MIMD PROJECT REPORT

BY:
Shoubhagya Ranjan Mahakud
IIPM,Delhi
 TABLE OF CONTENTS

S.NO CONTENT PAGE

1. Introduction 4

2. Objective of the Study 5

3. Research Methodology 6
4. Fruit Juices Market and Consumer Behavior
1.1 The Market Scenario For Fruit Juices 8
1.2 Consumption Habits
1.3 The Latent Demand And Potential Industrial
Earnings For Fruit Juices In India
1.4 The Growing Fruit Juice Market
1.5 Fruit Juice Segment Poised For 30% Growth
1.6 Fruit Juices Go Local
1.7 Factors Affecting Demand
1.8 Consumers Purchasing Behavior
1.9 Large Target Consumer Base And Rising
Income Levels
2.1 Fruit Juices, Now A Social Drink – Considering
Taste, Health, Purity Parameters
2.2 The Outer Fabric Attracts Consumers
5. Research Analysis
3.1 Consumers Awareness For Fruit Juices 34
3.2 Consumers Demand For Fruit Juices
3.3 Consumers Demographic Profile For Fruit Juices
3.4 Consideration Of Different Parameters
3.5 Consumer’s Preference For Packaging
3.6 Consumers Behavior According To Profession
3.7 Competitors Market Share
6. Conclusion 40

7. Recommendations & Suggestions 41

8. Appendix 42
EXECUTIVE SUMMARY

This whole study explains about the consumer buying behavior fruit juices
where five brands are taken into consideration-which are-Real, Tropicana, Leh Berry,
Jumpin and N-joi.

Consumer buying behavior is a generic term explains about the consumer choice
or preferences that they have for a particular product. The buying behavior captures the
idea of consumers and link it with the business activities from which the relevant data
regarding the consumer preferences can be obtained. The consumer behavior pattern
shows the identity, value, acceptance and marketing share. Those relevant data which
really increase the level of product that means the result obtained from the data can be
analyzed for a better result for more innovations. The buying buying pattern and the
response of consumers will give the subsequent data for more modification in case of
growth of product in the market. Many factors are taken into consideration for knowing
the consumer behavior like avaibility, price, flavours, availability, packaging etc. The
attitude of consumer also changes when he has many options to purchase at the same time
and same place. the purchase decision of consumer shows that attracts prodders to know
about the decisions that the consumer make during buying. The players who quickly
adapted to the changes were the ones who not only survived but flourished and the ones
who were caught napping lost their major share of the market. The consumer is ready to
accept product modifications which fly against long held beliefs as long as the
modifications are enhancing value to them. Many a time it is “positioning” of the brand
which was appropriate at one time, because the restricting factor for its growth. In dealing
with traditional products, keep the core the same and modify only the physical form.

This study is based on the consumer behavior pattern by taking into account the
consumer consumer who generally consumes fruit juices and that become a daily need for
them. The main focus is on the preferences and the market share of each brand that they
obtain. The focus is also made on the competitors characteristics and the type of fruit
juice (Tropicana, Real, Leh Berry, Jumpin, N-Joi) they lunch in the market to capture
their target consumers. Each brand has different level of selling according to their market
segments that they have prepared for getting the maximum market share in order to
achieve the competitor target and understanding the drawbacks of the producer’s
perception towards consumers. As per the objective of the study producers are greatly
influenced by the consumers to study the decisions they take during purchase of their
product and their fir sight impression. The consumer buying behavior is the key research
area of this study by taking into consideration various aspects which can be easily
measurable and distinction can be made.

The techniques used are different for secondary analysis as well as per primary
analysis. In secondary analysis the relevant data are obtained from news papers,
magazines, television, and websites. Television is another important source of
information for this project from which recent data are collected for study. The channels
like Star News, Aaj Tak, NDTV has the importance for providing the market share data
of the products considered in the study. For primary data collection the techniques used
are questioner technique and personnel interview. The data collected from the primary
source are analyzed by different graphical methods. The questioners are separated
according to different parameters and different points are assigned for them for perfect
weightage to place in the comparative graphs. The pie chart, bar graph and line graph is
used in this study to compare different parameters.

The objective of the study deals with the demand of a product can be known from
the consumer’s buying pattern and parameters that he considers during buying a fruit
juice like quality, quantity, and availability price packaging and delivery mode. The
general factors while purchasing a product like brand, company name, expiry date, price,
ingredients added, price and quantity generally influence consumers. Identify the
competitor’s strategy force a producer to think different to acquire the reasonable profit
from the market and retention of customers for his product. The numerical value of their
customer retention gives a clear picture regarding demand of their product. The
consumer’s awareness creates a demand towards the particular product. The demand also
depends upon some of the other factors like purchasing power population, promotional
activities of product in the market and seasonality. The primary key of the objective is to
know the consumer perception while buying fruit juices.

It is found from the study that; the profession wise highest number of consumers
is the students who consume fruit juices. The moderate income level of people generally
purchases Tropicana, Jumpin and N-joi where as the higher income level people purchase
real the most. For each category of consumers their quantity of purchase is also obtained,
where the quantity of purchase varies according to their income and physical need. By
considering the pricing factor real has lowed consumers attracted where as Jumpin and N-
Joy has succeeded in the market in their price level that they have fixed. The price of
Tropicana is satisfactory. In this study it is found that packaging has also great
importance towards consumer preference as it gives rise to massive purchase and storage.
The packaging is divided into four types i.e. tetra pack, plastic bottle, can and glass
bottle.Cusomers wants western style packaging with Indian style taste. The natural taste
of fruit juices also influenced a lot and consumers generally tend to towards natural
flavours inspite of artificial added flavours with synthetic colors in it. According to
natural flavours real and Tropicana has succeeded in the market. It is studied that Real
has captured the maximum number of customers of the market.

The strategy for the products can be changed by comparing the different factors
that has obtained from the study. To allocate the target consumers is the important work
for the producers so that they can match their product nature with the preferences of the
consumer who are more willing to buy fruit juices.
INTRODUCTION

The emerging trends in the market have confused producers to sell their product
to gain appropriate profit. India is growing day by day in various sectors and preference
of people also changing according to the change in business trends. Consumer buying
behavior is differenent according to products. A preference of consumer differs due to the
different characteristics of the product. This study shows the consumer preference with
respect to fruit juices. The demand towards the product can be known from the
demographic profile, density of population, retail links and their expectations towards the
product. Fruit juices now a day become a social drink which captured the attention of
each individual of a society. The restrictions for other type of alcoholic drinks gave a
ultimate way of demand for fruit juices.

In Indian market the severe completion among the producers have encouraged
them to go for innovative ways. The competitors have a strong belief towards their brand
and products. Producers have inverted their preferences for marketing their products near
local consumers. The consumers are mostly lean towards the brands which come across
them in the daily life wile going through television, news papers, and magazines, banners
displayed in roads and from web sites. The juice marked has turned into a competitive
market as there are similar competitors in the market serving the same type of juice by
different brand names. The brand names of fruit juices have changed the consumer
preferences because of their easy availability, price, quality, packaging, quality etc. Here
in this case study those types of fruit juices brands have taken into account who has their
most market shares in the market.

The consumer buying behavior shows a way to the competitors in what respect
they can enhance themselves to exist in the market. The blind interpretation of producer
force itself towards severe loss. The perceptions towards the individual product shows
that whether the consumer will buy it or not .The emerging changes observed in the
different levels of consumers. The consumers also change their preferences according to
their capability of buying for that particular product. The distinct characteristics may
sometimes attract the consumers to buy the product which they may not have purchased
before. The retail chain also plays an important role towards it which shows the avaibility
of product at the time of need. The consumers are again distinguished into different age
groups because of their different consumption pattern of food. In some cases it is
observed that fruit juices are only acceptable for sports persons for energy as well as for
relaxation, but the health consciousness factor has affected a lot each individual so that
they can drink fruit juices for good health. The campaigns for fruit juices have solved
much disbelief among the consumers.

This study shows consumer buying behavior by considering the products like
Tropicana, real, leh berry, jumpin and n-joi. Some of the factors are taken into
consideration like price, brand, quality, consumer type and profession of different
consumers who purchase fruit juices. Their technique of buying is the key of our study.
The buying behavior has a important role towards the growth of individual product in the
competitive market. The market is dynamic in nature and needs innovations for existence.
OBJECTIVE

! To analyze the consumer awareness for fruit juices.

This objective gives a clear idea regarding the consumer awareness towards the fruit
juice as well as to wards the different brands prevailing in the market. The
consumer’s awareness creates a demand towards the particular product.

! Analyzing the consumer; their buying behavior & demand.

The consumers buying behavior is a important parameter which consist of consumer
preferences. The demand of a product can be known from the consumer’s buying
pattern and parameters that he considers during buying a fruit juice like quality,
quantity, availability price packaging and delivery mode. The demand also depends
upon some of the other factors like purchasing power population, promotional
activities of product in the market and seasonality.

! Understanding the demographic profile of consumers.

The consumer’s acceptance depends upon the knowledge and maturity lavel that he
has gained during his age for the different food habits prevailing in the surrounding.
The age factor is a important factor to know product demand for a particular age
group. So the interest can be made to motivate those age groups for buying their
product.

! Identification of influencing factor for purchase.

Consumers generally go for some of the general factors while purchasing a product
like brand, company name, expiry date, price, ingredients added, price and quantity.
the perception which a customer interpret from the outer levels of the product
influence him a lot to buy that. The influencing factor of purchasing makes a producer
to understand the customer need.

! Identify the competitor’s strategy.

The competitors pace of capturing consumers though they have similar products in
different label name of different companies. Competitors strategies force a producer
to think think different to acquire the reasonable profit from the market and retention
of customers for his product. Competitors’ strategy varies because of competitiveness
among them to create identity in front of the consumers by showing different
activities and promoting their product name through different techniques. This
objective shows the prevailing strategy of the product and the enhancement for the
product for greater acceptance in the market.

! Analyze the competitor’s market share.

The retention of customers changes from time to time. The retention of customers
shows the market share. The retentions from different products show the orientation
of customers towards the product. The orientation of consumer change due to the
various factors as explained in the above objectives. The numerical value of their
customer retention gives a clear picture regarding demand of their product. From this
producers change their strategy to retain more customers.
RESEARCH METHODOLOGY

The research methodology primarily based on the secondary data collected from
different secondary sources of information. it gives a clear idea regarding the approach of
the study to understand the buying behavior of the consumers for the fruit juices. The
source of information of past consumer behavior for fruit juices and the present consumer
buying behavior compares the differences among the acceptance of product. The recent
trends of market also pay emphasis towards the consumer preference. The understanding
the fruit juice scenario of India is a important study to make a conclusion regarding the
growth of fruit juices in the market, acceptance of particular brand by the people, past
draw backs made by the producers and the recommendations by the consumers.

The review of theoretical concepts which are the research based view, core
competence, sustainable competitive advantage concept and the cost leader ship strategy.
The theoretical concepts of demand in this study show the demand determination process
of a particular product prevailing in the market with high market share.

Source of secondary data are the books, magazines, internet, television, news
papers. There is no particular or specific book where the complete information about
consumer behavior for fruit juices. In this case the information from different books is
collector and assimilated according to the study objective. The magazines like frontline,
business world, Sunday times, Outlook provided a lot of information for it. Television is
another important source of information for this project from which recent data are
collected for study. The channels like Star News, Aaj Tak, NDTV has the importance for
providing the market share data of the products considered in the study. This is the
current source of information in once hand as a hard copy. The news papers (especially
Business newspapers) provided the desired information. Like Economic Times and
Business Standard etc. These newspaper are so important that sometimes they play their
role both as Secondary as well as Primary source of Data (because sometimes the current
information that is available through these newspapers are not even uploaded on Internet
also.)

Developing strategy based on the customer feed back i.e. collection of primary
data by considering a definite sample size of hundred. The primary data based on
questionnaire technique and their results gives a generic idea regarding the study
objectives. The geographical area for the sample size considered is the local area (South
Delhi). The data which are being collected from the consumers during the primary
analysis are separated according to their specific weightage. From the questioner five
comparative questions are considered for comparison. The open ended questions and the
closed ended questions used in the questioner for customer feed back has different
weightage and are separated to make a unique analysis. The main influencing questions
are again analyzed to get clear result from the analysis. The different companies are
considered for realizing the perfect completion among them so that perfect interpretation
can be made upon them. for study the fruit juice brands which are considered are
Real,Tropicana,Leh Berry,Jumpin,N-Joi.other competitor are also considered for the
secondary study but not encountered in the main study.
 For detailed comparison according to different parameters like availability, price,
quality, flavor, customer feed back, packaging the questioner are sorted out and the
rankings are calculated. The ranking is made like first, second and third. First rank has
highest three points, second rank has two points and third rank has one point. According
to the rank the numbers of persons are calculated who have given the ranks according to
the different parameters. The points obtained from the no of persons gives rise to
intermediate point. The summation of all points is a result of total point which is the main
criteria for comparison.

The techniques used are different for secondary analysis as well as per primary
analysia.in secondary analysis the relevant data are obtained from news papers,
magazines, television, and websites. For primary data collection the techniques used are
questioner technique and personnel interview. The data collected from the primary source
are analyzed by different graphical methods. The questioners are separated according to
different parameters and different points are assigned for them for perfect weightage to
place in the comparative graphs. The pie chart, bar graph and line graph is used in this
study to compare different parameters.
Fruit Juices Market and Consumer Behavior

1.1 THE MARKET SENARIO FOR FRUIT JUICES

India produces about 9 million tons of fruits every year, growing at a rate of 12%
per annum. The total market for fruit juices is 230million litres which includes both
packeted and freshly made fruit juices. The proportion of packed fruit juices is small at
just 3.4 Mn litres –just over 1% of market, But even this huge volume translate to just 20
ml per capital consumption as against 45 litres in Germany, 42.5 litres in Switzerland and
39 litres in USA. The key issue before the markets was to raise the consumption of packet
fruit juices. The consumer perception is not the constant one for the different products
available in the market. The perception of consumer depends upon the advancement
made by the producers which attracts consumers a lot and holds the market share is huge
manner. The market for fruit juices is more concerned about the facts behind fruit juices
so the need for it is not diminishing but it is rapidly increasing day by day. For every fruit
juice there is certain amount of market share but the real holding of market share depends
upon the identity of the product by taking into account price, brand, quality, quantity,
packaging, availability, flavor etc.
This Key Note Market Report on fruit juices and health drinks covers the market
for fruit juice, health drinks and fruit drinks. In general, carbonates are excluded from this
report, although drinks of this type can also be fruit-based. However, there is some
overlap with the carbonates sector as health drinks, which might be carbonated and
available in ready-to-drink formats of cordials, are included.
For Indians drinking juice is not a new concept. Street corner vendors have been
popular for years. Fruit juices in the unorganized segment are considered cheaper and
fresher by the consumers, even though they are relatively unhygienic. The organized
natural juice market is currently in a nascent stage-though it is growing at a healthy 35-40
percent rate per annum. This market has had high entry barriers. Few customers are
convinced about packaged juices being preservative free, and therefore, as healthy as
freshly squeezed juice. The drinks market is relatively more mature and growing at 20-25
percent.In 2003, the total UK fruit juices and health drinks market was worth an
estimated £2.19bn at retail selling prices (rsp), a rise of 6.6% on 2002. Fruit juice was the
largest sector in 2003, accounting for 40.2% of the total market. Despite the relatively
mature nature of the fruit juice sector, the market grew strongly in terms of both value
and volume between 1999 and 2003. In addition, fruit juices, fruit drinks and health
drinks recorded a high household penetration level. A number of factors contributed to
this growth, including the increasing interest in health and diet, which is undoubtedly one
of the main drivers. In general, fruit juices and health drinks are regarded as healthy
choices, certainly in comparison to alternative soft drinks, such as carbonates.

In addition, the strength of the economy and rising household disposable income
levels have contributed to the growth of premium-priced products, such as freshly-
squeezed juice. Manufacturers have launched innovative products, which are popular
with consumers; for example, Sunny Delight proved to be one of the marketing
phenomena of the past decade. Although sales of Sunny Delight eventually declined
sharply as a result of concerns relating to the high sugar and low juice content of the
drink, many consumers switched to more natural juice drinks rather than leaving the
market altogether. In the health drinks sector, Red Bull has enjoyed astonishing success
and, since its launch in 1995, has contributed to growing sales in this sector. Indeed, Red
Bull is now the most significant brand in the health drinks sector in terms of value, ahead
of Lucozade.

Over the next 5 years, Key Note forecasts that the fruit juices and health drinks
market will remain healthy, with sales growing by an average annual rate of just over 6%.
Increasing concerns relating to health and diet will play a major role in the market, as
consumers move away from products that are perceived as being unhealthy, such as
carbonated soft drinks, towards more natural alternatives, such as fruit juices. In addition,
growing awareness of the importance of the Government’s ‘five-a-day’ campaign to
increase fruit and vegetable consumption will encourage new entrants into the market. In
particular, younger consumers might regard fruit juice as a convenient way of boosting
their consumption of fruit and vegetables.

The fruit juice sector will be boosted by growing demand for premium-priced
products, such as smoothies. In addition, heavy marketing expenditure and the
introduction of new products that are fortified with vitamins and other additives should
help to drive sales. In some European countries, drinks with added vitamins A, C and E
have proved very successful. Although this sector is still in its infancy in the UK, it could
show rapid growth over the next 5 years.

1.2 CONSUMPTION HABITS

81% of fruit juice consumption in India was unplanned and 38% was pure
impulse. Planned purchase of fruit juices was prevented only in metros.60% of fruit
juices consumption happened outside the home. Fruit juice consumption was a group
activity-just 2% of the population had the fruit juice alone. Indians prefer “fresh juices”-
made in front of their eyes. The origin of this preference lies in the belief that is packed
looses freshness. In the past 15 years, more than 10 brands of tetra pack and bottled fruit
juices have been lunched in India. This brand also happens to be the first in tetra packed
fruit drinks and belonging to the largest soft drink manufacturer in India.

In a country used to having fresh food all the time, the consumer wanted to see the
product. In food products at times seeing is creating the impulse!! tetrapack manufactures
have defined the basic need of Indian consumers by not allowing the consumers to see the
product.

In a country like India which has limited budgets for packaging given the low
disposable income levels-and thereby the packed foods don’t carry very attractive and
inviting pack graphics, the lack of transparency adds to discomfort levels of the
consumers.
 Research showed that more than 60% preferred to see the fruit juice they were
buying. India is becoming a country which wants western style packing with Indian style
taste and thins was posing a great challenge with limited cold storage and cold chain
capabilities.

Vivita-a new entrant has tried to overcome the “freshness of the juice” issue by
packing fruit juices in aseptic PET bottle .with a no preservatives label. The consumer is
reassured by being able to see the product before buying.

INDIA KEY SENSUS STATICS OF LAST YEAR

Population 1100 Mn.

Rural population 805 Mn(73%)
Urban population 289 Mn(26%)

Male population 578 Mn(52%)

Female population 506 Mn(46%)

Density 290/km2*
Persons per house hold 5.52*
Districts 466
Urban agglomeration and towns 3768
Villages (inhabited) 627000

* excluding Assam and Jammu&kashmir

TABLE-1

1.3 THE LATENT DEMAND AND POTENTIAL INDUSTRIAL

EARNINGS FOR FRUIT JUICES IN INDIA

The concept of latent demand is rather subtle. The term latent typically refers to
something that is dormant, not observable, or not yet realized. Demand is the notion of an
economic quantity that a target population or market requires under different assumptions
of price, quality, and distribution, among other factors. Latent demand, therefore, is
commonly defined by economists as the industry earnings of a market when that market
becomes accessible and attractive to serve by competing firms. It is a measure, therefore,
of potential industry earnings (P.I.E.) or total revenues (not profit) if India is served in an
efficient manner. It is typically expressed as the total revenues potentially extracted by
firms. The “market” is defined at a given level in the value chain. There can be latent
demand at the retail level, at the wholesale level, the manufacturing level, and the raw
materials level (the P.I.E. of higher levels of the value chain being always smaller than
the P.I.E. of levels at lower levels of the same value chain, assuming all levels maintain
minimum profitability).
 The latent demand for fruit juices in India is not actual or historic sales. Nor is
latent demand future sales. In fact, latent demand can be either lower or higher than
actual sales if a market is inefficient (i.e., not representative of relatively competitive
levels). Inefficiencies arise from a number of factors, including the lack of international
openness, cultural barriers to consumption, regulations, and cartel-like behavior on the
part of firms. In general, however, latent demand is typically larger than actual sales in a
market.

Production of selected Fruits juices in India

Average (1992/1994) 2002 2003 2004

('000 tonnes)
Bananas juice 9718 16820 16820 16820
Mangoes juice 10108 10640 10780 10800
Oranges juice 1743 3120 3070 3070
Apples juice 1205 1160 1470 1470
Lemons and Limes juce 863 1440 1420 1420
Pineapples juice 956 1180 1310 1300
Grapes juice 684 1210 1150 1200
TABLE-2
For reasons discussed later, this report does not consider the notion of “unit
quantities”, only total latent revenues (i.e., a calculation of price times quantity is never
made, though one is implied). The units used in this report are U.S. dollars not adjusted
for inflation (i.e., the figures incorporate inflationary trends). If inflation rates vary in a
substantial way compared to recent experience, actually sales can also exceed latent
demand (not adjusted for inflation). On the other hand, latent demand can be typically
higher than actual sales as there are often distribution inefficiencies that reduce actual
sales below the level of latent demand.

As mentioned in the introduction, this study is strategic in nature, taking an

aggregate and long run view, irrespective of the players or products involved. In fact, all
the current products or services on the market can cease to exist in their present form (i.e.,
at a brand-, R&D specification, or corporate-image level) and all the players can be
replaced by other firms (i.e., via exits, entries, mergers, bankruptcies, etc.), and there will
still be latent demand for fruit juices at the aggregate level. Product and service offerings,
and the actual identity of the players involved, while important for certain issues, are
relatively unimportant for estimates of latent demand.

In order to estimate the latent demand for fruit juices across the states or union
territories and cites of India, we used a multistage approach. Before applying the
approach, one needs a basic theory from which such estimates are created. In this case,
we heavily rely on the use of certain basic economic assumptions. In particular, there is
an assumption governing the shape and type of aggregate latent demand functions. Latent
demand functions relate the income of a state or union territory, city, household, or
individual to realized consumption. Latent demand (often realized as consumption when
an industry is efficient), at any level of the value chain, takes place if an equilibrium is
realized. For firms to serve a market, they must perceive a latent demand and be able to
serve that demand at a minimal return. The single most important variable determining
consumption, assuming latent demand exists, is income (or other financial resources at
higher levels of the value chain). Other factors that can pivot or shape demand curves
include external or exogenous shocks (i.e., business cycles), and or changes in utility for
the product in question.

Ignoring, for the moment, exogenous shocks and variations in utility across
geographies, the aggregate relation between income and consumption has been a central
theme in economics. The figure below concisely summarizes one aspect of problem. In
the 1930s, John Meynard Keynes conjectured that as incomes rise, the average propensity
to consume would fall. The average propensity to consume is the level of consumption
divided by the level of income, or the slope of the line from the origin to the consumption
function. He estimated this relationship empirically and found it to be true in the short-
run (mostly based on cross-sectional data). The higher the income, the lower the average
propensity to consume. This type of consumption function is labeled "A" in the figure
below (note the rather flat slope of the curve). In the 1940s, another macroeconomist,
Simon Kuznets, estimated long-run consumption functions which indicated that the
marginal propensity to consume was rather constant (using time series data). This type of
consumption function is shown as "B" in the figure below (note the higher slope and
zero-zero intercept). The average propensity to consume is constant.

Is it declining or is it constant? A number of other economists, notably Franco

Modigliani and Milton Friedman, in the 1950s (and Irving Fisher earlier), explained why
the two functions were different using various assumptions on intertemporal budget
constraints, savings, and wealth. The shorter the time horizon, the more consumption can
depend on wealth (earned in previous years) and business cycles. In the long-run,
however, the propensity to consume is more constant. Similarly, in the long run,
households with no income eventually have no consumption (wealth is depleted). While
the debate surrounding beliefs about how income and consumption are related is
interesting, in this study a very particular school of thought is adopted. In particular, we
are considering the latent demand for frozen fruits and concentrated fruit juices, adds,
drinks, and non-alcoholic cocktails across the states or union territories and cities of
India. The smallest cities have few inhabitants. we assume that all of these cities fall
along a "long-run" aggregate consumption function. This long-run function applies
despite some of these states or union territories having wealth; current income dominates
the latent demand for frozen fruits and concentrated fruit juices, adds, drinks, and non-
alcoholic cocktails. So, latent demand in the long-run has a zero intercept. However, we
allow different propensities to consume (including being on consumption functions with
differing slopes, which can account for differences in industrial organization, and end-
user preferences).
 Given this overriding philosophy, we will now describe the methodology used to
create the latent demand estimates for frozen fruits and concentrated fruit juices in India.
Since this methodology has been applied to a large number of categories, the rather
academic discussion below is general and can be applied to a wide variety of categories
and geographic locations, not just frozen fruits and concentrated fruit juices in India.

Any study of latent demand requires that some standard be established to define
“efficiently served”. Having implemented various alternatives and matched these with
market outcomes, we have found that the optimal approach is to assume that certain key
indicators are more likely to reflect efficiency than others. These indicators are given
greater weight than others in the estimation of latent demand compared to others for
which no known data are available. Of the many alternatives, we have found the
assumption that the highest aggregate income and highest income-per-capita markets
reflect the best standards for “efficiency”. High aggregate income alone is not sufficient
(i.e. some cities have high aggregate income, but low income per capita and can not
assumed to be efficient). Aggregate income can be operationalzed in a number of ways,
including gross domestic product (for industrial categories), or total disposable income
(for household categories; population times average income per capita, or number of
households times average household income).

Latent demand is therefore estimated using data collected for relatively efficient
markets from independent data sources (e.g. Official Chinese Agencies, the World
Resources Institute, the Organization for Economic Cooperation and Development,
various agencies from the United Nations, industry trade associations, the International
Monetary Fund, Euromonitor, Mintel, Thomson Financial Services, the U.S. Industrial
Outlook, and the World Bank). Depending on original data sources used, the definition of
“frozen fruits and concentrated fruit juices” is established. In the case of this report, the
data were reported at the aggregate level, with no further breakdown or definition. In
other words, any potential product or service that might be incorporated within frozen
fruits and concentrated fruit juices falls under this category. Public sources rarely report
data at the disaggregated level in order to protect private information from individual
firms that might dominate a specific product-market. These sources will therefore
aggregate across components of a category and report only the aggregate to the public.
While private data are certainly available, this report only relies on public data at the
aggregate level without reliance on the summation of various category components. In
other words, this report does not aggregate a number of components to arrive at the
“whole”. Rather, it starts with the “whole”, and estimates the whole for all states or union
territories and cities in India (without needing to know the specific parts that went into
the whole in the first place).

Based on the aggregate view of concentrated fruit juices as defined above, data
were then collected for as many geographic locations as possible for that same definition,
at the same level of the value chain. This generates a convenience sample of indicators
from which comparable figures are available. If the series in question do not reflect the
same accounting period, then adjustments are made. In order to eliminate short-term
effects of business cycles, the series are smoothed using an 2 year moving average
weighting scheme (longer weighting schemes do not substantially change the results). If
data are available for a geographic region, but these reflect short-run aberrations due to
exogenous shocks (such as would be the case of beef sales in a state or union territory or
city stricken with foot and mouth disease), these observations were dropped or "filtered"
from the analysis.

In some cases, data are available on a sporadic basis. In other cases, data may be
available for only one year. From a Bayesian perspective, these observations should be
given greatest weight in estimating missing years. Assuming that other factors are held
constant, the missing years are extrapolated using changes and growth in aggregate
national, state or union territory and city-level income. Based on the overriding
philosophy of a long-run consumption function (defined earlier), states or union
territories and cities which have missing data for any given year, are estimated based on
historical dynamics of aggregate income for that geographic entity.

Given the data available from the first three steps, the latent demand is estimated
using a “varying -parameter cross-sectionally pooled time series model”.ÿ Simply stated,
the effect of income on latent demand is assumed to be constant unless there is empirical
evidence to suggest that this effect varies (i.e., . the slope of the income effect is not
necessarily same for all states or union territories or cities). This assumption applies
along the aggregate consumption function, but also over time (i.e., not all states or union
territories or cities in India are perceived to have the same income growth prospects over
time). Another way of looking at this is to say that latent demand for frozen fruits and
concentrated fruit juices, adds, drinks, and non-alcoholic cocktails is more likely to be
similar across states or union territories or cities that have similar characteristics in terms
of economic development.

This approach is useful across geographic regions for which some notion of non-
linearity exists in the aggregate cross-region consumption function. For some categories,
however, the reader must realize that the numbers will reflect a state’s, union territory’s
or city’s contribution to latent demand in India and may never be realized in the form of
local sales.

Nonlinearities are assumed in cases where filtered data exist along the aggregate
consumption function. Because India has more than 5,000 cities, there will always be
those cities, especially toward the bottom of the consumption function, where non-linear
estimation is simply not possible. For these cities, equilibrium latent demand is assumed
to be perfectly parametric and not a function of wealth (i.e., a city’s stock of income), but
a function of current income (a city’s flow of income). In the long run, if a state or union
territory has no current income, the latent demand for fruit juices is assumed to approach
zero. The assumption is that wealth stocks fall rapidly to zero if flow income falls to zero
(i.e., cities which earn low levels of income will not use their savings, in the long run, to
demand concentrated fruit juices). In a graphical sense, for low income cities, latent
demand approaches zero in a parametric linear fashion with a zero-zero intercept. In this
stage of the estimation procedure, a low-income city is assumed to have a latent demand
proportional to its income, based on the cities closest to it on the aggregate consumption
function.

Based on the models described above, latent demand figures are estimated for all
major cities in India. These are then aggregated to get state or union territory totals. This
report considers a city as a part of the regional and national market. The purpose is to
understand the density of demand within a state or union territory and the extent to which
a city might be used as a point of distribution within its state or union territory. From an
economic perspective, however, a city does not represent a population within rigid
geographical boundaries. To an economist or strategic planner, a city represents an area
of dominant influence over markets in adjacent areas. This influence varies from one
industry to another, but also from one period of time to another. We allocate latent
demand across areas of dominant influence based on the relative economic importance of
cities within its state or union territory. Not all cities (e.g. the smaller towns) are
estimated within each state or union territory as demand may be allocated to adjacent
areas of influence. Since some cities have higher economic wealth than others within the
same state or union territory, a city’s population is not generally used to allocate latent
demand. Rather, the level of economic activity of the city vis-à-vis others is used.

1.4 THE GROWING FRUIT JUICE MARKET

This chance encounter with the wonder plant seabuckthorn was the reason Ladakh
Foods was set up as a separate company in 2002 to manufacture and sell seabuckthorn
juice as Lehberry. Ladakh Foods today claims to be one of the fastest growing fruit juice
companies in a fiercely competitive environment where big names such as Dabur and
Pepsi already hold substantial market shares. Even when the fruit juice/nectar market is
projected to grow at a scorching pace of 40 per cent, a Tetra Pak study has found that a
whopping 86 per cent of the fruit juice market is still lying untapped.

Perhaps one of the main reasons why milk major Mother Dairy announced it is
jumping on to the bandwagon of fruit juice. The company has launched packaged fruit
juices under its flagship brand, Safal. Starting from Delhi, the product is scheduled for
launched on a nation-wide scale in the months to come. The company says that having
pioneered the marketing of fresh and frozen vegetable products backed by a modern
produce handling and processing facility, Safal is now ready to script a new success
story. This time in the packaged fruit juices category. "With the market growing at a
healthy rate and with changing lifestyles and rising levels of health consciousness among
consumers today, the demand for healthier products like packaged fruit juice is only
going to increase in the times to come. The fruit juice category is rapidly growing by over
50 per cent at some stores for us; it's seen as healthy compared to soft drinks. They are
more hygienic than roadside fruit juices and are a big hit with yuppies. Also, non-sugar
variants find flavours with fitness freaks. For Safal, with its expertise in producing and
marketing various horticultural products in India as well as overseas, juices are a logical
extension of its portfolio. With the launch of Safal juices. A large chunk of this growth
will come from the Real brand of fruit juices, since Real contributes as much as 85 per
cent to the company's top line. It will continue to be an area of focus.
 Pricing is one of the major worries. Price is a barrier to this category because
when you give fresh juice, packaging becomes critical. So, what the industry is now
trying to do is offer different packaging to suit different price points while simultaneously
working on ways to offer better quality and improved taste. Pricing is also the downfall
of fruit juice importers, which distributes the Australian brand Berri in the South, "It is
difficult to make inroads into the middle class as it finds the prices prohibitive. Sales tax
on imported products is not uniform across the States. In Tamil Nadu, it is 21 per cent,
much lesser in Andhra Pradesh and Karnataka. So a one-litre bottle of Berri costs Rs 110
while a Tropicana is in the Rs 75 range. PET bottles are another reason for the high
prices. However, the retail prices are the same across all the States. Natural fruit juices
are a growing market and all players should have a level playing field.

Taking advantage of the health consciousness pervading the market, Adluri Foods
has introduced cranberry juice (something that the local brands also have done) and is
testing a mixed vegetable juice and a cocktail of apple, carrot and orange in the market.

Pepsi recently launched Tropicana Tropics Mango Nectar, which is made entirely
from mangoes sourced from within India, as against other flavours for which sourcing
has to be done from other countries. The introduction of Tropics Mango Nectar will be
followed by Tropics Litchi and Tropics Guava. India is now among the top ten markets
for Tropicana worldwide. Significantly India is now an approved source for mango pulp
within the Tropicana worldwide system, and can soon emerge as a major sourcing base
for other exotic fruits for Tropicana's international market.Which means that if the fruit
juice producers work on further development of backward linkages, the pricing issue
plaguing this industry can be better tackled. Besides, the industry has already begun to
offer packaging solutions to address different price points like a 125 ml pack of fruit
drink Maaza from Coca-Cola India at just Rs 5 and a 500 ml Tropicana blend for Rs 25.

So where is the industry headed? It is expected that the market will touch Rs 170
crore by next year and we are targeting break-even within the next four years. So, while
it took Dabur Foods seven years to make money on fruit juices, thanks to product
innovation, expanding market and increased consumer preference for healthy foods,
Ladakh Foods may repeat this feat in just four years. But even as the industry players are
upbeat about growth prospects, there is an undercurrent of discomfiture, with talk of the
new government thinking of levying eight per cent excise on food products including
packaged fruit juice. So, while profit projections are unlikely to go completely haywire
just yet, there might have to be some readjustments in the time frame within which these
targets may be achieved.

With people turning more health conscious, the non-carbonated beverage segment
has become one of the fastest growing and most exciting businesses at the moment. For
some time now, manufacturers have experimented with some of the formulation and taste
issues, offering the consumers better tasting, more healthful alternatives. Evolving from
drinks containing a hint of herbs or vitamins, beverages have become an important
delivery vehicle for efficacious amounts of nutritional ingredients. Beverages are unusual
products in that everyone expects to try new varieties, even from established brands.
 While all segments of the beverage market are evolving, the growth seems to be
directed more towards healthy, light and low-calorie drinks, in particular organic and fruit
juice varieties.

The Rs 500 crore non-carbonated beverage market in the country is composed of

fruit drinks, nectar and juices. While the fruit drink segment is estimated at Rs 250-300
crore (branded and packaged), the juice market is valued at Rs 150 crore and the nectar is
a small category of about Rs 35-50 crore. And the popular brands vying for a share in the
sector are Parle's Frooti, Godrej's Jumpin, Coca Cola's Maaza, Pepsi's Tropicana, and
Dabur's Real, Nastle's Milo, Soy milk from ProSoya and branded fruit juices from Surya
Foods among others.

The Rs 1,100 crore health food drinks (HFD) market, classified into two
categories of white and brown segments, has remained stagnant for the last several years
despite GSKCH (GlaxoSmithKline Consumer Healthcare) and Cadbury's attempts to
activate the category. While Cadbury's Bournvita has been at the forefront of the HFD
market, GSKCH has also been active. Apart from repositioning its Horlicks brand from
health drink to a fun drink, GSKCH more recently has launched its brown drink Boost in
100gm sachets as well in Tetrapak as a ready-to-drink product. GSKCH's Horlicks and
other brands like Boost, Viva, Maltova, together have a 75 % share of the health food
drinks market. Horlicks alone, as a white beverage, is believed to have an over 50 %
market share.

Nestle's Milo, however, being a brown drink faces direct competition from
Cadbury's Bournvita and GSKCH's Boost. The market has marginally moved from the
white malted beverages to the brown segment. The latest to join the race is GCMMF,
which has relaunched its health food drink branded as Amul Shakti.

What follows is an overview of the latest product offerings from different beverage
companies.
Parle's Frooti No 1 fruit drink

Frooti from Parle Agro is the largest distributed fruit drink with 85 % market
share in India. It reaches more than 10 lakh retail outlets in up to class C towns through
more than 1,500 distributors and wholesalers directly and indirectly. India's first real fruit
drink in Tetrapak is available in three delicious varieties - mango, orange and pineapple -
Frooti Mango from premium Indian mangoes, Frooti Orange from chilled imported
orange concentrate from Brazil and Frooti Pineapple made from ripe juicy pineapple. The
company's another revenue earning brand includes Bisleri water. The Bisleri brand of
mineral water is being made available across the country. It has a market share of 40 %.

Dabur's Real fruit juice in 9 flavours

Dabur's flagship brand Real fruit juice is a market leader in the packaged fruit
juice category. Real was launched in 1996 and the brand has carved out a niche for itself
by claiming to be the only fruit juice in packaged form that is 100 % preservative free.
Real with a market share of 55 % offers to its consumers the largest range of 9 juices that
comprise orange, mango, pineapple, mixed fruit, grape, guava, tomato, litchi and
cranberry.

Real Junior, available in 125 ml packs, targets children below six years. It has two
favourite flavours of mango and apple enriched with calcium. Real Activ, a 100 % fruit
juice with no added sugar, gives the goodness of fruits without adding extra calories.
Today, it is the preferred juice drink for the health and fitness conscious young adults.
Real Activ is available in orange, apple, and orange-carrot variants. Real Activ orange
carrot juice, India's first packaged fruit + vegetable juice, is a combination of juicy
oranges and sweet carrots.

Coolers, a fruit-based beverage, offers traditional 'cooling' recipes in a ready-to-

drink format. It is available in three variants - Aam panna, pomegranate (anar) and
watermelon Real juices are offered in hygienic double seal spill proof caps in Tetrapak
packaging. Once packed, the 6-layer Tetrapak carton helps retain the freshness of the
juice for a longer period of time, thus maintaining the taste and nutrition of the juice. The
fruits that go into the juices are sourced from the best sources across the world, the
company claims.

Dabur Food produces around 50 million litres of juice annually through its state-
of-the-art facility at Birganj, Nepal. In August 2004, the company commissioned a multi
fruit processing facility in Siliguri, in West Bengal, set up by Pasadensa Foods, a wholly
owned subsidiary of Dabur Foods Ltd. Spread over 11 acres and geared to process 150
tonnes of fruit per day, it has the capacity to produce 192 tonnes of pulp/concentrate. The
plant procures fruits worth Rs 6 crore from West Bengal, North-East, Bihar, Uttar
Pradesh, Maharashtra and Andhra Pradesh. It has the highest capacity utilization by
processing pineapple, litchi, guava, mango and grape round the year.

Godrej's Jumpin & Soyfit in several flavours

The Foods Division of Godrej Industries produces and markets fruit drinks, fruit
nectar and Sofit Soymilk. The Jumpin range of fruit drinks come in flavours such as
maqngo, apple, pineapple, litchi and orange. They are packaged in hygienic and aseptic
Tetrapak that assures top quality. Ice-cold Jumpin can be enjoyed straight or mixed in a
punch or a cocktail. They are available in packs of 200 ml.

Godrej Xs fruit juice is packed with extra tang and extra fun.

Xs range of fruit nectar has more fruits making it thick and tasty. Also the
vitamins and carbohydrates present in it provide extra energy for a fit and healthy living.
Available in orange, mango, litchi and pineapple flavours, Xs come in Tetrapaks of 200
ml and 1000 ml.
 Godrej has launched Sofit Soymilk for the health conscious. Sofit Soymilk made
from carefully selected soybeans, is a valuable source of proteins and vitamins. Being
low in saturated fat and cholesterol free, is becoming a popular drink. Available in
mango, apple, malt and plain flavours, Sofit is sold in Tetrapaks of 200 ml and 1000 ml.
The 1000 ml pack is priced at Rs 50. Sofit is made by mixing soymilk with real fruit
pulp, to give all the health benefits of soy to the consumers with the refreshing taste of
fruits, claims the company. Soymilk is free of lactose which is present in cow/buffalo
milk. The company is in the process of launching more health products.

Nestle's Milo with 'badam shakti'

Nestle is relaunching its chocolate health food drink Milo by re-energising it with
'badam shakti'. According to company sources, Milo is all set to get a new lease of life
with a new packaging, formulation and a distinct positioning. Currently, Milo is available
in a SKU of 500gm priced at Rs 96. In the past, Nestle had exited from categories like
packaged water business and discontinued a few of its brands, including Nescafe Choc
Café and Milkmaid dessert mixes, due to their poor performance.

By giving Milo a new distinct local positioning and introducing the brand in
convenient sachets at lower price point, it is clearly moving away from being a very
urban-focused player and targeting newer markets and driving rural demand.

PEPSI'S TROPICANA

Pepsi's Tropicana brand fruit juice has registered double digit growth and has
outpaced the growth of the packaged fruit juices market in India. India is a very important
market for Tropicana and is among the top 10 biggest markets for the brand. The
company sources orange juice concentrates from Brazil. Tropicana is available in orange,
apple, grape and cranberry flavours and a cocktail in Ruby-red. They come in Tetrapaks
of one litre and PET bottles of 500 ml and one litre. Pepsi also markets an energy drink
for the sports personnel, called Gatorade, and a sugar-free Diet Pepsi. Pepsi, in
association with Hindustan Lever Ltd (HLL) is planning to launch Lipton iced tea in a
couple of months. The move is to take on its arch rival Coca Cola which was successful
in its business in tea and coffee, both hot and cold in association with McDonald's.

Coca Cola's Maaza very popular

Maaza was launched in 1976, a drink that offered the same real taste of fruit
juices and was available throughout the year. In 1993, Mazza was acquired by Coca Cola
India. Mazza currently, dominates the fruit drinks industry. Over the years, Mazza has
become synonymous with mango. The drink became a hit with successful advertisement
campaigns like "Taaza mango, maaza mango,' and 'Botal mein aam, maaza hain
naam.'Consumers regard maaza as wholesome, natural, fun drink which delivers the real
experience of fruit. It5 is available in SKUs of 200 ml RGB, 250 ml RGB, 125 ml
Tetrapak and 200 ml Tetrapak.

Besides, Coca Cola is also in the business of tea and coffee under the brand name
Georgia Gold. The brand is available at all McDonald's outlets across the country. After
the hot beverage did well, the com-pany entered the ice tea and coffee market with
Georgia brand last year, again in association with McDonald's. Coke's non-CSD portfolio
also comprises powder soft drink concentrate Sunfill, and the bottled water brand Kinley.
The company is expected to launch a new low calorie cola and introduce more varieties
of flavoured bottled water over the next few months.

A category pioneer in packaged and preservative free fruit juices, Dabur Foods
has achieved another first by creating a new category in the packaged fruit juice market -
with the first fruit-vegetable juice combination, Real Activ Orange Carrot. This nutritious
powerhouse is a combination of juicy oranges, sweet carrots and is available in 1litre
packs for Rs. 70/- only. "A three pronged strategy has driven the launch of Real Activ
Orange Carrot: offering a value added juice to consumers in the most popular flavour i.e.
Orange juice; creating a new category that currently does not exist in India; and
expanding the entire choice set of juices available. We believe this launch will expand the
market for natural, 100% preservative free packaged juices in India and is a part of our
overall strategy to offer consumers a healthier juice and the widest choice possible," said
Mr. Amit Burman, CEO, Dabur Foods Ltd. This strategy is an outcome of an innovative
product development plan that combines product ideation and extensive consumer
feedback. On Real Activ Orange Carrot, the company's research showed that consumers
were looking at an orange+ option i.e. a way of making the all-time favourite orange juice
more nutritious and healthy. Several options were considered and the orange-carrot
combination was chosen because it made the healthiest combination; the two flavours
blended well with each other creating a more flavourful juice; and there was a high
degree of comfort with the combination. This is a familiar combination as traditionally,
people drink carrot juice in India and its health benefits are known.

Real Activ Orange brings together the taste and nutrition of orange, with beta-
carotene rich carrot juice that is recognized by health experts as the 'wonder juice'.
Packed with high amount of antioxidants i.e. Vitamin A, C and E, Real Activ Orange
Carrot juice provides instant rejuvenation to body and also strengthens immunity levels.
This segment largely consumes Orange juice is looking for ways to 'get more'. This led
us to develop a combination that delivers great orange taste with the beta-carotene &
vitamin C, rich carrot juice - creating a completely natural 'wonder juice'.Real Activ
Orange Carrot will be marketed using both above the line advertising as well as a
complete below the line programme that will ensure extensive consumer sampling in
corporate campuses across the country," adds Sanjay Sharma, Head of Marketing, Dabur
Foods Ltd.

Globally the fruit+veg combo juice market is a fast growing niche that appeals to
health conscious adults who want their juice to 'deliver more'. Interestingly, this is not an
entirely alien concept to the Indian consumer who has been accustomed to drinking
mixed fruit and getable juices from the neighbourhood juice wallah, but did not have this
choice when it came to hygienically packaged juice.

Real Activ is targeted at health conscious young executives for whom

fitness is a way of life and is available in orange and apple flavors. In a complete break
away from the conventional advertising for fruit juices, the new Real Activ TVC uses
lifestyle imagery to position the brand as a part of the active lifestyle of young
professionals by providing a refreshing alternative that keeps them going.

The commercial shows a young urban professional, who after a hard day's work
drops his professional gear and transforms into a cool and relaxed person who recharges
himself -with Real Activ which acts as a catalyst for this transformation. This year Dabur
Foods has also realigned the flagship brand, Real so that the look and feel of the brand
became more effective in communicating its core benefit i.e. Real tastes like eating a
fruit.

The first step was the relaunch of Real in a new, vibrant and international look
designed to maximise drool appeal. The second step was to change the brand
communication for which three different TVC's are being used to talk to distinct
audiences i.e. school kids, mothers and young professionals in varied real life situations.
The Real Activ TVC was the third in the series of advertisements. The third step is an
integrated communications plan using both above the line and below the line methods to
be able to involve and engage consumers more directly.

Real Fruit Juice is India's leading packaged, 100% preservative free fruit juice
brand offering consumers the great taste and wholesome nutrition of freshly squeezed
juice in a hygienic and attractive pack. It offers the largest range in India with eight
juices: orange, mango, pineapple, grape, guava, mixed fruit, tomato and litchi.Dabur
Foods is the only juice company in India and among the top 5 companies in the world to
use the latest spin cap tetra pack, cold fill technology and spill-proof double seal cap for
packaging Real. Real Fruit Juice is India's first and only packaged Fruit Juice brand to get
SGS (Societe Generale de Surveillance) certifications for high safety standards used in
packaging that conform to the stringent HACCP and GMP standards. 'Real' was
recognized as the 'Fastest growing brand' for 2001-02 in the first ever beverage industry
seminar in India. Real Fruit Juice is a market leader in packaged fruit juice category
commanding more than 55% market share.

1.5 FRUIT JUICE SEGMENT POISED FOR 30% GROWTH

The branded fruit juice market in India is estimated to be worth Rs 500 crore
organised fruit beverage market (nectars, drinks and juices combined) and the segment is
growing at about 30 per cent per annum. Big players like Dabur, Pepsi, Godrej and Parle
Agro are already in the market and in view of the swift growth in the market, newcomers
like Surya Foods and Agro, Mother Dairy, Ladakh Foods, Pioma Industries have come
into the market with new products in the recent years.
 Primary food processing is a major industry with a highly fragmented structure
that includes hundreds of thousands of rice-mills and hullers, flour mills, pulse mills and
oil-seed mills, several thousands of bakeries, traditional food units and fruits, vegetable
and spice processing units in the unorganised sector. In comparison, the organised sector
is relatively small, with around 516 flour mills, 568 fish processing units, 5,293 fruit and
vegetable processing units, 171 meat processing units and numerous dairy processing
units at state and district levels.
The share of the organised and unorganised sectors varies across different
segments of the industry.

Share of categories in Indian fruits juices &

Vegetables processing sector, 2006

FIGURE-1

In India is almost equally divided between the organised and unorganised sectors,
with the organised sector holding 48 per cent of the share. While products like juices and
pulp concentrate are largely manufactured by the organised sector, the unorganised
sector’in foothold is in the traditional areas of processed items like pickles, sauces and
squashes. By size, pickles form the strongest category.

Amit Burman, Chief Executive Officer, Dabur Foods, told Food & Beverage
News in an interview that the market share of Dabur's Real Fruit juice is now 60 per cent.
No doubt Dabur's Real Fruit juice is the market leader followed by Pepsi's Tropicana.
The two major fruit juice makers in India, Tropicana and Dabur are going all out to tease
Indian taste buds with ethnic flavours. However, Godrej's Jumpin is slowly achieving its
space in the fruit juice market. Godrej Industries Foods Division has introduced fruit
juices under the Xs brand, which earlier only consisted of nectars. Parle Agro's Frooti and
N-Joi too are doing well in the market. Delhi NCR-based Surya Foods and Agro Ltd,
manufacturers of Priyagold biscuits, has forayed into the juices segment. Mother Dairy
has recently launched the Safal brand of juices. Safal is currently available in orange,
mixed fruit, grape and an orange-apple combination. Ladakh Foods, makers of the Leh
Berry seabuckthorn berry drink, has now launched an apple-peach combination juice and
a mixed fruit variant. Ahmedabad-based Pioma Industries, makers of the Rasna brand of
soft drink concentrates, test marketed a diluted mango juice in Andhra Pradesh recently.
Real juices from Dabur Foods
Dabur Foods introduced for the first time in the Indian market Cranberry juice -
Real Cranberry Nectar. An innovative product from Dabur Foods' portfolio, Real
Cranberry Nectar is exotic fruit juice nectar, available in 1-litre packs. According to
sources, Real Cranberry offers the exotic flavour and nutritive value of cranberries, rich
in vitamins, minerals and antioxidants, which make it a healthy beverage. Dabur Foods'
flagship brand, Real offers the largest range of fruit juices, which are an assortment of
traditional Indian and international flavours - orange, mango, tomato, pineapple, mixed
fruit, grape, guava, litchi and cranberry. Real Fruit Juice is a packaged, 100 per cent
preservative-free fruit juice brand offering consumers the great taste and wholesome
nutrition of freshly squeezed juice in a hygienic and attractive pack. Dabur Foods is the
only juice company in India and among the top 5 companies in the world to use the latest
spin cap tetra pack, cold fill technology and spill-proof double seal cap for packaging.
Real Fruit Juice is India's first and only packaged Fruit Juice brand to get SGS (Societe
Generale de Surveillance) certifications for high safety standards used in packaging that
conform to the stringent HACCP and GMP standards. The brand has also won the award
for 'Highest sales growth achieved by a brand' in the non-dairy category. Dabur Foods
also launched preservative-free fruit juice a sub-brand Real Junior in 2004, targeted at
kids below six years - creating an age-specific market segmentation. This is claimed to be
a first of its kind segmentation in the Indian fruit juice market in keeping with Dabur's
marketing strategy of segmenting the market with customised fruit juices. Real Junior has
two flavours - mango and apple, enriched with calcium, in 125 ml packs for children
below six years. The vibrant packs with animated fruit characters are intended to appeal
to children by highlighting the taste and nutrition of Real Junior. Dabur Foods has a
portfolio of nine variants under the Real brand, which offers the largest range of fruit
juices - an assortment of traditional Indian and international flavours - orange, mango,
tomato, pineapple, mixed fruit, grape, guava, litchi and cranberry. To expand the choice-
set of juices for consumers, Dabur Foods has constantly been introducing innovative
variants like Real Activ Orange Carrot - India's first fruit-vegetable juice. The company
has also launched multiple-size options to kids like Real Fruit Juice School packs that suit
varied consumption needs and occasions. Dabur Foods had launched "India's first"
packaged, fruit-plus-vegetable juice, Real Activ Orange Carrot, a blend of juicy oranges
and sweet carrots. A nutritious powerhouse to boost the health. This powerful combo
brings together the taste and nutrition of orange, with the beta-carotene rich carrot juice
that is recognised by health experts as the 'wonder juice'. Packed with high amount of
antioxidants Vitamins A, C and E, Real Activ Orange Carrot juice provides instant
rejuvenation to body and also strengthens the immunity levels. Real Activ Orange Carrot
juice is a delicious and convenient way to include more vitamins and minerals in your
diet. Carrot juice, also known as the 'miracle juice,' is beneficial for eyes, skin and the
digestive system. Orange juice provides energy, relieves nausea and also helps in
improving resistance of the body. Real Activ is targeted at health conscious young
executives for whom fitness is a way of life and is available in orange and apple flavours.

Pepsi's Tropicana
 Tropicana has launched a sub-brand Tropicana Tropics and is introducing new
flavours mango nectar, guava pulp and litchi juice under this brand. It may be recalled
that Pepsi had launched mango and litchi flavours earlier under its fruit drink brand 'Slice'
in returnable glass bottles. Tropicana juices have 80 per cent fruit pulp content. At
present Tropicana has about seven flavours in the market - apple, pineapple, orange,
apple orange, grape and mixed fruit. The company is now working on building the same
capacities for other fruits like guava, pineapple, papaya pulp, grapes and pomegranate.

PepsiCo teamed up with Punjab Agri Export Corporation for a joint citrus
cultivation project in 2003 in Punjab. The company was looking for a similar deal with
pineapple farmers in Kerala. Dabur Foods is going local with a vengeance with its fruit
juices. It is also aiming to expand its market by introducing juices with a lower price tag.
The company has launched a new brand 'Coolers' in four variants - green mango,
pomegranate, jamun, and water melon with one litre of Cooler priced at Rs 50. Coolers
like Tropicana Tropics also contains only 20 per cent of fruit pulp against over 80 per
cent in Real variants.

According to sources, Tropicana Pure Premium orange juice is made from one
thing - Orange. Original with no pulp, Homestyle with some pulp, and Grove stand with
lots of pulp. Also look for the Calcium fortified products: Calcium plus Vitamin D with
no pulp, and Grove stand (Lots of Pulp) with Calcium. Tropicana Pure Premium is the
orange juice brand.

Jumpin, Xs from Godrej

The foods division of Godrej Industries has been one of the pioneers in the fruit
drinks and fruit nectar categories in India. It offers two well-known brands - Jumpin and
Xs. Jumpin - this range of fruit drinks is available in four flavours: mango, pineapple,
apple and orange. It comes in an innovative baseline pack design that is trendy and easy
to hold. Flavour retention is high and freshness of taste is never lost. Jumpin can be
enjoyed straight or in a punch or cocktail. It is available in slim packs of 200 ml in trays
of 27 (straws provided). Also available in 1000 ml packs. Xs - this brand comes in three
flavours: mango, litchi and orange. Xs contains high-quality fruit pulp, which makes it
tastier and more filling than ordinary fruit drinks.

It can be served straight and also makes a great cocktail mix. Available in packs
of 200 ml in trays of 27 (with straws). Also available in 1000 ml packs. The foods
division of Godrej Industries has made a mark in the exports market. Jumpin and Xs
beverages, manufactured at India's largest singly located plant, a state-of-the-art facility
that has ISO 9002 and HACCP certification. This plant uses the latest machinery; it has a
rigorous testing procedure, and is manned by a qualified and experienced team of
microbiologists and food technologists. The world-class Mandideep plant, near Bhopal in
the northern Indian state of Madhya Pradesh, was ISO-9002 certified in May 1995 and is
the first facility in its category to get the 'quality management system certification'.

Frooti, N-joi from Parle Agro

 Parle Agro Ltd is betting on 'N-Joi' - positioned as 'real fruit, real milk' - to further
slice open the virgin fruit-milk beverage market. The Mumbai-based company launched
N-Joi - initially an Alphonso mango with fresh dairy milk variant. The company has 11
Tetra Pak facilities in the country. Initially, the western and southern markets will meet
supplies from the Mumbai plant. Parle Agro's Frooti is reported to be over Rs 250-crore
turnover. Frooti's marketshare is claimed to be 85 per cent in the tetrapak segment and 29
per cent in the mango beverage category (including bottles and tetrapak). Mango fruit
beverage is estimated to account for 91 per cent of the sales of all fruit juice variants
while orange juice accounts for only 3.1 per cent. Further, under the N-joi brand
umbrella, the company launched half-a-dozen milky-fruity variants, including peach-
milk, strawberry-milk, pineapple-milk, banana-milk, and cheekoo-milk. Frooti remains a
dominant mango fruit beverage brand.

Freshgold from Surya Foods & Agro

Surya Foods and Agro Ltd, manufacturers of Priyagold biscuits, has forayed into
the juices segment. It has set up a state-of-the-art manufacturing facility in Noida, Uttar
Pradesh, with an investment of Rs 25 crore. The plant has a capacity of producing 1.5
lakh litres of juice per day. Branded `Freshgold', the one-litre juice in cartons is available
in supermarkets and malls in and around Delhi for Rs 60. B P Agarwal, Chairman, Surya
Foods and Agro Ltd, said that though the juices are currently available only in the
northern markets, the company has a plan to launch it in the south in near future.

Leh Berry from Ladakh Foods

Ladakh Foods is building a portfolio of products from fruit juices to jams and
sauces, based on the little-known seabuckthorn berry, which grows in the Ladakh region.
That may seem like a risky gamble. But Ladakh Foods doesn't think so. It launched Leh
Berry a couple of months ago. Its first fruit juice in Delhi and it's selling it in the more
affluent parts of town. Since January the drink has also been on shopshelves in cities like
Hyderabad, Nagpur and Pune. According to company sources, the juice will be
competing with established players as Tropicana and Real. Leh Berry believes it has the
advantage of a fresh taste. But its competitive edge may well lie in its positioning.
Ladakh Foods is marketing Leh Berry as a nutrition drink (it prefers not to use the word
health, with its bitter, medicinal associations), based on the chronicled nutritional
properties of the seabuckthorn fruit. Ladakh Foods' target of capturing at least 7 per cent
of the market share within a year and 20 per cent by 2006-end is ambitious, company
sourcesadded.

Safal juices from Mother Dairy

Mother Dairy has launched packaged fruit juices under the Safal brand. This is
nearly 20 years after it launched its 'Safal' brand of processed Encouraging small and
medium scale units in export promotion efforts. Enlisting the involvement and support of
the State Governments in India for promotion of India's foreign trade. Providing trade
information services through electronic accessibility at Business Information Centre, the
ITPO sources added.
 A catalyst with a selective integrated approach to exports, Aahar concentrates on
specific buyers in overseas markets, specific exports and specific products. It is this micro
or pinpointed approach to export promotion which marks it out from other export
promotion exhibition in the country. For foreign visitors and exhibitors the ITPO sources
said, "Arrive in India and leave the rest to us to fix appointments with Indian exporters,
organise visits to manufacturing units, arrange display of products for foreign companies,
locate suitable manufacturers to carry out modification and product adaptation, identify
manufacturing units for export-oriented joint ventures; and supply data on capacity,
equipment, quality control, etc.".

1.6 FRUIT JUICES GO LOCAL

The two major fruit juice makers in India Tropicana and Dabur are going all out
to tease Indian taste buds with ethnic flavours. PepsiCo terms these as flavours that are
more relevant to Indians.

For Tropicana India is proving to be a good investment as according to top

officials in the company, "India is among Tropicana's top ten markets which is
continuously moving up having registered a strong double digit growth last year. But they
did not reveal any numbers.

The company wants to ensure that the strong growth continues and also that the
market expands further. To this end Tropicana has launched a sub-brand Tropicana
Tropics and is introducing new flavours mango nectar, guava pulp and litchi juice under
this brand. It may be recalled that Pepsi had launched mango and litchi flavours earlier
under its fruit drink brand 'Slice' in returnable glass bottles.

The new variants are expected to come for around Rs 50/ litre as these come
under the category of 'less than 20 percent fruit pulp' making them less pricey than
Tropicana fruit juices all of which retail at above Rs 70/litre. Tropicana juices have 80
percent fruit pulp content.

At present Tropicana has about seven flavours in the market — apple, pineapple,
orange, apple orange, grape and mixed fruit. Tropicana is also looking at making India
the sourcing hub for certain varieties of fruits mainly mango. Pepsi is already exporting
nearly 20,000 tonne of mango pulp and concentrate predominantly to west Asia and
Europe from India. The company is now working on building the same capacities for
other fruits like guava, pineapple, papaya pulp, grapes and pomegranate. PepsiCo teamed
up with Punjab Agri Export Corporation for a joint citrus cultivation project in 2003 in
Punjab, which is expected to start producing results very soon. The company is now
looking for a similar deal with pineapple farmers in Kerala. According to a PepsiCo India
spokesperson, the company has begun trials of pineapples imported from Thailand and
the Philippines in Kerala. At present the company sources orange juice concentrates from
Brazil but through the ongoing project, it is trying to develop a large grower base, which
can produce high juice yielding oranges to match its requirements. "India produces 47
million tonne of fruits which provides us an exciting export opportunity within the Asia-
Pacific region.

Dabur Foods is also going local with a vengeance with its fruit juices. It is also
aiming to expand its market by introducing juices with a lower price tag. The company
has launched a new brand 'Coolers' in four variants — green mango, pomegranate, jamun,
and water melon with one litre of Cooler priced at Rs 50. Coolers like Tropicana Tropics
also contains only 20 per cent of fruit pulp against over 80 per cent in Real variants.
Dabur is also aiming at expanding its consumer base. Dabur's Real brand of fruit juices,
has proved very successful contributing as much as 85 per cent to the company's Rs86
crore turnover last fiscal. According to the company Coolers has been launched with an
investment of Rs12 crore, into research into consumer needs and development of
processing capabilities and parameters on the other.

1.7 FACTORS AFFECTING DEMAND

A. POPULATION

Population growth in India is currently 2 percent per year, and varies from state
to state. The states with the highest per caput fruit consumption are usually those with
lower population growth rates. According to official statistics, population growth is
expected to decline to 1.5 percent per year by 2011 when the total population of India is
expected to reach 1.2 billion. Significant potential exists to expand fruit consumption in
rural areas, states with currently low per caput consumption rates and growing urban
areas. Higher levels of per caput fruit consumption are increasingly evident in urban
areas, for virtually all income groups, with the higher income levels showing the highest
per caput consumption rates.

B. INCOME AND PRICES

The Indian economy has achieved significant growth over the past twenty years.
Real annual GDP growth rates have averaged 4.7 percent over the period, despite the
Asian economic crisis and slow industrial growth in the past five years. Real per caput
income levels increased 3.4 percent per year from 1981 to 1998, with household
expenditure for fruits and vegetables estimated to have increased 5 percent per year over
the same period. Annual per caput fruit consumption also increased, from 25 kgs in 1981
to 31 kg in 1998.

There is a significant positive relationship between income and fruit consumption.

The consumption of tropical and other fruits is highly related to income levels. Data from
the Indian Agriculture Research Institute indicate that the richest income group consumes
six times more fruit than the lowest income group, in both rural and urban areas, with per
caput consumption in urban areas almost twice that of rural areas4. For rural areas, the
overall weighted average of the income elasticity of fruit demand for the highest income
group was estimated at 0.283 compared to 0.826 for the lowest income levels. Similarly
for urban areas, the income elasticities were 0.293 and 0.782 respectively.Thus, the
higher the income the less responsive is fruit consumption to changes in income levels.
Given this relationship between income and demand, lower income groups are likely to
account for most of the future growth of the market in India, although high income
groups may increasingly substitute tropical fruit for other fresh fruits as fruit consumption
in these groups approaches saturation.

Prices of fruit have increased more than the General Price Index with total fruit
consumption generally highly sensitive to price changes, as discussed above. A
substantial price differential exits between wholesale and retail prices as shown by Table
10, primarily due to the margins captured by intermediate buyers and sellers, perishability
of product, and long distances between wholesale and retail markets. High retail prices
for fresh tropical fruit are one of the primary constraints to increasing consumption,
particularly among middle to low income households.

C. CONSUMPTION HABITS AND PREFERENCES

Consumers in India have become increasingly aware of the positive health aspects
of fruit consumption, particularly in urban areas. A more diversified diet and interest in
healthier eating has led to increased consumption of all fruits. Prices also play an
important role in consumer preferences for individual fruits, with tropical fruit prices
typically lower than for temperate fruit. Temperate fruits tend to be consumed by the
higher income groups, while tropical fruit consumption is more widespread. Large
quantities of fresh unripe mangoes are utilized in household preparation of pickles and
chutneys. Consumption of lychee and sapota is largely concentrated in higher income
households. The market for minor tropical fruits, such as passion fruit, carambola and
avocado is expected to rapidly increase over the near to mid-term, with consumption
concentrated in higher income groups at the present time.

D. PROMOTIONAL ACTIVITIES

Few national or regional promotional activities, either commercial or state-

sponsored, have been developed to encourage domestic consumption of tropical or other
fruits in past years. However, nutritional education programmes by the Government of
India have resulted in rising demand for higher quality fruit, as well as increased
preferences for more varied diets (including more fruit consumption). A number of large
agro-processing industries have initiated promotional programmes for processed fruit and
juice products in recent years, utilizing mass media and in-store promotions to enhance
brand recognition and encourage consumption.

E. SEASONALITY

A survey of three wholesale terminal markets in October 1999 revealed large

variations in prices due to seasonality. Furthermore, despite some efforts to better manage
surpluses due to seasonality, an estimated 25 percent of total fruit production goes to
waste during post-harvest handling, according to the National Horticulture Board of the
Ministry of Agriculture for India. Although the Government of India has taken steps to
improve the overall conditions of the fruit industry, future growth is constrained due to
inadequate refrigeration and cooling facilities, remote market access and export
infrastructure not meeting the demanding requirements for the export of fresh fruit.

1.8 CONSUMERS PURCHASING BEHAVIOUR

The availability of consumer food products in India has grown significantly since the
economic reforms beginning in 1991. Indian consumers can now purchase domestically
produced cheese, wine, potato chips, ketchup, soft drinks, candy bars, breakfast cereals, ice
cream, donuts, biscuits, frozen meats and vegetables, instant noodles, jams and jellies,
packaged grains and pulses, soups and some ready to eat packaged and frozen meals.
Availability of fresh produce is seasonal. Retail food sales in India were approximately $132
billion in fiscal year 1998 and are growing at 13 percent per year, according to the Ministry
of Finance. The retail market for fruits and vegetables has grown at over 20 percent per year
in the past few years. Retail sales of subsistence foods such as cereals, breads, pulses and
edible oils have started declining. As incomes have risen, there has been a shift in
consumption, from subsistence to higher value foods.

Many Indians are vegetarian by tradition; moreover, many can only afford a
vegetarian diet. Meat may be regularly consumed by less than 30 percent of the Indian
population, due to its higher cost and a predominance of vegetarianism and Hinduism.
However, only 20 percent of the population is strictly vegetarian. Non-vegetarians
typically consume meat only once or twice per week. Higher income consumers rely
almost entirely on domestic help for their shopping. The domestic help buys staples,
vegetables, and fresh foods from local small grocers and vendors, and other products
from a variety of general merchants. The middle class has diverse purchasing habits.
Many families on the upper end use part-time domestic help to do their shopping, often
necessitated by a growing pattern of households with two working parents. Many families
at the lower end of the middle class continue to do their own shopping. The poorer
segments of the Indian population tend to buy basic staples with the first part of their
paychecks, which typically are distributed on the first few days of each month. During
the month, the poorer customers will buy whatever fresh foods and consumer goods they
can afford, often filling in at the end of the month with some additional staples purchased
on credit. In all classes, women do most of the shopping and make most of the food
purchase decisions. Most consumers prefer local shops to larger supermarkets because of
proximity, personal attention, and lower prices. Nearly 95 percent of consumers purchase
fresh fruits and vegetables from a local market or street vendor. Additionally, traditional
markets are considered the freshest source for foods.

Indians have a strong preference for freshly prepared foods, and most have a
definite prejudice against packaged, branded, or processed foods, believing them to be
lower in flavor and nutrients. Many households will not even reheat foods, and make only
enough for one meal. This is mainly to avoid waste, but also to ensure freshness since
refrigeration is available only in wealthier households. However, with urbanization, rising
incomes, more working women, the arrival of large food multinationals, and a
proliferation of fast food outlets, acceptance of packaged food products is increasing.
Packaging of imported goods is typically better than that of domestic goods.

Also, India has many regional differences in food tastes and preferences. For
example, residents of Mumbai (formerly known as Bombay) are more willing to try new
foods than those in other Indian cities. As Mumbai is home to a more progressive and
skilled labor force than other parts of India, many multinational corporations test market
new products in that city.
Consumer spending has grown at an average of more than 11.5% a year for more than
decade as in most developing nations, a large chunk of Indians consumer expenditure is
on basic necessities, especially food-related items. Hence it is not surprising that food
,beverages and tobacco account for as much as 50% of consumption expenditure in
2006.the remaining 50% related to non-food items is expected to rise, due to the growth
of percapita income.

There are three significant trends in Indian retailing. First, the number of small outlets
has grown over the past few years, bucking the worldwide trend toward retail consolidation.
Second, Indian retailers have started promoting brands and using basic merchandising
techniques. Some of these stores are even charging slotting fees for shelf space. This is in
stark contrast to the small shopkeepers who paid personal attention to regular customers and
strongly influenced their buying decisions. The shopkeeper’s recommendation was important
because he often did not display all the items he stocked. Indian consumers who choose
branded foods are less likely to seek the shopkeeper’s recommendation. Lastly, retailers have
also started offering home delivery services in urban areas.

1.9 LARGE TARGET CONSUMER BASE AND RISING INCOME

LEVELS:

India population is nearly 23 per cent of the global population and is one of the
most attractive consumer markets in the world today. Income levels across population
segments have been growing in India. According to NCAER data, the consuming class,
with an annual income of US$ 980(INR 45000) or above, is growing and is expected to
constitute over 80 per cent of the population by 2009-10. with the growing disposal
income and the highest ever consumer confidence levels ,Indian consumers propensity to
spend is soaring.private final consumption expenditure (PFCE) ROSE 8.3% DURING
2003-2004,the highest growth rate in 23% years.indians purchasing power id further
fuelled by easy availability finanace in the form of loans.The increase in income levels of
the Indian population and the emergence of the consuming class that has higher
propensity to spend, offers great growth opportunities for companies across various
sectors.
 Growing consuming class
(mn households - annual income)

` FIGURE-2

Urban consumers in India have become more exposed to western lifestyles,

through overseas travel and presence of foreign media in India. For example, more than 5
million Indians travelled abroad last year and this number is expected to increase by 15
per cent to 20 per cent per annum. Increase in the population of working women and
increasing prevalence of nuclear doubleincome families, especially in urban areas, are
other trends shaping lifestyles.The food processing sector has been impacted by these
trends as there has been an increase in the demand for processed, ready-to-cook and
ready-to-eat food. It has been assessed by Euromonitor International, a market research
company, that the amount of money Indians spend on meals outside the home has more
than doubled in the past decade to about US$ 5 billion a year, and is expected to further
double in the next 5 years. These trends imply significant growth potential for the sector
in future and add to its investment attractiveness.

2.1 FRUIT JUICES NOW A SOCIAL DRINK -- CONSIDERING

TASTE, HEALTH, PURITY PARAMETERS

If the findings of a `usage and attitude' study conducted by market research

agency Indica Research across 1,200 adults in SEC-A and SEC-B households in Delhi
and Mumbai are anything to go by, then it's not just champagne and colas that qualify as
social beverages. Packaged fruit juices are as much recognised as social drinks now, with
dominant consumption being observed in the company of family and friends.

Fruit juices are perceived as anytime beverages, with consumption being spread
more or less evenly between the mid-mornings, afternoons and evenings. And
GeneratioNow is as much inclined to sipping fruit juices as colas, with teenagers driving
the maximum trials.

Among packaged fruit beverages, the `awareness to trial' ratio of PepsiCo's

Tropicana juice brand has been rated the highest. Up to 17 per cent of the respondents
were aware of Tropicana, while the brand's trial stood at 11 per cent. Also, eight per cent
of the respondents stocked the brand at their homes. Other parameters where Tropicana
edged out competitors included taste, health, purity and nutrition, according to the study.
Tropicana was also perceived as `reasonably priced'. Another interesting finding is that
the average Indian may have a legendary weakness for mango, but when it comes to
preference of fruit-based juices, his choices are in tune with international trends.
Therefore, it is orange juice that is the most preferred fruit juice flavour in India, followed
by apple, sweet orange and mixed fruit.

The findings indicate that most packaged juice drinking consumers travel abroad
on holidays. Other attributes of branded juice consumers include employment of
domestic help, ownership of assets and credit cards, and health consciousness with 80 per
cent respondents going to aerobic classes or working out at gymnasiums. Understandably
therefore, awareness and trial levels of packaged juices are higher within the SEC A
category, than among SEC B consumers, the majority of whom rated these as
aspirational. While awareness levels are similar in both Mumbai and Delhi, more trials
are generated by Delhiites than their counterparts in Mumbai.

As a clear indication that consumers perceive fruit juices as a grocery purchase,

60 per cent of the respondents consume fruit juices at home. While 55 per cent of the
respondents consumed 1-litre packs at home, 45 per cent consumed 200-ml packs. The Rs
100-crore packaged fruit juice market is estimated to be growing at 25-30 per cent
annually, with Tropicana and Dabur Foods' Real holding 40 per cent market share each.

2.2 The outer fabric attracts consumers

As consumer preferences in the country are shifting towards healthy, natural food
products, the demand for non-carbonated soft drinks is accelerating. In the face of
increasing competition, companies are redesigning the packages that they offer their
products in. At the same time, safety, long shelf life, convenience and economic viability
are important considerations while choosing packaging options.

What are the international trends in the packaging of fruit juices? Can any of these
trends be replicated in India?
Internationally, a variety of packaging formats are being used for packaging fruit
juices. One of the most popular is aseptic cartons. This is also the most popular format in
the organised juice market in India accounting for over 60 per cent of the market. The
recent entry of Mother Dairy into this segment points to the growing popularity of this
packaging format. More than anything else the entire aseptic processing and packaging
system ensures the availability of nutritious products in safe and hygienic formats, which
are also convenient to use. A look at any market in Asia will show how aseptic packaging
is growing in popularity.

The increase in demand for fruit juices in the recent years, and the growth in their
production is inevitably leading to an increase in demand for packaging options in India.
What are the technological innovations that have been introduced in the sector to cater to
this increasing demand?

The increased demand has led to an increase in the number of sizes, shapes and
even printing technology innovations, besides the obvious one of ensuring improved
product taste and quality. Manufacturers are getting more aggressive by offering new
products to consumers. Companies like Dabur, with their juice drink, Coolers, have
entered the segment. Pepsi has recently launched a variety of products in the half litre
category along with new fruit mixes. Other players like Godrej have redone their designs
to make their packages more attractive. The category is growing at a healthy rate and has
attracted new entrants like Ladakh Foods who have introduced a new variety of its
seabuckthorn nectar juice under the brand name Leh Berry.

The recent entrant into the category is Mother Dairy, which has launched three
new flavours in its fruit drinks category.

Could you elaborate on the spin-cap and cold fill technology – packaging options
and related technologies that Tetra Pak has recently introduced for packaging fruit juices.
Which companies are using these technologies and what are their benefits? What other
technologies have been introduced recently for packaging fruit juices?
The spin cap is a pack opening option that was introduced a couple of years ago. Used the
world over, it is currently being used only by Dabur in India. Tropicana and Mother
Dairy both use the recap option. Both these options ensure elimination of product spillage
at the time of pouring. The product can also be safely reused after opening, provided, of
course, it is kept in a refrigerator once the pack is opened. Cold fill technology's biggest
benefit is that it ensures microbiological safety and a bacteria free product while keeping
the nutritional values intact through the use of a gentle heat treatment process which
retains the original state of the product and ensures that the consumer gets value-for-
money.

Could you also elaborate on the slim line packaging for fruit juices and its
benefits over baseline packaging?

The difference between the two is mainly in the aesthetics. There is no difference
in the technology used in both these options. For both the manufacturer and the retailer,
slim line packaging is easier to handle in the distribution chain. It also gives the
manufacturer more surface area for graphics.
RESEARCH ANALYSIS

The primary research analysis fulfills the objectives of the study. According to the
objective the demand for the fruit juice is more but if we consider a particular product out
of the five products which are taken into consideration are Real , Tropicana, Leh Berry,
Jumpin and N-Joi.

CONSUMERS AWARNESS FOR FRUIT JUICES

If we compare the consumer awareness for each brand then it is satisfactory that
all the consumers have the knowledge regarding the fruit juices available in the market.
According to the questioner generally people drink fruit juice for energy instead of
getting relaxation. It is found that 78% consumers consume fruit juices for energy.
Though the caloric value of fruit juice is high it is consumed for the purpose of getting
energy. The consumer awareness for fruit juices is more among all consumers .

Consumers Awarness for Fruit Juices

15% 9%

T.V. 13%
NEWS PAPER
25%
MAGAZINE
WEBSITES
OTHER

38%

FIGURE-3

the source of awareness regarding the product are the T.V., newspaper, magazines,
websites, banners. It is also found out that the banners displayed in different places
attracted their attention towards the product a lot. Out of 100 percentage 13%(other) of
people attracted towards the banner advertise. Television is the most demanded for
getting awareness regarding fruit juices and their changes made time to time.38%
consumers get the idea about fruit juices from television.
CONSUMERS DEMAND FOR FRUIT JUICES

As from the above analysis it if found that the 78% consumers consume fruit
juices and they are aware about it but the apparent side says 18% consumers who are
aware of fruit juices like Real,Tropicana,Leh Berry, Jumpin, N-Joi but not aware about
the other fruit juices in the market because of their less demand. The demand for fruit
juices increases because of the growing income of each individual and increase in
purchasing capacity. The change in consumption food habit has really affected the
demand of fruit juices. The brand name which ha s great influence towards sales. Most of
the people says that real is the best brand and they will go for real. Lesser people then real
want to go for Tropicana and subsequently the demand decreases among jumpin and N-
Joi . The various campaigns organized by the fruit juice companies have also increased
the consumption demand for fruit juices. It is obtained from the primary research that
65% of consumers prefer Real juice as compared to Tropicana, Leh Berry, Jumpin and N-
joi. It is also observed that n-joi has lesser consumers attracted towards it shows the lesser
demand by consumers according to the various parameters which are explained in the
other other analysis as follows. According to the demand of the product by the consumers
the producers increase their production by keeping in eye the past demand and
competitors demand in the prevailing market. Leh Berry and Tropicana has the same
demand in the market because of their retail price in the market for which the consumers
buy it. The promotional factor which as great importance towards the demand of the fruit
juices.

CONSUMERS DEMOGRAPHIC PROFILE FOR FRUIT JUICES

FRUI JUICE ACCEPTACE ACCORDING

TO DIFFERENT AGE GROUPS

3%
7% 5% < 20
14% 20-30
30-40
43%
40-50
50-60
28%
60-70

FIGURE-4

From the primary analysis it is found that the fruit juice consumption depends
upon different age group. As per the above pie graph 43% of consumers of age group 20-
30 likes to consume fruit juice. Subsequently 28% consumers from the age group 30-
40,14% people from the age group 40-50,7% of consumers between the age group 50-
60,3% consumers between the age group 60-70 and 5% of consumers less then 20 years
of age consumes fruit juices.

CONSIDERATION OF DIFFERENT PARAMETRES

GRAPH SHOWING DIFFERENT PARAMETRES

300
TROPICANA
250
REAL
POINTS

200
150 LEH BERRY
100 JUMPIN
50 N-JOI
0

G
Y

R
TY

C
E
IT

IN
U
C

A
LI

VO

B
IL

RI

AG
A

ED
B

A
U
LA

K
FL

FE
Q

C
AI

PA
R
V

E
A

M
O
ST
CU

DIFFERENT PARAMETRES

FIGURE-5

The parameters such as availability, price, quality, flavor, customer feed back and
packaging are compared for Tropicana, Real, Leh Berry, Jumpin, N-joi .in case of
availability Tropicana has got 189 points, real has got 241 points, Leh berry has got 172
points, Jumpin has got 211 points, N-joi has got 177 points. Highest point shows the
highest preference and lowest point shows the lowest preference. according to price from
graph Tropicana has got 185 points, Real has got 218 points, Leh berry has got 204
points, Jumpin has got 230 points and N-Joi has got 208n points. In case of price real is
best. According to quality from graph Tropicana has got 250 points, real has got 255
points, Leh berry has got 230 points, Jumpin has got 180points and N-Joi has got 177
points .In case of price real is best. According to flavour from graph Tropicana has got
175 points, Real has got 246 points, Leh berry has got 190 points, Jumpin has got
170points and N-Joi has got 130 points. According to customer feed back from graph
Tropicana has got 160 points, Real has got 220 points, Leh berry has got 150 points,
Jumpin has got 130points and N-Joi has got 150 points. According to packaging from
graph Tropicana has got 252 points, Real has got 270 points, Leh berry has got 245
points, Jumpin has got 170 points and N-Joi has got 199 points.
 The comparison shows a result that real has crossed everyone in five parameters
where as other four brands are good in some parameters and not good in some
parameters. The total parameters are six and real has achieved best position in five
parameters.In case of price it is not preferable by most of the consumers in the market.

CONSUMER’S PREFERENCE FOR PACKAGING

CONSUMERS PREFERENCE FOR

PACKAGING

80
NOOFPEOPLE

70
60
50
40
30
20
10
0
TETRA PLASTIC CAN GLASS
PACK BOTTLE BOTTLE
PACKAGING TYPES

FIGURE-6

In this study it is found that packaging has also great importance towards
consumer preference as it gives rise to massive purchase and storage.
As per the graph above shown the packaging is divided into four types i.e. tetra
pack, plastic bottle, can and glass bottle. From the total sample it is analyzed that 70
numbers of people like tetrpack, 18 numbers of consumers like plastic bottle, and 9
numbers of consumers like can and 3 numbers of consumers like to have juice in glass
bottles.

CONSUMERS BEHAVIOUR ACCORDING TO PROFESSION

 PROFESSION WISE CONCUMER PREFERENCE

9% 4%

23%
53%

11%

STUDENT BUSINESSMAN EMPLOYED HOUSEWIFE RETIRED

FIGURE-7
According to the above graph 53% consumer are students.11% of consumers
arebusinessmen.23%consumers are employed,9% of consumer are housewife and 4% of
consumer are retired. The profession which shows criteria for acceptance in different
levels. According to the profession wise their perception varies upto certain extent.

COMPETITORS MARKET SHARE

The competitors market analyzed from the acceptance of particuticular product or

it can be understood like that-how many customers retained by each fruit juice barand.it
is studied that Real has captured the maximum number of customers of the market. From
the below figure- the customer retention can be known. The sample size is hundred.

MARKET SHARE

4
OI
N-J
6
IN
MP
JU
11
RY
B ER
H
LE 51
AL
RE
28
NA
P ICA
O
TR
0 10 20 30 40 50 60

FIGURE-8
 From the above graph the number of customers retained by each brand can be
known, Tropicana has retained 28 customers, real has retained 51 cusomers, Leh berry
has retained 11 customers, Jumpin has retained 6 customers and N-joi has retained 4
customers out of total total 100 customers. From this it is clear that real has retained
maximum number of customers where as N-joi has retained least numbers of customers.
The marked share of Real is more as compared to other brands.
CONCLUSION

The objective of the study is to analyze the consumer behavior with respect to
fruit juices which is carried out by considering five fruit juices brands in the market.
Tropicana, Real, Leh Berry, Jumpin and N-joi are the five brands which are taken into
consideration for the study. These five brands are identical with respect to different
characteristics. The thorough study is based on the consumer behavior analysis which
serves a great idea of wide idea regarding consumer perception when they go for a
particular brand from the market for fulfilling the need. In order to satisfy themselves
consumer perceive many things before buying which are analyzed in this paper and result
is obtained.
The whole study satisfies the objectives of the study. The market share is studied
for each brand by taking in to consideration for which product they like to buy or they are
buying. It is found that real has retained maximum number of customers where as other
brands have retained lesser number of consumer. So other brands can change their
strategy for retaining more number of customers for satisfying their objective. The other
brands can retain more number of customers if they take some initiatives for those
parameters in which they are behind the other brands. The parameters which are
considered in this study really affect the consumer buying behavior those are availability,
price, quality, quantity, customer feedback and packaging. In some cases Tropicana is
good as compared to other brands but simultaneously it is not good if we consider some
other parameters. Real has gained maximum number of points in case of availability,
quality, flavour , packaging. Real has got lesser points for price because as per consumers
the price is not satisfying them where as other brands are having satisfactory price.
Consumer awareness is also an important factor for the producers from where they know
about the consumer interest regarding their product. Consumer perception generally
changes from time to time because of the changes in brands in promotional activities.it
are obtained from the study that the awareness increases the market share of the product.
In case of demographic profile most of the students who consume fruit juices. The price
which real has set per litre of fruit juice of different flavors like orange, pineapple, apple,
grape and mixed fruit is high so generally students go for Tropicana ,N-joi and Jumpin.
These three brands serve the need of students if we consider the price as a prime factor.
The service holders who generally drink less fruit juices and their purchasing power
differ from their incomes. The profession wise division of consumes states that their
capability of purchasing the brands. Some of the professionals whose income is more
they generally go for Real and Tropicana without thinking any thing. For the higher
income personnels price is not a prime factor as studied from those consumer behavior
study. On the other hand the behavior slightly changes because of the packaging of the
fruit juices. The type of purchasing the consumers do is also obtained by considering their
frequency of buying the juices and them quantity they purchase at a time or time to time.
Mode of purchasing the juices has changed according to the consumer feedback studied
from the questioner. The consumer wants to go for the easy way of buying then juices
like the milk which is available in the market. It is concluded from this study that Real
has highest market share and has the satisfactory level in some parameters. The behaviour
of consumer changes according to the parameters which are prevailed for their
satisfaction to purchase.
RECOMMENDATION

This study gives a clear idea regarding consumer behavour while purchasing. The
strategy for the products can be changed by comparing the different factors that has
obtained from the study. Real has obtained the highest market share by keeping in
consideration the parameters like consumer feedback, packaging, delivery mode, quantity
and availability. The other brands have less market share because they don’t have the
strategy like Real to capture the market. Tropicana is very near in every aspect to real and
by changing the strategy like availability and promotional activities it can cross the
market share of Real very easily. The price of Tropicana is affordable and has more
number of customers whose profession is student and falls between the age group 20-
30.so, Tropicana can do some promotional activities where they can capture other age
group so that their market share will increase. The other three brands Leh-Berry, Jumpin
and N-joi has less market share because of the quality and the type of packaging they
made for sale. The packaging of real is satisfactory. So, they can change the packaging
style more advance tetra pack models so that they can have huge market share. It is also
observed that flavour has great role for attracting consumers. The flavour of some fruit
juices are artificial which really doesn’t attract customers during their second or third
time purchase so without adding artificial flavours natural flavour will work more
strongly for attracting consumers. To allocate the target consumers is the important work
for the producers so that they can match their product nature withy the preferences of the
consumer who are more willing to buy fruit juices. Now day’s consumers are more
attracted towards the modes of delivery so the modes of delivery can be changed by
alternate modes of delivery like home delivery and delivery by automatic machines so
that they can get fresh juices which change the psychology of customers a lot as analyzed
from this study and questionnaire. As the price of Leh Berry, N-Joi and Jumpin is
affordable it attracts the all income level of consumers, but the real has the price which
does not attract all level of consumers so alternatively to get more share he has to reduce
the profit margin with less margin. The number of consumers fall in the middle class
level so it is very nessery retain those level of consumers who have dense population in
India. The urban areas mostly keen to adapt those sophisticated products due to the social
perceptions.socillly it can be marketed by considering the social activities like festival.
The wrong notion among the people is that fruit juices are only good for athletes but that
can be changed by campaigns.

So before lunching a new fruit juice brand in market the parameters which have
taken into consideration must be utilized for better consumer attraction.
APPENDIX

Table-1: INDIA KEY SENSUS STATICS OF LAST YEAR

TABLE-2: PRODUCTION OF SELECTED FRUITS JUICES IN

INDIA
FIGURE-1: SHARE OF CATEGORIES IN INDIAN FRUITS JUICES &
VEGETABLES PROCESSING SECTOR, 2006

FIGURE-2: GROWING CONSUMING CLASS

(MN HOUSEHOLDS - ANNUAL INCOME)
FIGURE-3: CONSUMERS AWARNESS FOR FRUIT JUICES

FIGURE-4: CONSUMERS DEMOGRAPHIC PROFILE FOR FRUIT JUICES

FIGURE-5: CONSIDERATION OF DIFFERENT PARAMETRES

FIGURE-6: CONSUMER’S PREFERENCE FOR PACKAGING

FIGURE-7: CONSUMERS BEHAVIOUR ACCORDING TO PROFESSION

FIGURE-8: COMPETITORS MARKET SHARE

 QUESTIONNAIRE

1. Why do you like to drink fruit juice? Tick the appropriate one-
a) For energy !
b) For relaxation !
2. Which fruit juice do you like most? Tick the appropriate one-
A) Tropicana !
B) Real !
C) Leh berry !
D) Jumpin !
E) N-Joi !
3. Why do you prefer that?
______________________________________________

4. According to you which fruit juice is natural?

a) Tropicana !
b) Real !
c) Leh berry !
d) Jumpin !
e) N-Joi !
5. From where you are getting idea about these fruit juices?
1) Television !
2) News paper !
3) Magazine !
4) Websites !
5) Others !

6. Which fruit juice adds you have seen recently?

A) Tropicana !
B) Real !
C) Leh berry !
D) Jumpin !
E) N-Joi !
7. Which fruit juice is mostly available in shops?
A) Tropicana !
B) Real !
C) Leh berry !
D) Jumpin !
E) N-Joi !
8. While purchasing fruit juices what are the things generally you consider?
A) Brand !
B) Price !
c) Quantity !
D) Packaging !
e) Expiry date !
f) Flavor !
h) if any other please specify _______________________

9. Do you think that there should be a category of fruit juice on the basis of different age groups?
Tick any one-
A) Yes !
B) No !
10. In a week how many times do you purchase it? Tick the appropriate one-
A) 1 !
B) 2 !
C) 3 !
D) 4 !
E) 5 !
F) If more than five times then specify _____________

11. Do you like to drink fruit juices in cold season?

A) Yes !
B) No !
12. Do you think that hot summer is the appropriate time to drink fruit juice?
If yes ! -then why__________________________________
If no ! -then why __________________________________

13. How much do you like to spend for fruit juice per litre?
1)30-40 !
2)40-50 !
3)50-60 !
14. Branding is necessary for a fruit juices? ________________________

15. Are you satisfied with the packaging that they are providing to you?
A) Yes !
B) No !
16. What type of packaging would be good for fruit juice?
1) Tetra Pack
2) Plastic bottle
 3) Can

17. What are the improvements do you like to add for packaging?
______________________________________________

18. What should be the easiest way to purchase these fruit juices? Tick any one-
A) From retail shops !
B) From automatic machines !
C) Home delivery !
19. In what pack size do you like to have it? Tick the appropriate one-
1)200 ml. !
2)300 ml. !
3)500 ml. !
4)700 ml. !
5)1 liter !
6)1.5 liters !

20. Do you like to drink mixed flavored or single flavored fruit juice and why?
______________________________________________________________________

21. In case of flavors, which is best? Tick the appropriate one-

A) Tropicana !
B) Real !
C) Leh berry !
D) Jumpin !
E) N-Joi !
22. How do you like to rank Tropicana, Real and Leh berry according to the following table-

Tropicana Real Leh berry Jumpin N-Joi

Avaibility

Quality

1- for FIRST RANK,

2-for SECOND RANK,
3-for THIRD RANK

23. In case of customer feed back which is good?

A) Tropicana !
B) Real !
C) Leh berry !
D) Jumpin !
 E) N-Joi !
24. What is your profession?
i) Student
ii) Businessmen
iii) Employed
iv) Housewife
v) Retired

25. Please fill in your essential details for better understanding.

b) Name ____________________________
b) Gender Male ! Female !

c) Age ____________
d) Income ____________
BIBLIOGRAPHY

V.S.RAMASWAMY, S.NAMAKUMARI. MARKETING

MANAGEMENT, 2005
PHILIP KOTLER, MARKETING MANAGEMENT, 2005
BOTD, JR.WESTFALL, STASCH.,MARKETING RESEARCH.,2005
WWW.PRICEWATERHOUSECOOPERS.COM
WWW.RESEARCHANDMARKET.COM
WWW.FNBNEWS.COM
WWW.FAS.USDA.GOV
WWW.IBEF.ORG (INDIAN BRAND EQUITY FOUNDATION)
MARKET RESEARCH INDIA PRIVATE LIMITED
SABYASACHI SAMAJDAR, NEW DELHI