Even as the two soft drink stalwarts _- Coca-Cola and Pepsi are slugging it out, the Rs 400 crore tetrapak market is abuzz with activity. Two new brands, Parle Mango and Life, have been launched in quick succession. And established players are consolidating their presence in tetrapaks.
More than a decade after India's first tetrapak drinks, Frooti and Appy, were launched in the mid-eighties, there is a new product from the house of Parle. While the first two were launched by Prakash Chauhan's Parle Agro, Mango is currently being test-marketed by elder brother Ramesh Chauhan. Then there is Life, a mango juice from Enkay Texofoods, which already have the Onjus brand. And Dabur is fine-tuning its strategy for Real fruit juice which it launched two years ago.
Says Upendra Namburi, brand manager Parle Agro, "This is a sunrise industry and the entry barriers are not high. Consumers are more health conscious and are looking for healthy, natural and appetising juices."
The popularity is reflected in the market growth. Tetrapaks which account for 10 per cent of the total Rs 4,000 crore soft drink market have been growing at the rate of 20 per cent. It is divided into three segments _- fruit drinks, juices and nectars. Until three years ago, the market, which largely consisted of fruit drinks was growing at 30 per cent. This was dominated by Parole Agro's Frooti and Godrej Foods' Jumpin Masti.
The new products though are all in the nectar or the natural juice segment. Says B. L. Venkateshwar, marketing manager, Parle Agro, "The tetrapak market is witnessing expansion with these new players launching products in niche segments like nectars and juices." As a result, fruit drinks are growing at 10 per cent compared to the 30 per cent growth rate of juices and nectars.
A recent McKinsey study put the market size for fruit juices at an astonishing Rs 2000 crores. Says Sunil Deshpande, marketing manager, Enkay Texofoods, "There has been a change in habits, needs and attitudes in the country in the past couple of years."
Even so, the Indian tetrapak market is still at a nascent stage. Take the case of market leader Parle Agro. Despite enjoying a market share of 70 per cent, market expansion came only recently. It was the launch of the larger 250 ml packs _- Yo Frooti and Yo Appy that generated some kind of fizz in a lacklustre market.
Says Namburi, "The market is developing and we expect it to be segmented according to pulp content in a few years' time." Adds Sheetal Mehta, assistant manager, marketing, Godrej Foods, "As the market for tetrapaks develops, there is a natural progression from drinks to nectars to juices."
Also the market is changing. While traditionally fruit drinks were aimed at children, the new brands like Onjus, Life and Real are focussing on young adults and professionals. Says Mehta, "We would like to remain in the drinks segment for kids but we expect nectars and juices to corner around 25 per cent of the market."
So Life, a mango nectar from Enkay Texofoods is targeted at young adults between 19 to 28 years. It is positioned as a natural fun thirst quencher for fun-loving, health conscious youngsters.
Then again, as soft drinks are an impulse buy, companies are focussing on in-home consumption as well as on-premises consumption. Although fruit drinks focus strongly on out-of-home consumption, the juices and nectars have been concentrating on takeaways or in-home consumption.
In the case of Onjus, around 60 per cent of its sales are from in-home consumption. The company introduced the one litre pack as a major initiative to boost in-home consumption. Today, it sells around 50,000 crates of one litre packs per month, while sales of the 250 ml have been close to 1.5 lakh crates per month.
Says Sunil Deshpande, marketing manager of Enkay, "Although on-premise sales is always higher, consumers are patronising the larger packs for their convenience and economy."
Spurred by the success of Onjus, which was launched in April 1997, Enkay texofoods decided to launch a mango drink in the nectar segment. But while most manufacturers first entered the category with mango and then went on to launch other flavours, for Enkay, mango was only a sequel to Onjus orange juice.
Says Tulsi Goel, managing director Enkay Texofoods, "The usage and attitude studies conducted by us revealed that awareness and consumption of mango juices was highest at 59 per cent, so we decided to launch his flavour."
Jagdeep Kapoor, who heads Samsika Marketing, who has done a need assessment exercise for Enkay before launching the marketing drive believes that the natural fruit juice segment is growing at the rate of 20 per cent per annum and is expected to grow at the rate of 50 per cent in the next few years. The reasons: The category has a larger share of voice with the new entrants coming in and the changing trend of consumers moving away from synthetic drinks to natural wholesome fruit juices.
Onjus and Life are both positioned on the natural plank. This is not the case with Frooti, which has not changed its positioning from that of a fun drink for all occasions. Says B. L. Venkateshwar, marketing manager, Parle Agro, "We are more in competition with the colas and aerated drinks than the natural fruit juices. It is a niche segment restricted to the metros." Parle Agro is targeting children and youth between the ages of four and 14 and has stepped up its marketing drive in the last couple of years.
Says Venkateshwar, "With the cola wars hotting up we have had to be more affordable and visible." As a result, Parle's ad budget has gone up to Rs 6 crore from Rs 4 crore. At the same time the company has invested another Rs 8 crore in sprucing up its act in outlets. "Brand loyalty does not count much in this category. What matters is availability. We have invested in product promotions and hardware like refrigerators bearing the brand colours and logo."
Godrej foods' Jumpin has positioned itself as the most exciting and wanted cold drink for children. Although the company is only in drinks at the moment it has not ruled out the possibility of entering the nectars and juices segment. Jumpin has been focussing strongly on providing a variety of flavours. Says Mehta, "Although mango accounts for two-thirds of our offtake, as a proportion of sales it is on the decline. Thirty per cent of our business comes from pineapple, orange, litchi and apple."
But though Frooti is sitting pretty at the moment, the entry of the new albeit smaller brands is giving it reason to think. Says Namburi, "It would be foolish to say they will not eat into our market share. But what ultimately matters here is distribution and volumes, which are our inherent strengths." And it is distribution strategy that the new players are focussing on. Says Mehta, "Most of the battles are fought at the retail level. Hence distribution infrastructure, reach, seasonality and fresh stock are vital factors."
Also the synergy in distribution with existing businesses makes it easy for the new players. Dabur, for instance, is using its existing distribution network for its food products to push sales of Real.
At the moment though, Onjus, Real and Life may be niche products compared to Frooti and Jumpin. But with more choice, it is only a matter of time before the tetrapak market, like most other product categories will witness further fragmentation.