Time was when every summer, cola brands ramped up their ad budgets. New jingles, catchy punch lines and star campaigners sought consumer buy-in for the promise of carefree youthfulness packaged in a bottle. The narrative has changed sharply in the past few years; and this year, in keeping with rapidly shifting consumer tastes, the big beverage makers are promising health, ethnic flavours and low sugar fixes while getting more aggressive with fruit juices in their portfolio.
The summer of 2019 demonstrates a maturing of the juice category, say companies and marketers. Beverage brands initially flocked to the juice market as colas fell from grace. But in the past year, as consumers have become discerning, brands have become innovative, packing local flavours into global brands.
Last week, the country's largest beverage maker Coca-Cola launched three fruit-based drinks under the Minute Maid portfolio, aimed at expanding its ethnic beverages range. The move comes following the rollout of Minute Maid Colour, a grape-flavoured drink in Tamil Nadu earlier this year.
Rival PepsiCo is also ramping up its Tropicana Slice portfolio with local drinks, while Dabur and ITC are adding ethnic flavours to their juice brands Real and B Natural and Paperboat (Hector Beverages) is increasing its local variants.
According to industry estimates the demand for packaged ethnic drinks (a subset of the larger juice market) has increased by over 30-35 per cent in the last three years. And demand for juices, according to Euromonitor, is growing at nearly 17 per cent year on year, driven largely by value-added juice drinks, that is, beverages that have juice content upto 24 per cent. This category is growing at nearly 16 per cent per annum, the research agency says.
In absolute terms, the juice market is estimated at about $3.6 billion in India, with 72 per cent of that currently going to corner stalls and small eateries, according to industry experts. The most popular flavour is mango, followed by orange, watermelon, grape, pineapple and others. The market, they say, is dominated by Coca-Cola, Parle Agro, PepsiCo and Dabur, which together accounted for nearly three quarters of retail value sales of juice in 2018 and their mango-based drinks were key growth drivers.
Euromonitor says that demand for juice is expected to climb further in the future. The entire juice category in India is forecast to grow at 16.5 per cent per annum, in value terms, from 2019-2023. The 100 per cent juice category (also a subset of the larger juice market) will grow by 9.4 per cent a year and juice drinks are expected to grow at 14.8 per cent per annum.
“We are taking our summer campaigns a notch higher this year across the portfolio,” said a spokesperson for Coca-Cola India.
“In 2019, we have launched four beverages under the Minute Maid brand. The idea is not just to expand our offerings under Minute Maid but to also evolve it into a master brand with fruit nutrition at its core," the spokesperson said. Coca-Cola is also localising its portfolio aggressively, tapping into the demand for drinks traditionally brewed at home using local spices and fruits.
Hemant Malik, divisional chief executive, foods, ITC says the company has a gamut of initiatives planned for the summer. “B Natural has introduced an entirely new range of premium juices and beverages in a transparent PET format, which will be the first of its kind in India, without any added preservatives.” The company is also adding a watermelon variant this year.
CavinKare, which began its transition towards low-sugar and no-preservative juices two years ago says its spend in the category has increased three times. “There are product innovations from multiple brands that are helping the industry grow,” says B P Ravindran, business head for beverages and dairy, CavinKare. The company has launched tender coconut water and a milkshake lite variant with no added sugar and preservatives. It expects almost 55 per cent of its beverage business to come from products such as these this summer.
Experts say that as consumers increasingly spurn fizzy drinks, the pressure on beverage companies to up the innovation quotient on juices will only grow. As Coca-Cola's spokesperson says the idea is to build a diverse beverage portfolio attuned to unique consumer insights and preferences. The focus is on creating products, he says, that appeal to local tastes. Juice brands clearly have their task cut out now and for the future.