs.
Packaged juices are gradually cementing their place in the urban household in the metros and tier I cities; however, replicating the same success in tier II and III cities is still a struggle as residents in these regions still prefer fresh juices over packaged ones because they are comparatively cheaper, and also in sync with the traditional belief that juices are best consumed freshly pressed.
It is appropriate to say that the packaged juices market in India is still evolving. As there are many national and international brands on the verge of succeeding and expanding further into the field, new entrants can also cash in on this opportunity by positioning/promoting packaged and bottled fruit juices as part of the consumers’ daily diet. Simultaneously, it is critical to ensure affordability for consumers, while maintaining the hygienic aspects and quality of products throughout the year.