The fruit beverage industry is still in the nascent stage. The spectrum varies from well-entrenched players like Parle Agro's "frooti", Enkay Texofood's "Onjus" and "Life" godrej food's "jumpin" and dabur's "real". Leading foreign brands in the market

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The fruit beverage industry is still in the nascent stage. The spectrum varies from well-entrenched players like Parle Agro's "frooti", Enkay Texofood's "Onjus" and "Life" godrej food's "jumpin" and dabur's "real". Leading foreign brands in the market are PepsiCo's "Tropicana". There are other significant players like Noga, Xs and Refresh, but roadside vendors and stalls meet most of the consumer need. The Indian consumer, on an average, has also not awakened to the fact that there are a number of fruit beverages available in tetra packs and are hygienic and healthy to consume.

In this context, the industry needs to be studied to find the structure in terms of players, substitutes and others factors governing the success of leading players.

This report attempts to study the following:

Essay service for your The fruit beverage industry is still in the nascent stage. The spectrum varies from well-entrenched players like Parle Agro's "frooti", Enkay Texofood's "Onjus" and "Life" godrej food's "jumpin" and dabur's "real". Leading foreign brands in the market paper

To study and analyze the consumer preferences for the purpose of devising launch strategy consistent with the needs of the target segement.

Also to do a study of Indian beverages sector and provide company with required information to take informed decisions .

· Fruit beverages market in terms of major players, market size, growth and demand, market shares of players, segmentation statements and positioning of the various products available.

· The consumer segments and their habits and practices also have been studied along with

· To analyze the reasons for success and make a set of best practices and strategies for the players. The company profiles also need to be studied to be able to cross-compare and make deductions as to what are the best practices existing.

.further there is a immediate need for strategizing against the substitutes which overlap with the segments of this industry and which is important to build and strengthen market base.

WHAT DO WE WANT TO STUDY?

In broad terms, the major tasks in the project are to study the fruit beverage industry, with specific reference to orange juice which would include the following:

* Study the market size

* Study the major players, their market shares and production capacities, and their sources of raw materials.

* Study the substitute products (flavored milk, soft drinks, mineral water)

* Study the consumer attitude towards this concept

* Study the emerging trends (in products, packaging, pricing and promotion)

WHAT DO WE WANT TO ACHIEVE THEREBY?

The objective to study the above in detail is:

* To thoroughly understand the fruit beverage market

* To predict emerging trends in the packaged fruit juice sector, with specific reference to orange juice.

* To understand the competitive structure and analyze consumer attitudes and preferences in order to suggest an optimum marketing mix to the "PQR COMPANY".

METHODOLOGY:

The fruit beverage market has been studied mainly through publications and articles in magazines and newspapers, websites and data available within the case study..

This data has also been gathered under various market segments existing in the industry and the major consumer tastes and preferences.

For understanding consumer preferences survey method has been employed through questionnaires. Further questionnaires have also been administered to retailers in order to understand consumer segmentation and various competitors.

Informal talks with roadside vendors and fast food huts have also been used to gather data on the existing competition, promotion measures and brand awareness.

4. SUBSTITUTES

The substitutes market is the major threat sector for the fruit beverages. It comprises flavored milk, cold drinks, and mineral water. The fruit beverage industry faces tremendous competition from many substitutes available in the market. Some of the major substitutes are:

1. Soft Drinks (both cola and non-cola drinks)

2. Flavored Milk (Milda, Zip Sip, n-joi etc.)

3. Mineral Water

4. Other milk products like buttermilk and lassi.

4.1. SOFT DRINKS MARKET

Segments: Soft drinks are divided into carbonated and non-carbonated drinks. While Cola, lemon and oranges are carbonated drinks, mango drinks come under non-carbonated category.

Packaging: Soft drinks are available in bottles, cans and large PET bottles for home consumption.

Fountains also dispense them to cater to the demand of fountain drinks by on-the-move consumers who are price conscious.

This market has witnessed a growth rate of around 16 percent for the last two years as compared to the growth rates of 5%-6% in early 1990s and 2%-3% in late 1980s.

Segmentation

The soft drink market can be segmented in accordance with the point of purchase as:

· On -Premise: Around 80% percent of the consumption of soft drinks takes place on-premise, i.e., restaurants, railway station, cinema, etc. which gives a lot of competition to the fruit beverages which competes directly with take-home packs of fruit juices as well as squashes.

· At - Home: The remaining 20 percent of the soft drink consumption is for home.

The cola and non-cola segments are as follows:

· Cola: This accounts for 60 percent of the total soft drink market at the all India level. The brands that fall in this category are Pepsi, Coca Cola, Thumps Up, etc.

· Non-Cola segment which can be further divided into:

* Orange: This segment has a 19 percent market share of the total market. Fanta and Crush fall into this category. The product of PQR Company will face major competition from this category.

* Cloudy Lime: This segment represents 14 percent of the total market. Limca and Mirinda Lemon fall in this category. Limca is the largest non-cola brand and holds a share of around 82 percent of this market.

* Clear Lime: This comprises 3percent of the soft drink market. The major brands, which fall in this category, are Citra, Canada Dry and Sprite.

* Mango: Slice, Maaza and are mango drinks having a market share of 3 percent.

Consumer Habits and Practices

The competition from soft drinks market exists for fruit juices because the consumer segments are universal for both and the reason for purchase in both categories is almost the same.

· Consumers purchase soft drinks primarily to quench thirst. Therefore people traveling and not having access to hygienic water reaching out to soft drinks account for a large part of the sales. Not having access to hygienic water can also result in purchase of fruit beverages and it is here that soft drinks give them the hard battle.

· While there is no aversion to consumption of soft drinks by any age group, the main consumers of this market are people in the age group of 30 and below. Thus, the soft drinks directly compete with the fruit drinks, which are also targeted towards the same age group.

· Brand loyalty is high in the case of kids and people in the age group of 20-30 years. This again is a major threat to the fruit beverages market.

Some of the major strategies, which are being or have been adopted by the cola players to combat competition from the fruit juice market, are:

· Introduction of Diet Pepsi/Coke.

Diet Pepsi/Coke were mainly introduced to capture the health conscious consumers, whom they would have lost to the fruit drink market. They tried to position their products as fun drinks.

· Packaging:

Since the fruit drinks have been positioned as on-the-move drinks, the cola players have introduced cans and 500 ml PET packs. These players also switched back to 200ml bottles mainly to reduce the unit cost in the expectation that such a strategy would lead to more frequent buying.

· In United States, Coca Cola has launched a new product " Frozen Coke". This launch was the result of the company's belief that it would lead to legitimization of the product as a real beverage. (Source: Atlanta Business Journal, May 14-20,1999)

Distribution:

The distribution network of these drinks is very strong and widely distributed which gives a strong shake to the fruit beverages industry. Coke had 5 lakh outlets by the end of 1997 while Pepsi had 3.5 lakh outlets.

4.2. FLAVOURED MILK

Just like fruit drinks, flavoured milk is also positioned on the health platform. Companies are trying to project it as a fun drink with added flavours and innovative packaging.

Due to the perishable nature of flavoured milk, this segment has been dominated by regional players like Energee and Milda. in February 1999, Britannia entered in this segment at the national level with its offering named Zip Sip. Available in five flavours - pineapple, mango, strawberry, chocolate and cardamom, it is made from cow's milk and has no preservatives. It is offered in 200ml tetra packs.

Zip Sip has been positioned as a cool milk drink with Vitamin A that could help bringing about regularity in its consumption and not make it a one-off impulse drink. Due to its projection as a fun drink, the company considers all branded products in the soft drinks and fruit drinks as their competitors. Zip Sip has a vast distribution network with 4,50,000 retailers, targeting 50% of these for Zip Sip, which is a serious threat to the fruit drink business.

Tetra packs are also being used to sell fresh, long-lasting milk packs and ensure quality delivery. Also UHT (Ultra High Treatment) is being used. For these milk products, retailers opine that advertising is crucial for success. While in competition with fruit drinks, retailers are given a margin of around 15 % for flavored milk brands and they encourage more promotional schemes to boost sales.

4.3. MINERAL WATER

This was one of the most surprising finding of our project. Fruit drink sellers consider even mineral water as a substitute for to their offerings. The main assumptions are packs ensure quality delivery. Also UHT (Ultra High Treatment) is being used. Mineral water essentially caters to the demand of travelers and affluent customers which is also the target market for fruit beverages. The consumer's perception as regards contaminated water has also undergone a change and international as well as domestic tourists accept mineral water as a travel companion. The bottle can be

contaminated water has also undergone a change and international as well as Segmentation

The mineral water market is segmented according to the type of consumers:

· Foreign Tourists: Foreign tourists have been the main consumers of the mineral water as they face a lot of digestion problems due to different food habits.

· Domestic Tourists: Domestic tourists have switched to mineral water mainly because of safety and hygiene factors.

Fashion Conscious: Like soft drinks, drinking mineral water is also considered fashionable by some people.

The mineral water consumer is mainly in the age group of 20-35 years and is an educated middle class person. This is also the segment of fruit drinks, which have usually been positioned as fun and health drink for young adults.

The mineral water market is also segmented along pack sizes:

· One litre bottle: it is meant to spell safety and security for consumers. It is positioned on a prestige platform for the achiever segment - who like to make a fashion statement by drinking mineral water. This segment gets the maximum sales.

· 500ml bottle: This size has been introduced in the market to target the individual and local travelers.

· PET bottles: The size of the PET bottles varies from 10 to 20 litres. These are mainly for institutional sales (Wedding parties, Hotels, Corporates,

2.5. CONSUMER HABITS AND PRACTICES

The Indian lifestyle has a traditional predilection for fresh fruits and vegetables or those processed at home. People go in for fresh fruits vending from kiosk fountains, which produce instant juices from fresh fruits in the presence of the consumer. One reason is the unavailability of hygienically produced and well-preserved products with the use of preservatives. The fact that it is packed denies its freshness. This was also a reason why some of the real but branded fruit juices launched in the late 1980s and early 1990s did not succeed. Taste is often the secondary consideration in the Indian market for beverages. Fruits juices also lose on roughage, which is an important part of fruit nutrition. Few people know the difference between a juice and nectar.

In general, the Indian consumers have become health conscious now and are looking for healthy and natural and appetizing juices. They are moving away from synthetic drinks to natural and wholesome fruit juices. At present

· Per capita consumption of juices in India is estimated at a fraction of a litre -200ml.

· The consumption of fruit juices in take-home packs is estimated at 17250 mn lt.

· Consumers go for convenient and economy products. So small packs are well suited for travelers and children and large take home packs for families and price conscious people.

· Availability in chilled form and brand awareness plays a crucial role in purchase decision. This has implications for the need for availability of the product and in the right form.

· While there is no aversion to consumption of fruit beverages by any age group, the main consumers of this market are people in the age group of 30 and below. Young adults and teenagers predominantly consume tetra pack drinks.

· Brand loyalty is very low, as all the products taste the same. But brand loyalty is high in case of kids. Though there is a lot of difference between brand awareness and brand loyalty.

· Consumers are money conscious where the purchase of fruit beverages is concern.

· Consumers are not ready to explore the market. They do not want to change their taste and are stuck to their old brands. Orange and other drinks are slowly picking up and breaking the loyalty towards old brands.

2.6. PACKAGING TECHNOLOGY

With the change in consumer preference for the product, there is a change in the package preference. Tetra-Pack India, a part of the $10 billion Tetra Laval group, has become the major source of brick cartons amenable to aseptic packaging and impairing long product shelf life to the foods.

Packaging has emerged as the 5th P of marketing. Especially in context of food products, packaging has been designed and used to connote wholesomeness and provide convenience.

Coming to fruit drinks, the possible packaging could be using

· Food grade polyethylene.

· Glass bottles

· Canning

· Aseptic packaging

Although a small volume of branded fruit juices are sold loose (an example is hpmc), the loose fruit juice market consists mainly of unbranded players (mainly the restaurants).

In spite of the cost advantage food grade poly packaging is almost out of question because

· It does not provide the kind of shelf life required to store seasonal juices for the off-season.

· It is not tamper proof and hence is not perceived to be wholesome.

Glass is burdened with the cost disadvantage which can be overcome only by giving up the on the move image. This means a loss of one segment of the market. However glass is expected to come back in a big way owing to its environmental friendliness coupled with the increased environmental awareness. A lot of research is also on the way to make glass cheap and light in weight.

All most all the major players in the fruit juice segment have positioned themselves as either on the move / nutritious/fun to have drinks. To project this image, tetra packs have served the best. (See appendix 1)

Canning is very useful in terms of the longer shelf life but has constraints in the form of time and effort required and the technological know how.

Consumer Habits and Practices

· Consumers are growing more health conscious and are morecareful of their drinking habits.

· Brand loyalty is very low as all the products taste the same so they can buy just any product which is on the shelf, same as that of soft drinks and fruit beverages.

· Availability in the chilled form and brand awareness plays a crucial role in purchase decisions.

· While there is no aversion to consumption of mineral water by any age group, this product is mainly consumed by the people in the age group of 20-35 years who have less attraction of soft drinks or other synthetic drinks whereas youngsters look in for soft drinks and fruit beverages to quench their thirst.

· Visibility is another factor that should be taken care of by the companies as consumers are not very brand loyal and consume whatever is in front of them.

4.4. OTHER MILK PRODUCTS

As the major demand for fruit beverages is during summers, milk by-products like buttermilk and lassi also serve as major substitutes. They compete in terms of low price as well as easy availability. These drinks are also considered important from the health

. INDUSTRY ANALYSIS

A cross company analysis needs to be done to analyze the fruit beverage industry in the following heads:

· A cross comparison and preliminary analysis

· Analysis of reasons for the success of leading players to identify the sources of competitive advantage

· Make a set of best practices to ensure success for any player

5.1. CROSS COMPARISON

The players in this industry have been around for less than five years and they have adopted a mix of strategies to grab market shares. While some strategies are widespread among all the players, some of them are exclusively used by only particular companies, which can presently be said to be the major success factors for them.

The crucial factors for success in this industry are identified as follows:

· Sourcing of raw materials

· Technology used for processing

· Product portfolio and variants produced

· Packaging technologies used

· Distribution strategies, logistics and reach in the market

· Strategic alliances and joint ventures to gain competitive advantage in packaging, distribution and product formulations.

The players can be compared across some universal factors such as:

· Source of raw materials

· Product portfolio and variants

· Packaging technology

· Distribution reach and logistics

· Promotion schemes.

· Strategic alliances.

· Exports

Table 5.1 Cross comparison of major players in fruit beverage market

PARLE AGRO ETL GODREJ FOODS NOGA DABUR FOODS PEPSICO

Raw Materials Largely from India Oranges from Florida and Brazil, Alphonso mangoes Alphonso mangoes for Xs, (others n.a.) Local Sourced from Brazil Apples from China, pineapples from Thailand and Phillipines. Oranges from Brazil and USA

Product portfolio Frooti, Appy, Yo Frooti, Yo Appy(drinks) Onjus (orange juice), Life (mango nectar) Jumpin (drink), Xs (nectar), Refresh (drink), Jumpin Masti (nectar) Juices, nectars and squashes Real (juices and nectars) Tropicana(100% juice)

Positioning Fun drinks for children Onjus-natural taste, on the move drink; for young adults), Life-fun drink Jumpin as a fun drink, Xs as a nutritious drink cum snack NA Started as on the table family drink and shifted to on the move drink.Currently as soft drink kind of beverage with added health benefit. As a breakfast food

Flavors Mango, orange, apple Mango, orange Mango, orange, apple, pineapple, guava, litchi Orange, pineapple and mango Mango, pineapple, orange, mixed fruit Orange, pineapple, grapes and mixed(orange and white grape)

Production facility 7 plants 1 plant at Vapi Plants at Mandideep, Bhopal, Mumbai, Mysore, Wasik Plant in Nepal Concentrate from plants in Florida, blended locally under its supervision at Dynamix dairy Industries' a plant in Baramati, Maharashtra

Packaging Tetra packs (200 ml and 300 ml) Tetra packs (250 ml and 1 litre take-home) Tetra packs Cans and tetra packs (250 ml, 300 ml and 1 litre) Tetra packs (250 ml,350 ml,500 ml and 1litre) Tetra packs (500 ml and 1-litre)

Distribution Franchises, stockists, and strong rural network 302 towns and outlets like general supermarkets and departmental stores 50000 towns, with distributors and retailers. Reach in places like Leh, Sikkim and Guwahati Kiosks, 150 dealers across the country Network of 80,000 outlets in 280 cities and big towns. Comprises of depotsàstockistsàretailers. Delhi, Mumbai, Hyderabad and Bangalore.

Advertising agency Advertising Avenues DMB&B NA. NA NA

Sales segments Institutional sales minimal (airlines, hotels, railways) Share in all income segments, institutional sales in military canteens, airlines, hotels and clubs Middle and lower income segments, Primary market- Mumbai, strong institutional sales, efforts to make a mark in retail segments Upper and middle income classes. Institutional sales (airlines, marriage orders) and special occasions), almost no competition in Gujarat Upper income segments due to high price and metropolitan cities.

Alliances none Blue Diamond Almond Growth Association Foreign and Indian partners for production and marketing Elopack (Norway ) for packaging technology Tropicana was acquired by PepsiCo.

Exports Europe, American and Arab Largest exporter of juices, pulp and concentrates to Europe and North America 20% of total manufactured volume to west Asian countries None None NA

5.2. ANALYSIS OF REASONS FOR SUCCESS :

The fruit beverage industry is growing at a pace of 15% per annum. And the market is still in a nascent stage. In the last four to five years, three players have emerged as the market leaders: Enkay Texofoods with Onjus, Dabur with Real and PepsiCo with Tropicana. The challenge in front of the leaders currently is to expand the market further as well grab the largest shares.There are old as well as new players like Godrej foods with Jumpin, Xs and Refresh, Parle with Frooti and NOGA. The market leaders have adopted various strategies and made many strategic moves to emerge as leaders. Following is the analysis of the three current market leaders:

ONJUS

· This drink has cashed in on the first mover advantage

· The brand has consistently followed the ATA model of availability, taste and affordability.

· Onjus sources its raw material from Brazil and Florida and has mixed it with Indian mandarin to cater to Indian tastes.

· It targets all the income segments and is priced comparatively lower than Tropicana and Real and has a large chunk of institutional sales.

· It has built a strong distribution network spanning 302 towns.

· It has emerged as the largest exporter of fruit juices , pulp and concentrates to Europe and North America

· Onjus initially used a penetration pricing strategy and then hiked the prices to come at par with other brands and skim the market.

· The Onjus controversy over sourcing of its raw materials did not harm its position due to its strong image in the market.

· It also has a strong promotional drive to push sales.

REAL

· Dabur learnt from its failures with real. Initially priced higher than Onjus, it lowered its price.

· Real has the advantage of the brand name 'Dabur' which is associated with health in India.

· It also changed its packaging, positioning and advertising to give Real a new look.

· The positioning was changed from on-the-table to on-the-move to take advantage of volumes. It is also promoted as a soft drink with additional health benefits.

· Dabur incurs low cost of production owing to import of fruits from Brazil than European traders.

· With the alliance with Elopack, Norway, it has a superior packaging of 9-layer foil. It also offers a tetra pack with a cap that can be screwed back. Imported packaging technology gives Dabur an upper hand.

· Real stresses on sweetened tastes. By this, it caters to Indian taste preferences. (Indians find Tropicana juice bitter).

· A strong distribution network with enough margins for dealers.

· Continuous innovation has helped Dabur to keep pace with market (plans to come up with vegetable juices)

TROPICANA

· The main advantage is that Tropicana is a well-established brand in US.

· It has a strong research base, which helps it in coming up with new flavours.

· To cater to Indian tastes it has come up with a special Orange and White Grape blend.

· Global sourcing strategy enables it to provide quality products.

· In terms of distribution, this brand has the greatest advantage. (Pepsico has more than 600,000 outlets in India)

5.3. WHAT ARE THE BEST PRACTICES?

Since the industry is still in the nascent stage, the practices adopted by the leaders can give a fair idea of what practices would lead to the success of any player. These practices are also combined with the trends in the western fruit beverage market.

The success of the market leaders suggests that:

· State of the art production and packaging technology is a must. This gives an edge in packaging and ensuring freshness of product besides enhancing the image.

· A strong distribution network is essential for ensuring availability to fight competition from the other players and also the substitutes which have a strong distribution reach.

· Companies should take into account the regional taste preferences and build products to serve the same. Various concoctions and formulations in the US and other foreign markets suggest that such strategy is necessary to live the image of the company and remain in the forefront.

· Innovations in terms of ethnic flavours and mixes will pay off. (Kool Kokum)

· Global sourcing strategy will give an edge over other players in terms of both cost and quality advantages.

· Strong advertisement especially media campaigns would help the players in the fruit beverage market to combat competition from soft drinks, flavoured milk, mineral water and unbranded sector.

From the trends observed all around the globe, one can see that:

· Continuous innovation in product formulations, in terms of blends, fortifications and health concoctions would become a necessity in future to differentiate products. Such a strategy would help players to remain in the market.

· New forms of packaging like resealable tetra packs, screwable caps, plastic on glass etc. suggest that fruit beverages continuously require small revisions in terms of product formulations and packaging and also need strategic changes in marketing aspects like promotion, pricing volumes sold, advertising and promotion.

The entrants and existing player need to appreciate the fact that growth in the market with onslaught of global competitors will have to be met with better preparations in marketing strategies and continuous promotion, advertising and product changes will be required to fight competition.

There is another determinant to success of the players in this industry and this includes the tropical fruit market scene in Asia and the world.

5.4. THE TROPICAL JUICE MARKET IN ASIA

The tropical juice market in Asia can give some insights into the future of the market in India.Way back in 1998, despite the growing popularity of tropical juices, there were indications that traditional suppliers would not be able to serve the market. There were adverse economic and weather conditions also in Thailand and India. Mango production In India was hit hard by higher than normal temperatures, followed by floods. There were certain adverse conditions in Thailand such as weather conditions, economic crisis, depreciation in baht, low purchasing power and less import demand, leading to shortage of transport containers and a rise in shipping costs.

This suggests that such developments, whatever they are, affect demand. This is evident in the fact that there was a threat to Asia's strong position in the international juice market even when demand for tropical juices grew.

In the global market, the European and US importers are the major buyers of tropical juices. These importers mainly demand mixed tropical drinks. In Europe, many juice concentrates (including guava, banana, papaya, and others) are mixed with orange and pineapple to form nectars and special tropical blends. Netherlands is the largest continental importer of juices for mixing purposes and usually does so for resale to the rest of Europe.

In the U.S., the tropical juices are also enjoying increasing popularity. From 1994-1996, the total volume of banana juice imports grew by 15 percent whereas imports of tropical juices excluding banana and pineapple increased by 50 percent during the same period, both in volume and value terms.

The long-term trend in the U.S. juice market points toward increasing popularity for tropical juices. An important reason being sighted for this increase is the growing number of Asian and Latin American immigrants, which in turn has sustained the growth of ethnic based food stores. A more recent development is the popularity of multivitamin drinks during hot weather. These drinks are prepared by mixing juices such as mango, papaya, guava and others with vitamins and health related supplements.

The following fruits have the following demand patterns in the world:

Pineapple

The price of pineapple juice has increased over the last couple of years due to Asian production shortfalls, which have caused unrest among the importers worldwide. Philippines and Thailand are largest pineapple suppliers by volume. Shrinking demand and shortage in production has led to a 13 percent reduction in U.S. imports.

Unlike the U.S., demand in Europe continues to be strong despite the high prices. EU pineapple juice imports have doubled over the past ten years, to nearly 100,000 metric tons per year. Imports of this magnitude began in 1994 and have hovered at this level. This juice is especially popular in the Mediterranean countries where temperatures are high during the summer season.

Thailand is the largest pineapple concentrate exporter to the European Union, normally accounting for 25 percent of all imports.

Mango

The concentrates from Central and South America enjoy popularity among U.S. and European juice importers.

Banana

Normally supplied in large quantities by India, buyers have begun to look for alternate sources as the supply and the quality of banana puree have been put to question because of some bad seasons in last few years. Costa Rica dominates the U.S. market, supplying over half of all imported banana puree.

Other Fruits

In the U.S. other tropical juice imports (except banana and pineapple) have shown steady growth in recent years. Brazil and Ecuador are the two major players who hold the top spot in the export of juices.

India is the main supplier of white guava whereas the pink guava (more popular guava variety for juice making processes) is exported by Malaysia, Brazil, South America and Venezuela.

5.5. STRATEGY AGAINST SUBSTITUTES

The substitutes pose a major threat to this industry. One reason is that consumers are still not very much predilected towards health drinks. They get a wide variety to choose from when they buy from the same shelf. The same shelf contains, cold drinks, flavored milk and mineral water.

6. TRENDS IN THE INDUSTRY:

Ø Current growth rate of the fruit beverage industry is estimated to be 50-60% above the last year. The decibel levels of Real and Tropicana and the gap that existed for packaged juices have spurred this growth according to the industry analysts.

Ø Consumption of fruit juices in take home packs is estimated at 17250 million liters and could increase to 21570 million liters in the coming few years. The entry of other global players, who are entering both with and without domestic alliances, will expand the domestic market faster with their promotion strategies. These strategies would mostly take up the form of a full-fledged media campaign.

Ø There are few changes in the consumer behavior as well, which have spurred the market for fruit juices viz

· Consumers are turning away from the high-calorie, sugar loaded juice drinks in favor of more natural, vitamin-fortified products.

· Culture of orange juice with break fast is growing very fast.

· In the western markets, all-natural juices are the strongest growth leaders and are slowly replacing the concentrated fruit

beverages and novel fruit drinks.

· Also, consumers increasingly prefer chilled or ready to drink products over from-concentrate variety.

The growth of white spirits market is causing juices to grow as well. It is acknowledged that rum or vodka taste best with a variety of juices or juice mixtures, Gin goes well with grape fruit juice and Bourbon Whiskey can be mixed with Peach, Apricot, Mango, Papaya and orange juices. Owing to the same trend some fanciful juice mixtures like Raspberry with Mango have started gaining popularity. (Source: Nations Restaurant News.15th March 1999)

The developments in the western markets have always have had a trickle down effect on the Indian market, so a lot of changes can be anticipated in the product & packaging of these products in the near future.

Ø With respect to the fruit juice market, the two main drivers identified are the quality of the juice and the consistency of the quality. This means that the Indian consumer has to be convinced that the juices are pure and do not contain any preservatives. (Source: THE ECONOMIC TIMES, Brand Equity, 9th Feb, 2000)

Ø Energy has emerged as another option for the positioning of fruit beverages. Fruit products companies in the west have already begun using this ground. (Drug Store News. 27th Sep.1999)

Ø Ocean spray of Weltfleet farms brand relaunched its 100% juice line named as Ocean Spray premium 100 percent juice. The products contain cranberry and red grape juices and emphasizes health. The company has also launched cranberry juice cocktail plus (27 percent juice) having vitamin C, A and E as well as 130 percent of daily-recommended allowance of calcium.

Ø Vitamin fortified juices have become the rage. Sales of calcium fortified Tropicana pure premium orange juice, rose 173 percent since 1997. Tropicana has three offerings of calcium-fortified juice and one offering of orange juice with Vitamin E and C.

Ø Tropicana goes against Coca Cola's Minute Maid brand. Minute Maid has tropical blends and fortified natural juice products like orange tangerine and orange passion. In answer Tropicana has similar newcomer varieties like Tangerine orange and tropical orange. (Source: Discount Store News 22nd March, 1999)

Ø A few ethnic flavours like Kool Kokum's Jaljira and Regent Agro's Coco Sip are into the market and are expected to be a hit.

From these trends we see that a number of combinations in terms of fruit juices mixture and fortifications (Vitamins and Minerals) can be formulated and be used to expand the market.

Ø In the bottled juice market there are well known brands in specific niches, such as Welch's in grape juice niche and ocean spray in cranberry juice niche. They have enjoyed large volumes by building on publicity and research, claiming the health benefits of grapes and cranberries. Example: Cranberry juice helps in preventing urinary tract diseases and grapes have natural antioxidants to reduce the risk of some cancers and heart diseases.

Any company can create a niche for itself by concentrating on a particular juice and then advertise to cash upon the desired tastes demanded by the consumers.

Ø Owing to the demand for convenience, plastic packaging has emerged over glass packaging. Half Moon Bay California created new packaging for its natural refrigerated juices. The new bottles are made of recyclable HDPE (High Density Poly Ethylene) plastic, which extends product shelf life by 10 percent and has tamper resistant resealable screw on caps.

Ø Tetrapak is experimenting with an innovative "Tetrafino " packaging. This is expected to be cheaper but the shelf life offered would be maximum 45 days. The main advantage would be less cost and more volumes with more shelf like and further revenue generation.

APPENDIX

What is Aseptic packaging?

Aseptic packaging is the packaging of a product in germ free ingredient. The product to be packed should be aseptically processed. There is no point in trying to protect a product from external contamination if it already consists of spoilage causing organisms.

What is aseptic processing?

Aseptic processing involves, heating the product rapidly to a temperature of 137-140 degrees centigrade, holding it at that temperature for a few seconds and quickly cooling down to room temperature. This kills spoilage causing bacteria without affecting the taste or nutrients in the product. The entire process takes place in a closed, pre-sterilized system to prevent re-infection. To safe guard the high microbiological quality imparted by the process, the aseptically processed milk is conveyed to the packaging machine in a closed, pre-sterilized system and metered aseptically to packs, which are sterilized and formed inside the machine.

What is Tetra Pak packaging?

Tetra Pak is a brand name, which has come to imply the technology. This essentially consists of 6 layers of packaging. (See figure below)

1. Polyethylene: seals liquid in

2. Polyethylene adhesive layer: Gives extra strength

3. Aluminum: keeps flavor in and light, odors and oxygen out

4. Polyethylene: for adhesion

5. Paper board: gives rigidity and strength.

6. Polyethylene: keeps moisture and germs out.

Advantages of tetra packs:

1. Allow a larger shelf life with no additional preservatives.

2. Original taste and flavor of the juice is preserved

3. Can be stored and distributed without refrigeration

4. Tamper evident and hence rules out possibility of adulteration or contamination.

5. Makes it possible to transport the nutritional but perishable product across long distances.

6. Juices of even seasonal fruits can be made available to the consumer throughout the year.

Limitations of Tetra Packs:

1. Cost is high as compared to pouch packaging. One litre pouch pack would cost about Rs 3.50 whereas the same sized tetra pack would cost about Rs.5.50. (there are some arguments against this, to quote B.L.Venkateshwar general manager, Parle Agro "Though tetra packed fruit drinks are expensive upfront, once analyzed they give value for money, a 200 ml Frooti is priced at Rs 8 so is a 300ml fizzy soft drink. But the thirst quenching ability of the former is probably more. Not to forget that it has extra nutritional value attached to it"(source: THE ECONOMIC TIMES, 22/4/99)

2. The product cannot be seen by the eyes. (This is overcome by vivid designs on the pack.)

3. Tetra Pak market faces excessive duties and taxation. May be because of this the Tetra Pak market is growing at only 10-12% when the bottled beverage market is growing at a rate of 25%/annum.

What is canning?

It is the filling of the fruit juice or any product in a can, hermetically sealing it and then heating up to 125 degrees Celsius for approximately 20 minutes. This process eliminates any microbes but adversely affects the flavor and texture of the product. An alternative solution was found in aseptic packaging, but until recently, traditional aseptic packaging using thin-walled metal cans have been considered impossible.

Now Beverage presterilization has emerged to overcome the limitation of canning. Here instead of sterilizing the product inside a can, the beverage is pre sterilized for just a few seconds at 140 degrees Celsius before filling the cans aseptically.

Advantages of canning:

Provides better opportunities for improving the products image.

Makes product suitable for vending machines.

Environment friendly. (The beverage can is easy to recycle)

Limitations of canning:

This is suitable only for carbonated beverages. (Carbonated beverages produce their own pressure, which supports the walls. Unpressurized don't do this and the can feels floppy).

The solution came as introducing an extra stage into the process which is, placing a drop of sterile liquid nitrogen placed on top of the product before the can is sealed. When the liquid nitrogen warms up it evaporates, pushes oxygen out of the headspace and pressurizes the can.

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