Dabur to take fizz out of Fanta and Appy

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Dabur India Ltd is set to try and take the fizz out of Coca-Cola’s Fanta Apple and Parle Agro’s Appy. According to sources, Dabur plans to enter the apple soft drink market this month.

The new drink, sources said, while matching the rivals on price, would seek to differentiate itself from the two established players by being non-fizzy. Dabur India officials, when spoken to, did not confirm or deny the development.

The new launch, sources said, was part of Dabur’s big plan to enter the non-cola soft drink market, which is reporting a year-on-year growth of close to 30 per cent. Distributor sources also confirmed the development, saying dispatches of the new product have commenced and it would be available on retail shelves and chillers across the country from early next month.

Dabur has aggressively established a portfolio in the packaged fruit juice market – both sweetened and unsweetened — and controls around 52 per cent of this pie. However, plain beverage has been an area where the company has been unable to make inroads. With this new launch, sources said, the company was hoping to address this big gap in its portfolio and also enter the low-priced beverage market.

Dabur’s juices today operate in the Rs 75-85 a litre price bracket, while other non-fizzy beverages are available for Rs 45-50 a litre. The new launch is expected to give the company an entry into this price band.

Fruit drinks are increasingly filling crates that were otherwise capped with fizzy carbonates in the Indian market. While Coca-Cola India already had a mango juice drink, Maaza, It upped the ante in 2007 by launching its orange fruit drink, Minute Maid. Rival PepsiCo followed with Tropicana Twister. With these two launches operated in the orange drink market, Coca-Cola India also introduced Fanta Apple, an aerated fruit beverage aimed at taking on Parle’s Appy Fizz.

The non-carbonated beverage segment is growing at almost double the rate of the carbonated one in the Rs 7,000 crore domestic beverages industry. The juice and juice-drinks market is pegged yearly at Rs 1,500 crore or 500 million cases by volume. Though the market for carbonated drinks is 10 times larger than fruit drinks, sources said the higher profitability of the latter might be the big pull factor for Dabur to enter here.