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“Fruit juice market to grow at CAGR of 22% over five years”
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Monday, 12 September, 2016, 08 : 00 AM [IST]
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Anurag More
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 Manpasand Beverages Ltd is a fruit juice manufacturer with a primary focus on mango, the leading juice flavour in India. Mango Sip, the company’s flagship brand, is strategically focussed towards customers primarily based in the semi-urban and rural areas. Other offerings of the company include Apple Sip, Litchi Sip, Guava Sip, Pure Sip packaged drinking water and Fons natural mineral water. In an e-mail interaction with Anurag More, Dhirendra Singh, chairman and managing director, Manpasand Beverages Ltd, stated that the Indian soft drink market was driven by innovation, particularly due to the increasing liking of consumers towards product variety and healthier beverages. Excerpts:
What is the present scenario of the fruit-based juice market in India?
The Indian soft drink market has been driven by innovation, particularly due to the increasing preferences of consumers towards product variety and healthier beverages.
As a result, there have been a number of new product launches by leading players in the industry over the past few years.
Innovation has also been targeted towards catering to popular local tastes, specific price preferences and lifestyle habits of various classes of Indian consumers.
The overall soft drink market in India saw aggregate sales of over 20,000 million litres, worth Rs 65,330 crore, in 2014.
The main segments constituting the soft drink market in India are carbonates, juices and bottled water, which together accounted for 99 per cent of the total volumes in 2014. Ready-to-drink tea, concentrates and sports and energy drinks account for the remainder.
The fruit-based juice market is one of the fastest-growing categories in the beverage segment. It is growing at a compound annual growth rate (CAGR) of 25-30 per cent in the past decade.
The juice market in India is estimated to be around Rs 10,781.62 crore - 16 per cent of the total soft drink market in India.
The juice business in India is highly dominated by unorganised players, who have a market share of over 75 per cent. The organised retail that has only 25 per cent of the business comprises juice bars, juice cafes and packaged juice players.
How do you see the fruit-based juice market in the next five years?
The fruit juice market in India is projected to grow at a CAGR of 22 per cent over the next five years, and is expected to grow more than double in the next few years.
Increasingly, we will see key players in the segment working on unique strategies to make their products more popular.
Major growth drivers in this segment are the shift in consumer demand towards non-carbonated fruit beverages due to consciousness about obesity and other related health issues, change in lifestyle, affordability and availability.
This shift is creating newer opportunities for beverage manufacturers throughout India. The opening of markets in Tier-II and III cities of the country is also expected to contribute towards the growth of this sector.
What is the consumption pattern for juices? What are the growth drivers for the sector?
Owing to the changing lifestyles and increasing disposable incomes, the fruit juices have created a place for themselves in household consumption, social gatherings and snacking.
Due to their accessibility and convenience and anytime consumption, out-of-home consumption of fruit juices is becoming increasingly popular.
Studies have also shown that people prefer small individual tetra packs to PET bottles. Among flavours, mango is the most popular, with an 80 per cent market share by volume.
In rural areas, consumers are generally price-sensitive and mostly prefer conventional homemade beverages, soft drinks, etc.
However, in recent times, consumers in rural markets have also begun to move towards innovative products with a healthy tag. This is expected to give a boost to the fruit juice market.
India just stands at 20ml per capita consumption of fruit juice-based beverages, compared to 45 litres in Germany, 42.5 litres in Switzerland and 39 litres in the United States.
This shows the huge opportunity India has in terms of expansion of business if proper strategies are devised to make fruit juices easily available and affordable.
Tell us about the demand-supply scenario of juices.
Growing health consciousness and changing food habits among consumers will keep the demand for fruit juices on an upward trajectory.
On the other hand, rising food inflation will put a constraint on the year-long supply of raw materials and the non-stop production of juices for the full season. To add to it, transportation and logistics costs will also pose further challenges.
Brief us about the product portfolio of Manpasand Beverages.
Manpasand Beverages is the successful story of a visionary first-generation entrepreneur, Dhirendra Singh, who has built one of India’s fastest-growing fruit juice companies and is now ready to take on the global cola giants head on.
Its flagship brand, Mango Sip, is extensively spread out in rural and semi-rural regions and now it is being brought into urban markets through modern retail and tie-ups with various food and ice cream retail majors.
In an effort to further its expansion and diversify the product portfolio, Manpasand has recently launched Fruits Up, a carbonated fruit drink in different flavours, and Manpasand ORS.
Under the Manpasand ORS brand, it offers fruit drinks with energy replenishing qualities with a primary focus on North-east India and planning to take it pan India in the coming months.
Other offerings of the company include Apple Sip, Litchi Sip, Guava Sip, Pure Sip packaged drinking water and Fons natural mineral water.
It is the third-largest player in India as far as carbonated products are concerned.
The company has recently tied up with leading restaurant chains including Havmore, Barista, Baskin Robbins and Costa Coffee, and 2,000 (of the 3,000) modern-format retail stores across India.
It is in advanced talks for tie ups with many multinational food chains and retailers.
What makes you different from other players?
Manpasand Beverages Ltd, whose turnover is Rs 400 crore, has the unique distinction of being the only pure play company in the sector in the Indian capital markets.
In the fast-growing fruit-based beverage market in India, Manpasand Beverages has emerged as a formidable competitor to the larger foreign and Indian rivals.
The company’s value-for-money offerings, strong focus on affordable price points, innovative products (like fruit-based carbonated soft drinks) and distribution strategies are going to be its major strengths going forward.
Tell us about your expansion plans. How much will you be investing for the same?
Since Manpasand Beverages’ listing earlier this year, the company has adopted an aggressive expansion strategy wherein our main focus is penetration into the urban market.
We have been forming key alliances with various domestic and global companies to further this ambition.
The company is following a well-defined two-pronged strategy for fast-paced growth. While we continue to increase our significant presence in rural and semi-rural markets, we have also started aggressively tapping into the urban markets where our presence was minimal until recently.
Manpasand Beverages has recently raised Rs 400 crore through initial public offering (IPO) to fund its expansion plans.
It will use the IPO proceeds to set up a new manufacturing facility in Haryana and modernise the existing facilities in Vadodara and Varanasi.
Do you have any plans to venture into new segments?
Manpasand’s mission is to emerge as one of the leading beverage brands in the world, and bring to the world a portfolio of quality beverages that cater to the needs of the consumers.
Keeping in mind the tastes and preferences of our customers, we will continue to add new products to our portfolio at regular intervals.
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