Mumbai: Diversified conglomerate ITC Ltd is looking to capture 18-20% of India’s juice market through its brand B Natural by focusing on regional flavours and offering premium versions of juices available in the market, a senior company official said.
“The challenge for us is looking at local Indian fruits and making it more accessible to the rest of the country," said Hemant Malik, head of the ITC Foods Division.
The company, which acquired B Natural in 2014 from South Indian firm Balan Natural Food, is looking to launch at least two variants by October this year, including Bel (Wood Apple) and Falsa (Grewia asiatica berry), Malik said.
B Natural has branded itself as a 100% fruit juice brand that can be part of a healthy diet and also offers regional flavours in addition to common juices such as orange and mixed fruit. The marketing plank is similar to what other rapidly growing niche brands such as Raw Pressery and Paper Boat have been offering to their largely urban consumers.
ITC has been positioning B Natural at a premium to the largest competitors in India’s Rs2,500 crore juice market, PepsiCo (Tropicana) and Dabur (Real).
“Most (1 litre tetra pack) juices are (priced) at Rs140-145. The juice market has nectars priced at Rs99, and they have stayed at that price now for the last couple of years," Malik said. Nectars are fruit-based juices that contain other ingredients such as sugars.
“For the longest time, there was a mindset of ‘should we cross the Rs99 mark?’," he said. “If you have a distinctive proposition, then it can be done."
While B Natural’s 1 litre tetra packs start from ₹ 4-99, its pomegranate juice debuted at ₹ 199 a litre. B Natural is also available in 200ml tetra packs starting at ₹ 0. ITC says it has kept its juices priced such to target both the mass and premium segments.
“We believe growth in the juice market will come from the number of consumers growing and as people who are already consuming will consume more," Malik said.
An analyst said that although the juice market in India is ripe for more competition, ITC may have to focus more on mass categories.
“ITC is present in FMCG segment at a niche level with all their premium products," the analyst from an equities brokerage firm said, requesting anonymity. “In every category they are in premium segments. They need to start targeting the lower mid-segment."
Dabur’s Real currently controls over 50% of India’s juice market share, while PepsiCo’s Tropicana has 28%, according to data from AC Nielsen from January 2017.
Now, Malik says ITC is looking to ramp up B Natural’s production while it also expands its distribution network.
“Today our manufacturing is in Bangalore, and we are soon going to run short (of capacity)," Malik said. “Our next factory is already under construction in Kapurthala in Punjab. It will be ready in April 2018, in time for the new summer season."
ITC has added around 60,000 retailers in its distribution network for B Natural.
“Penetration of juice is much lower in the south and we don’t understand why," Malik said. “Fresh fruit consumption is a lot higher in south India than here in (north) India. I would say a lot more growth (in distribution) is in the south region right now."