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Comparative Study on Mango Drink in
regards to Maaza, Frooti and Slice
Dissertation Submitted to thePadmashree Dr. D.Y. Patil University
In partial fulfillment of the requirements for the
award of the Degree of
MASTERS IN BUSINESS ADMINISTRATION
Submitted by:
VISHAL A MEHTA
(Roll No. MBA-CORE-01028)
Research Guide:
(ASST. PROF. SUMAN SAURABH)
Department of Business ManagementPadmashree Dr. D.Y. Patil University
CBD Belapur, Navi Mumbai
March 2012
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DECLARATION
I hereby declare that the dissertation Comparative Study on Mango
Drink in regards to Maaza, Frooti and Slice submitted for the MBA
Degree at Padmashree Dr. D. Y. Patil Universitys Department of Business
Management is my original work and the dissertation has not formed the
basis for the award of any degree, associate ship, fellowship or any other
similar titles.
Place: Mumbai (Vishal A Mehta)Date: Signature of the Student
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CERTIFICATE
This is to certify that the dissertation entitled Comparative Study on
Mango Drink in regards to Maaza, Frooti and Slice is the bonafide
research work carried out by Mr. Vishal A Mehta student of MBA, at
Padmashree Dr. D. Y. Patil University, Department of Business
Management during the year 2011 12, in partial fulfillment of the
requirements for the award of the Masters in Business Management and that
the dissertation has not formed the basis for the award previously of any
degree, diploma, associate ship, fellowship or any other title.
(Asst. Prof. Suman Saurabh)
Dr. R. Gopal,Director,Department of Business Mgt,Padmashree Dr. D.Y. Patil University)
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ACKNOWLEDGEMENT
It gives me great pleasure in submitting this final project report on
Comparative Study on Mango Drink in regards to Maaza, Frooti and
Slice.
I thank Asst. Prof. Suman Saurabh for guiding me throughout this project
work and also for motivating me in different ways. He has been atremendous helping hand in completing this difficult task. I am grateful for
having had an easy or any time access to such knowledgeable and guiding
spirit.
I am also thankful to my family, friends, teachers and staff who have been of
great help and support in completion of this report.
I feel there is ample scope of improvement upon the work of this nature and
shall be thankful if any suggestion is offered for its improvement.
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TABLE OF CONTENTS
ChapterNo Title
PageNo
A List of Graphs
B List of Tables
1 Executive Summary 1
1.1 Scope of the Study 5
1.2 Objective of the Study 5
1.3 Research Methodology 6
1.4 Literature Review 7
2 Introduction 23
2.1 Non Carbonated Soft Drink Industry in India 23
2.2 What is Beverage? 25
2.3 Beverage Industry in India 29
2.4 Whats in Soft Drink? 32
3 About the Industry 41
3.1 Indian Beverage Market 43
3.2 Study of growth of Soft Drink Market 46
4 Company Profile 53
4.1 Coca-cola 53
4.2 Pepsico 58
4.3 Parle Agro 625 Players in Mango Drink Segment 66
5.1 Frooti 66
5.2 Maaza 69
5.3 Slice 71
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6 SWOT Analysis 74
6.1 SWOT Analysis of Mango Drink in India 75
6.2 SWOT Analysis of Maaza 76
6.3 SWOT Analysis of Slice 77
6.4 SWOT Analysis of Frooti 78
6.5Differential analysis of Mango Drink according to pricein the Market 79
7 Marketing Mix of Frooti, Maaza and Slice 82
8 Data Analysis and Findings 90
9 Recommendations and Suggestions 124
10 Conclusion 125
11 Bibliography 126
12 Annexure 127
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LIST OF GRAPHS
Graph no. Title of Graph
1 Top Ten Mango Producing Countries
2 Beverage Industry in India
3 Data Analysis and Findings
LIST OF TABLES
Table no. Title of Table
1 Top Producers of Mangoes, 2008-09
2 Top Mango Producing Countries of the world 2011
3 Market Size and Composition of Packaged Foods
4 Indian Beverage Market 2002-07
5 Sales Volume of non alcoholic drinks in India 2009
6 Mango Drink Analysis according to Price in Market
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CHAPTER NO. 1
EXECUTIVE SUMMARY
EXECUTIVE SUMMARY
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Alphonso is a mango cultivar that is considered by many to be one of the
best in terms of sweetness, richness and flavor. It has considerable shelf life
of a week after it is ripe making it exportable. It is also one of the most
expensive kinds of mango and is grown mainly in Kokan region of western
India. It is in season April through May and the fruit weigh between 150g
and 300g each.
Non aerated Mango drinks like Frooti (Parle Agro Co.), Jumpin (Godrej
Industries Ltd), Maaza (Coca Cola Co.), Dukes Mangola and Slice (PepsiCo
Inc.) are very popular in India. Many other local brands are also available.
Alphonso mangoes are mostly exported from Ratnagiri and sindhudurg
districts of Maharashtra.
Here main three mango drinks giants Coca Cola, PepsiCo & Parle Agro
marketed their mango drinks i.e. Maaza, Slice & Frooti respectively. India's
mango obsession might be as old as the fruit but the business opportunities it
is creating for food processing sector is something that has never happened
before. While mango drink brands like Coca-Cola (Maaza), Pepsi (Slice),
Dabur (Real Mango juice) and Parle Agro (Frooti) are promoting the
category with new marketing and advertising campaigns.
New capacities, driven by the mango juice and drink segment, are being
added even as the industry consolidates itself. The total domestic processing
capacity for the king of fruits has gone up many times in the past two years
and now is estimated at 15,000 tonnes per day during the season. The
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demand for processed Indian mango products is growing by about 25% in
both the domestic and the export markets.
The organised beverage market in India is ruled by mango juices, nectars
and drinks that have about 85% of the market share; about 38 million cases
of mango-based drinks are consumed by Indians every year.
Similarly Coca-Cola, whose product Maaza is said to have more than 35%
market share for mango drinks in India. The demand for this mango all over
India is abnormal. Anybody cant forecast the exact demand & growth of
this mango drinks eying on market. India is the world's largest mango
producer, accounting for more than 50 per cent of the world's output in
2012.
Top producers of mangoes, 2008-09 Country Production in millions of tons
are:-
Countries Production in millions of tonsIndia 13.6
China 4.2
Thailand 2.5
Indonesia 2.2
Mexico 1.9
Pakistan 1.8
Brazil 1.2
Total 34.9Top producers of mangoes, 2008-09
"India produced 12,000,000 tonnes of mangoes as against the world's total
production of 23,455,000 tonnes -- 51.1 per cent," S Dave, director of
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Agricultural and Processed Food Products Export Development Authority,
said in London.
Countries Share in Global production (in %)India 51
China 9
Mexico 6
Thailand 5.2
Philippines 4
Pakistan 3.8
Nigeria 3
Indonesia 2.6
Brazil 2.5Egypt 1
Top Mango Producing Countries of the World
Source: CIA World Fact book (2011)
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Source: www.mapsofworld.com
Thus India is worlds Largest manufacturing Country and the companies like
Coca-cola, PepsiCo and Parle Agro have a big benefit to manufacture there
product which are based on mango. This companys newer get shortage of
raw material and it is an added advantage to the companies.
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SCOPE OF STUDY
1. Detailed study of the non-carbonated soft drinks industry in India.
2. Analysis of Slice, Maaza and Frootis performance against each other.
3. Analyzing consumer perception based on various parameters such as
purchase frequency, effect of sales promotion schemes, brand
attributes and consumer loyalty, packaging, pricing and advertising.
OBJECTIVES OF THE STUDY
1. To study the taste and preferences of the consumer among
Slice, Maaza and Frooti.
2. To study the marketing mix of Slice, Maaza and Frooti.
3. To study the market share of Frooti in the non-Carbonated
Soft Drink (NCSD) category.
4. To study the consumption pattern of the Slice, Maaza and Frooti.
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RESEARCH METHODOLOGY:
A) DATA COLLECTION
1) Primary Source
Consumers
2) Secondary Source
Website
Magazines and Newspapers
B) RESEARCH INSTRUMENTS
Questionnaire
C) SAMPLING PLAN
1) Sampling Unit: Who is to be surveyed?
Urban Consumers
2) Sample Size: How many people to be surveyed?
100 Units (of all age groups)
3) Sampling Procedure:
Convenience Sampling
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Literature Review
ARTICLE NO. 1
PepsiCo India launches interactive promotion for Mango Slice
Friday, March 09, 2012
This story ran in PEPline, PepsiCos global employee newsletter, and isproudly brought by a PepsiCo employee or a friend or family member of a
PepsiCo employee. (Pepsi.com)
In India, Slice has come up with a unique opportunity for its consumers - an
unmatched experience providing "Pure Mango Pleasure," and a special
surprise in each of its glass bottles. Through this unique interactive
promotion "Katrina ka number, crown ke under" (Katrinas number, under
the crown) consumers can win a date with Bollywoods leading actress
and Slice brand Ambassador Katrina Kaif.
Every Slice cap features a mobile number which consumers can call and, if
they're lucky, they win a date with Katrina. One winner will win a date every
day through March 31. Other prizes include collectible Slice
merchandize and personalized digital wallpaper.
This Slice campaign is led by a TV commercial that shows Katrina inside a
Slice bottle. Directed by Cannes Gold winning director Prakash Varma, the
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commercial was shot underwater in Thailand, and has artistically captured
underwater visuals that give Katrina an ethereal look inside the bottle.
Slice is all about the indulgence that is bottled in every single pack, and the
concept of this unique initiative is to offer an unforgettable experience to our
consumers via every bottle of Slice" said Homi Battiwalla, executive vice
president, Colas, Hydration & Mango-based Drinks - PepsiCo India. "We
have focused extensively on building engagement with our consumers via
exciting experiences planned online and on-ground, including radio
integrations, an interactive outdoor campaign with web interfaces and larger-
than-life Katrina in a Slice bottle installations, among others."
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Article no. 2
Coca-Cola System Investing $2 Billion in Long-Term,
Sustainable Growth in India
(Investment includes new infrastructure, partnerships, brand building and
sustainability programs)
GURGAON, India, Nov. 14, 2011
Coca-Cola India, the country's leading Beverage Company, today announced
that the Coca-Cola system in India will invest US$2 billion over the next
five years, beginning in 2012, to further capture the opportunity in the Indian
nonalcoholic ready-to-drink (NARTD) beverage market. India is a strategic
growth country for The Coca-Cola Company, ranking among its top 10
markets in volume globally and as the largest market in the Eurasia and
Africa Group.
Ahmet C. Bozer, Coca-Cola's President, Eurasia and Africa Group, said,
"India is one of our most important growth markets as we work toward our
2020 Vision of doubling system revenues and servings this decade. The
opportunity in the packaged beverage segment is immense, and our efforts inIndia are focused on being the beverage of choice all day, every day. If we
continue to do the right things each day and at all times, it would not
surprise me if India becomes one of the top five markets for the Company
globally by the end of this decade."
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NARTD beverages have enormous growth potential in India. The Coca-Cola
Company and its bottling partners have robust plans to capture this
opportunity with investments in innovation, consumer marketing and brand
building, expansion of distribution and cold drink equipment placement as
well as further development of manufacturing capacity to meet growing
consumer demand.
The Coca-Cola system has already invested over US$2 billion in India since
it re-entered the country in 1993, and currently it directly employs more than
25,000 people. The system is estimated to have created indirect employment
for more than 150,000 people in related industries through its vast
procurement, supply chain and distribution system. The investments
announced today by Coca-Cola will further catalyze economic growth and
create new opportunities for the local community.
Atul Singh, President & CEO, Coca-Cola India and South West Asia, said,
"This investment is a part of our long-term commitment to invest in
innovation, partnerships and a portfolio of brands that will enable us to grow
our business in a sustainable and responsible way. In addition to our
infrastructure and capabilities, the new investment will also focus on
enhancing the consumer experience, building brand loyalty and contributing
to environmental sustainability and community development. Our India
business has been growing at a robust rate over the last five years, and our
goal is to continue this growth momentum. The country's demographics,
economic and social parameters are all huge drivers of growth and we have
to ensure that we capitalize on the opportunity."
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The Coca-Cola Company has registered volume growth in India for the past
21 quarters, 15 of which have seen double-digit growth. Two of the
Company's core sparkling brands -- Thums Up and Sprite -- are the country's
top selling soft drink brands. Trademark Coca-Cola is one of our fastest
growing sparkling brands and Maaza is India's largest selling juice drink.
Coca-Cola was recently recognized as India's most trusted beverage brand in
Brand Equity's 2011 "Most Trusted Brands Survey," and Coca-Cola India
ranks among the top five most respected FMCG companies in India as
ranked inBusiness World's 2011 "Most Respected Companies Survey."
The Coca-Cola system has a long history of partnership with non-
governmental organizations in India for community development and
sustainability initiatives. As a system, Coca-Cola has now achieved a net
zero balance with regard to groundwater usage in India. It is well integrated
with local Indian communities and is a valued contributor to economic and
social growth.
The Company and its bottling partners are strong supporters of education in
India through programs like the 'Coca-Cola NDTV Support My School'
campaign, which is aimed at creating more than 100 model schools in India.
The Company also supports sports programs to encourage active, healthy
living such as the Coca-Cola Under-16 Cup cricket tournament, the Coca-Cola Mir Iqbal Hussain Trophy football tournament, Sprite Gully Cricket
and Sprite NBA Jam.
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Worldwide, The Coca-Cola Company and its bottling partners are investing
nearly $30 billion over the next five years to support anticipated growth
across its system. These investments range from new manufacturing
facilities to new distribution systems to new marketing investments in
emerging economies. The Coca-Cola system currently employs more than
700,000 people worldwide, making it one of the world's top five private
employers.
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Article no. 3
Coca-Cola India, Jain Irrigation Partner with Farmers toBoost Mango Production (thecoca-colacompany.com)
September 27, 2011
Coca-Cola India and Jain Irrigation have launched a unique partnership to
help India's mango famers double their yields and increase their incomesthrough the use of modern farming practices.
Project Unnati will promote the use of Ultra-High Density Plantation
(UHDP) practices, which help mango orchards reach their full potential in
three to four years, compared with seven to nine years with traditional
planting methods. These sustainable techniques also allow nearly 600 trees
to be planted on a single acre, compared to the conventional method of 40
trees per acre.
During the project's first phase, 200 demo farms between one and three acres
will use UHDP techniques for mango cultivation while also utilizing the
benefits of drip irrigation. This will improve farmers' annual income by
increasing per-acre yields while simultaneously decreasing the amount of
water used during mango production.
Coca-Cola India and Jain Irrigation each will invest USD$1 million in the
initial phase of the project, which will focus on select farms in the Chittoor
and Cudappa districts of Andhra Pradesh. This area is renowned for its
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production of the Totapuri Mango, a key ingredient in Maaza, India's top-
selling mango drink.
UHDP practices represent viable and sustainable solutions to meet the
growing demand for packaged mango-based beverages in the coming years.
The initial demo farms will showcase and train farmers on UHDP practices
under a capability-building program jointly managed by Coca-Cola
University and Jain Irrigation. Coca-Cola University's curriculum of training
programs in India includes "Parivartan," which has successfully trained
more than 70,000 traditional retailers through classroom teaching and acustomized, on-the-go training bus.
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Article no. 4
Maaza: Mango mazaa, round the year
By Anushree Bhattacharyya, afaqs!, New Delhi, February 07, 2012
The campaign for the mango drink is based on the thought that things that
people desire and love the most should be accessible to them, anytime and
anywhere.
The new campaign for Coca-Cola's mango-based drink Maaza focusses on
the idea that things that people desire and love the most should be accessible
to them, anytime and anywhere.
Conceptualised by Leo Burnett, the television commercial, titled 'Har
mausam aam', focusses on how fruit-sellers and vendors engaged in selling
mangoes seek alternate employment opportunities (ranging from astrology
to dentistry) during off season. With Maaza, consumers can now experience
the taste of mango in all seasons. This also provides an employment
opportunity to the vendors, who can sell Maaza throughout the year, along
with real mangoes during summer. This proposition is further stressed with
the tagline Maaza - 'Har mausam aam'.
According to Andriy Avramenko, vice-president, juice business, Coca-Cola
India, Indians often passionately debate the experience of having a mango,
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and it is the experience that they crave more than the taste. "Over the years,
we have relished different varieties of mangoes. The latest campaign for
Maaza is designed to give all mango lovers the choice to enjoy the
superlative taste experience of the delicious fruit all through the year, with a
new variety -- Maaza, the 'Har mausam aam', he says.
"The thought is to strengthen brand Maaza's strong association with the
mango in a very entertaining and engaging manner," adds Avramenko.
K V Sridhar, national creative director, Leo Burnett, explains, "Whether it is
'Bina guthali walla aam' (seedless mango) and 'Aam ki pyaas bujhaye', to
'Jaldi kya hai', Maaza has always been positioned as an alternative for people
who love mangoes and are ready to do anything for it. The new tagline, 'Har
mausam aam', combines all earlier thoughts and re-positions Maaza as the
natural answer to the problem of being unable to consume mangoes once the
summer season gets over."
In addition to a television campaign, Coca-Cola plans to roll out a range of
initiatives including out of home (OOH), point of sale merchandise, and on-
ground activations across key markets.
Striking the right chord
The television campaign draws mixed reviews from industry professionals.
While most agree that 'Har mausam aam' is the right idea for the brand, they
add that the idea could have been brought alive in a more interesting way.
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Ryan Menezes, chief creative officer, Percept/H, says, "The ad has a
promising start, but ends with a whimper -- with a standard product
endorsement style that shows a kid on top of a mango tree mouthing the line.
The TVC is, however, well produced and cast. 'Har mausam aam' is a strong
platform, which could have probably been exploited better from the
viewpoint of the consumer, rather than the mango sellers, though Maaza has
been down that path before."
Meraj Hasan, vice-president, strategic planning, Everest Brand Solutions,
calls the idea strategically correct on the insight about Indians missing the
mango season, and round the year consumption cues.
"Moreover, the mango sellers' side of the story has been executed well, with
a good cast, which further makes it entertaining. Over all, the idea of the
commercial works and is also a welcome departure from the last 'wannabe
commercial' Jaldi kya hai," he adds.
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ARTICLE NO. 5
It's all fun and games with Frooti
By Biprorshee Das, afaqs!, Mumbai, April 06, 2011
Continuing with its theme of 'Why Grow Up', Frooti's latest 'Crazy Mango
Fun' campaign takes to further engagement with an outdoor game show.
The shades are drawn. The ice buckets are out. The aroma of luscious
mangoes fills our senses. And, Frooti launches its new campaign as the
country waits eagerly to savour the king of fruits. After Frooti 'Slurpbox' and
the much popular 'Mango Surprise' campaign last summer, Frooti carries
forward the theme of 'Why Grow Up' this year.
This time around, it is a game show. The campaign - Crazy Mango Fun -
created by Creativeland Asia with the team at Parle Agro, is a
conceptualised branded entertainment for viewers in the form of a mango-
themed outdoor game show.
For the game show, called Mango Slam Bam Bam Bam, a set with giant
mangoes was created with three mango-based games. Eight rigged cameras
on the set captured 150 contestants in the age group of 15-60 years trying
their hands at the games over a period of three days.
Multiple 30-second television commercials featuring the participants in the
games are being aired, currently. Ram Madhvani of Equinox Films has
directed the films.
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"The last time, we interpreted a certain television format and created it
around the mango. This time, we went a step ahead and took on reality game
shows," says Sajan Raj Kurup, founder and creative chairperson,
Creativeland Asia.
"Madhvani and I often joked after the shoot that maybe we should retire and
do game shows," Kurup quips.
He says that it is challenging to reinvent the category every year and do
different things. "All agencies handling similar products get almost the same
brief. But, how much more can you keep saying the same thing? We brokeFrooti down. It is a fun drink. So, we thought of creating an experience.
People will remember people having fun with the mango," says Kurup.
"Nobody has the time for verbal gymnastics. We are the market leaders and
we want to head confidently and demonstrate the same. That is the genesis
of 'Why Grow Up'," he adds.
According to Madhvani, it is being ridiculous, but in a good way. He says
that communication needs to get people talking about it.
"We are not just looking at a stand-off film, but at interaction. The best work
in advertising is one that goes beyond the usual and becomes a part of
popular culture. With the Frooti campaign, the biggest challenge for me was
to create the atmosphere outside the camera that would capture the emotions,
the overwhelming craziness inside it," he says.
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"My job was not just about placing the cameras, but to capture the reality -
the mood - to get people to react spontaneously and be themselves,"
Madhvani adds.
Clearly aimed at higher engagement with the consumer, the integrated
campaign involves multiple 30-second TVCs featuring the participants, an
extensive social media campaign across various vehicles, direct marketing
and on-ground activation such as replicating the games at malls and other
strategic locations, sampling and radio.
A microsite, www.crazymangofun.com, is also live where games are beingdeveloped, where one can superimpose other faces on the faces of the
contestants in the ad and forward it.
Frooti is also tying up with a youth channel to run the content as a branded
game show and a bigger blast is expected during the IPL.
Nadia Chauhan, joint managing director and chief marketing officer, Parle
Agro, says, "We have the advantage of using innovation in our
communications. The new TVC is radical in its approach, taking this
innovative reality TVC format to a whole new level that will help us
communicate the brand philosophy of 'Why Grow Up' and connect with
consumers across age groups."
The media duties for the brand are handled by OMD.
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Crazy Enough
The campaign has evoked mixed responses from industry experts. While the
strategy that facilitates large scale engagement has been welcomed andmuch appreciated, the films have met with slight criticism, as well.
Brijesh Jacob, managing partner, White Canvas, is of the view that the films
get a tad monotonous.
"As a format, the previous campaign was far more entertaining. The films in
this campaign, in the zone of fun games, get a bit repetitive after a fewwatches. If you have seen one film, you feel you have seen them all. The
level to up the humour in some gets a little slapstick, too," says Jacob.
However, he is all for the strategy, which he thinks works well for the brand
to stay on top of the mind.
"It is fantastic. There is only so much you can talk about with a product like
this. It is a low involvement category, and it is very important for the brand
to stay on the top of the consumer's mind. So, it is phenomenal for the brand
to take that higher ground," Jacob says.
Jitender Dabas, vice-president and head, planning, McCann Erickson, looks
at the campaign at large, offering his comment on the same, as well as the
category. According to him, Frooti occupying the territory of fun, has bothits advantages, as well as risks.
"Mango as a fruit can be seen at two levels. It is associated with extreme
taste cravings, as well as the fun that is associated with the fruit. Frooti
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seems to occupy the fun category. The creative device generates curiosity
instead of craving. The format breaks clutter, creates buzz and has the
potential to step off TV for a complete integrated campaign," says Dabas.
"In this case, however, the advertising will be talked about much more than
the product. Do I feel like reaching out for a mango drink after watching the
ad? No! Will I be talking about the campaign? Yes! Right now, Frooti might
not have to bother with the campaign having such clutter breaking potential,
but Maaza and Slice are focussing on taste and craving. Hence, there is a
risk of the brand losing the taste association," adds Dabas.
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CHAPTER NO. 2
INTRODUCTION
NON-CARBONATED SOFT DRINK INDUSTRY IN INDIA
AN OVERVIEW:
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The non-carbonated SOFT DRINK (NCSD) sector can be classified as Fruit
drinks, Nectar and Juices. The classification is based on the percentage of
the fruit pulp content in the beverage.
Fruit drink has to have minimum fruit pulp content of 10%, while Nectar
needs to have a minimum fruit pulp content of 25%. The total size of the
branded noncarbonated beverages in the organized segment is estimated at
Rs.500 crores. The Fruit drink segment is estimated at Rs.250-300 crores,
while the Juice market (Branded & Packaged) is estimated at Rs 150 crores.
Nectar is a small category of around Rs 35-50 crores. In the fruit drink
category, Parles Frooti, Godrejs Jumpin and Coca-Colas Maaza and
Pepsis Slice are the major brands. In the Nectar segment, the key national
players are - Dabur, Godrej Xs and Parles Appy.
The two key national level players in the juice segment are Tropicana and
Real. Real is the market leader with 55-60% market share. Tropicana has an
estimated share of 30-35%. Several local / regional brands also exist, besides
a huge unorganized sector.
The Juice category is the fastest growing segment at present, estimated to be
growing by 20-25% p.a. The fruit drinks category has also been witnessing
growth of around 5% p.a.
The main reason for this growth in the NCSD Category is the change of the
consumer preference from the carbonated to the non-carbonated soft drink
sector mainly due to increasing Health Awareness among consumers and the
Pesticide issue relating to Coke and Pepsi.
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In the Fruit Drink segment, Frooti is the clear market leader with around
85% market share but in the NCSD category as a whole, its 12 share has
been declining because of the growth in Fruit Juice segment.
So, with the growth of the NCSD category, Frooti has to compete with all
the segments in this category to take a larger share of this growth.
BEVERAGE
What is beverage?
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A drink, orbeverage, is a liquid specifically prepared for human
consumption. In addition to basic needs, beverages form part of
the culture of human society. Or any liquid suitable for drinking; Or a liquid
to consume, usually excluding water; a drink. This may include tea, coffee,
liquor, beer, milk, or soft drinks.
Types of beverage
The various types of beverage are:
Alcoholic beverages
Non-Alcohol beverages
Soft drinks
Fruit juice
Hot beverages
Other
Alcoholic beverages
An alcoholic beverage is a drink containing ethanol, commonly known as
alcohol, although in chemistry the definition of an alcohol includes many
other compounds. Alcoholic beverages, such as wine, beer, and liquor have
been part of human culture and development for 8,000 years.Non-alcohol beverages
Non-alcoholic beverages are drinks that would normally contain alcohol,
such as beer and wine but are made with less than .5 percent alcohol by
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volume. The category includes drinks that have undergone an alcohol
removal process such as non-alcoholic beers and de-alcohol zed wines.
Non-alcoholic variants:
Low alcohol beer
Non-alcoholic wine
Sparkling cider
Soft drinks
The name "soft drink" specifies a lack of alcohol by way of contrast to the
term "hard drink" and the term "drink", the latter of which is nominally
neutral but often carries connotations of alcoholic content. Beverages
like colas, sparkling water, iced tea, lemonade, squash, and fruit are among
the most common types of soft drinks, while hot chocolate,
hot tea, coffee, milk, tap water, alcohol, and milkshakes do not fall into thisclassification. Many carbonated soft drinks are optionally available in
versions sweetened with sugars or with non-caloric sweeteners.
1. Fruit juice
Juice is a liquid naturally contained in fruit or vegetable tissue. Juice is
prepared by mechanically squeezing or macerating fresh fruits or vegetables
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without the application of heat or solvents. For example, orange juice is the
liquid extract of the fruit of the orange tree. Juice may be prepared in the
home from fresh fruits and vegetables using variety of hand or
electric juicers. Many commercial juices are filtered to remove fiber or pulp,
but high pulp fresh orange juice is a popular beverage. Juice may be
marketed in concentrate form, sometimes frozen, requiring the user to
add water to reconstitute the liquid back to its "original state"
2. Hot beverages
Hot beverages, including infusions. Some times drunk chilled.
Coffee-based beverages
Cappuccino
Coffee
Espresso
Caf au lait
Frappe
Flavored coffees (mocha etc.)
Latte
Hot chocolate
Hot cider
Mulled cider
Tea-based beverages
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Flavored teas (Chai etc.)
Green tea
Pearl milk tea
Tea
Herbal teas
Yerba Mate
Roasted grain beverages
Sanka
3. Other
Some substances may either be called food or drink, and accordingly be
eaten with a spoon or drunk, depending on solid ingredients in it and on how
thick it is, and on preference:
Soup
Yogurt
BEVERAGE INDUSTRY IN INDIA
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India is home to one of the most ancient cultures in the world dating back
over 5000 years. Beverages industry in India plays an important role in the
Indian FMCG market. It is an industry, in which the players constantly
innovate, in order to come up with better products to gain more market share
and to satisfy the existing consumers.
The beverage industry is vast and there various ways of segmenting it, so as
to cater the right product to the right person. The different ways of
segmenting it are as follows:
BEVERAGE
S
Alcoholic Non-Alcoholic
Carbonated Non-
Carbonated
Cola Non-Cola Non-Cola
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Alcoholic, non-alcoholic and sports beverages
Natural and Synthetic beverages
In-home consumption and out of home on premises consumption.
Age wise segmentation i.e. beverages for kids, for adults and for
senior citizens
Segmentation based on the amount of consumption i.e. high levels of
consumption and low levels of consumption.
If the behavioural patterns of consumers in India are closely noticed, it could
be observed that consumers perceive beverages in two different ways i.e.
beverages are a luxury and that beverages have to be consumed
occasionally. These two perceptions are the biggest challenges faced by the
beverage industry. In order to leverage the beverage industry, it is important
to address this issue so as to encourage regular consumption as well as and
to make the industry more affordable.
Four strong strategic elements to increase consumption of the products of the
beverage industry in India are:
The quality and the consistency of beverages needs to be enhanced so
that consumers are satisfied and they enjoy consuming beverages.
The credibility and trust needs to be built so that there is a very strong
and safe feeling that the consumers have while consuming the
beverages.
Consumer education is a must to bring out benefits of beverage
consumption whether in terms of health, taste, relaxation, stimulation,
refreshment, well-being or prestige relevant to the category.
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Communication should be relevant and trendy so that consumers are
able to find an appeal to go out, purchase and consume.
The beverage market has still to achieve greater penetration and also a wider
spread of distribution. It is important to look at the entire beverage market,
as a big opportunity, for brand and sales growth in turn to add up to the
overall growth of the food and beverage industry in the economy.
Whats in Soft Drinks?
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Soft drinks have been part of the American lifestyle for more than 100 years.
Many of todays soft drinks are the same as the first ones enjoyed in the
1800s.
Soft drink production begins with the creation of flavored syrup using a
closely-guarded company recipe. The syrup is mixed with purified water and
then carbonated by adding carbon dioxides gas under pressure. This
carbonation creates the tingly fizz that gives soft drinks a refreshing taste.
Now for a closer look at soft drink ingredients.
Like other foods, the ingredients that are used soft drinks are approved and
closely regulated by the U.S. Food and Drug Administration (FDA). All of
the ingredients used in soft drinks are found in a variety of other foods.
Water
Soft drink production starts with a pure source of water. Regular soft drinks
contain 90% water, while diet soft drinks contain up to 99% water. Drinking
water often contains trace amounts of various elements that affect its taste.
You have probably noticed that tap water tastes different in various regions
of the country. Bottlers use sophisticated filtering and other treatment
equipment to remove any residual impurities and to standardize the water
used to make soft drinks.
Carbon Dioxide
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A colorless and odorless gas, carbon dioxide is the essential characterizing
in all carbonated beverages. It is given off when we breathe and is used by
plants to produce oxygen.
When dissolved in water, carbon dioxide imparts a unique taste. For that
reason natural sources of carbonated, or effervescent, mineral waters were
once highly prized. These rare mineral waters were also believed to have
beneficial medicinal properties. Efforts to make and sell artificial
effervescent mineral water were well underway in Europe and the U.S. by
1800.
It was the innovative step of adding flavors to these popular soda waters
that gave birth to the soft drink beverages we enjoy today. In the early days
of soft drink manufacturing, carbon dioxide was made from sodium salts.
This is why carbonated beverages were called sodas or soda water.
Today, bottlers buy pure carbon dioxide as a compressed gas in high-
pressure cylinders. Carbon dioxide gas is absorbed into the flavored soft
drink in a carbonator machine just before the container is sealed. While
under pressure and chill the soft drink may a sorbe up to four times the
beverage volume of carbon dioxide.
When you open a soft drink bottle or can, he pop you hear and the fizz
you see is the rapid escape of carbon dioxide gas caused by the sudden
release of pressure on the beverage.
Flavors
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One of the most important ingredients in soft drinks is flavoring. Most soft
drink bottlers mix many individual flavors to create distinctive tastes.
Natural flavors in soft drinks come from spices, natural extracts and oils.
Fruit-flavored soft drinks such as orange and lemon-lime often contain
natural fruit extracts. Other flavors such as root beer and ginger ale contain
flavorings made from herbs and spices.
There are also some artificial or man-made flavorings used in soft drinks.
Nature does not produce enough of some flavors to satisfy world demand.
Also, some natural flavors are limited geographically and seasonally.
Colors
Many people dont realize how important color is to taste perception. Color
affects our psychological impression of food. If you don believe it, try
eating a familiar food in the dark. The colors used in foods and beverages
come from both natural and synthetic sources.
Caffeine
Caffeine is a substance that occurs naturally in more than 60 plants including
coffee beans, tealeaves, kola nuts and cacao beans. In some cases, small
amounts of caffeine are added to soft drinks as part of the flavor profile. The
amount of caffeine in a soft drink is only a fraction of that found in an equal
amount of coffee or tea.
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Caffeine has a classic bitter taste that enhances other flavors. It has been part
of almost every cola-and pepper-type beverage since they were first
formulated more than 100 years ago and has been enjoyed in coffee, tea and
chocolate beverages for centuries.
Even though some people feel the effects of caffeine are harmful, scientific
research has refuted these claims. The long history of caffeines use
confirms that it is safe when consumed in moderation. For people who wish
to restrict their caffeine, many caffeine-free soft drinks are available.
Acidulates
Similar to fruit juices and many other food products, most soft drinks are
slightly acidic. Acidulates add a pleasant tartness to soft drinks and act as
preservative. Some soft drinks contain a small amount of one or two
common foods acidulates phosphoric acid and citric acid occasionally,
other acidulates such as malic acid or tartaric acid are also used.
Preservatives
Soft drinks do not normally spoil because of their acidity and carbonation.
However, storage conditions and storage time can sometimes impact taste
and flavor. For this reason, some soft drinks contain small amounts of
preservatives that are commonly used in many foods.
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Potassium
Potassium is another essential nutrient found many natural and man-made
food ingredients. Like sodium, potassium exists naturally in drinking water
and, therefore, soft drinks. Small amounts of potassium are also found in
some of the flavoring agents and other ingredients used in soft drinks.
Sodium
Because the names soda pop, soda water was associated with early soft
drinks, many people falsely believe that carbonated beverages contain
significant amounts of sodium. This is not true.
Sodium, in the form of various salts, is present in many natural and man-
made compounds. It is an essential mineral nutrient responsible for
regulating and transferring body fluids, as well as other important body
functions. Although an adequate daily intake of sodium is necessary for
good healthy, excessive consumption has been tied to high blood pressure in
some people.
Soft drinks are not significant sources of sodium in the diet. In fact, the local
drinking water supply used in making soft drinks contributes most or all of
the sodium. Small amounts of sodium in some soft drinks can also come
from other ingredients.
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Soft drinks are classified by FDA as low or very low sodium foods.
Even people who are advised to restrict their intake of sodium by their
doctor can usually drink and enjoy soft drinks with their doctors approval.
Sodium-free soft drinks are available.
Sweeteners
Non-Diet Soft Drinks
Most regular (non-diet) soft drinks are sweetened with sucrose or high
fructose corn syrup, (HFCS0). A mixture of these sweeteners may also be
form sugarcane or sugar beets. HFCS is a newer and more convenient liquid
sweetener, similar to sucrose but made from corn. It is now use in many
prepared foods.
With either, the amount of sweetener in a soft drink ranges from 7 to 14%,about the same amount as a glass of pineapple or orange juice. Both sucrose
and HFCS are easily digested carbohydrates, and carbohydrates are an
important part of the diet. They provide calories, which are the source of
energy for the body.
Sometimes thought to be more fattening than other foods sugar actually
contains the same number of calories by weight as protein (4 calories/gram),
and less than half the calories of fat (9 calories/gram). Sugars also contain
far fewer calories than alcohol (7 calories/gram).
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Diet Soft Drinks
The popular class of beverages known as diet soft drinks is made possible by
the intensely sweet substances we refer to as diet or low calorie
sweeteners. Aspartame, saccharin, sucralose and a casual fame K are
approved for use in soft drinks today and sweeteners remains an active area
of food research. By choosing from a variety of different sweeteners,
manufacturers can blend sweeteners to match beverage formulations and
better appeal to all consumer tastes and preferences.
Aspartame
After many years of scientific testing, aspartame was first approved for use
in some foods in 1981, and for soft drinks in 1983. it has been reviewed and
approved, not only by the U.S. Food and Drug Administration (FDA), but
also by the governments of more than 60 countries and the World HealthOrganization.
Aspartame is a nutritive sweetener, meaning it is easily digested and
provides calories. However, its sweetening power is so great that the tiny
amount needed to sweeten a soft drink adds less than one caloric per 12-
ounce can.
Soft drink companies use slightly different amounts of aspartame in various
flavor recipes. Most diet soft drinks are sweetened with aspartame alone, but
some may contain a blend of aspartame and saccharin. If aspartame is the
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only sweetener used, about 15 milligrams per ounce of beverage is added.
As other diet sweeteners become available, more sweetener blends are likely
to be used.
Saccharin
Saccharin has many desirable properties that make it a valuable food
ingredient. It is extremely sweet about 300 times sweeter than sugar and
contributes no calories. It is stable in foods and is metabolically inert, which
means that it goes through the body without changing. Finally, it is relatively
inexpensive.
Because of some concerns raised in the late 1970s, labels formally were
required on all products containing saccharin. It is now generally accepted
by academic scientists, the federal governments National Toxicology
Program and various international health organizations that there is no riskin consuming saccharin. The many years of saccharin use demonstrate not
only its popularity with soft drink manufacturers, but also with consumers.
Acesulfame k
Acesulfame K, under the brand name of Sunnett, is an example of a new
diet sweetener approved for soft drinks by the FDA in 1998. Acesulfame Kis a calorie free, heat stable sweetener that is 200 times sweeter than sugar.
Sucralose
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Sucralose was approved by the FDA in 1998 for use in a wide variety of
food products including soft drinks. Sucralose is a low calorie, high-intensity
sweetener that is about 600 times sweeter than sugar. It is sold under the
brand name of Splenda Sucralose and sucrose (sugar) have been shown to
have similar taste and flavor profiles.
A number of other fascinating low-calorie sweeteners are currently
undergoing safety evaluations for future use. These include all-time, a
compound similar to aspartame that is remarkably 2,000 times sweeter than
sucrose and various naturally occurring plant derivatives, such as stevia and
thaumatin.
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CHAPTER NO. 3
ABOUT THE INDUSTRY
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OVERVIEW OF THE INDUSTRY
The beverage market is worth $55 billion worldwide. The tides are turning
for many beverage categories. While the carbonated soft drink and beer
categories are merely treading water with flat sales, the energy drink
category is surging ahead like never before.
Bottled water, ready-to-drink coffee, ready-to-drink tea and sports drinks
follow close behind with substantial sales increase- drinks without added
sugar, no beer, along with developments in juice drinks and dairy-based
drinks, are helping to turn around sales in these categories. What follows is a
category-by-category look at the state of the beverage industry, including the
top brands, new products, innovations and future trendsetters.
In order to be successful in the marketplace, one has to think in terms of
health innovation, flavor innovation, ingredient innovation and specific agegroups. These are the factors that will shape the future of the beverage
industry.
Todays consumers are concerned with overall health and wellness. As a
result, there is significant impact on food and beverage purchases. Many
studies have shown that consumers are as concerned with good health as
they are about maintaining a high quality of life.
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Do you know what type of new beverage consumers are most likely to try?
Do you know where they are most likely to pick those products up? Do you
know why?
Beverage Industry wanted to know the answers to these questions and to
delve deeper into the ever-increasing number of new product launches in the
beverage market. The soft drink industry is training people to seek out new
products, even the big guys are coming out with limited-edition flavors, and
consumers are beginning to see that there is more flavor activity going on in
the category. Whether that really nets anybody any sales gains is another
thing, but it is teaching consumers to seek out and try new products. Its also
trying to create some excitement there.
In spite of several challenges and restrictions faced by this industry, it is a
roll like never before. Customer preferences may have shifted, but they are
still always on the look out for a can of coke or a new flavored drink to
quench their thirst.
INDIAN BEVERAGE MARKET
The size of the Indian food processing industry is around $ 65.6 billion,
including $20.6 billion of value added products. Of this, the health beverage
industry is valued at $230 million; bread and biscuits at $1.7 billion;
chocolates at $73 million and ice creams at $188 million.
The size of the semi-processed/ready-to-eat food segment is over $1.1
billion. Large biscuits & confectionery units, Soya processing units and
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Source: Euromonitor International 2009
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STUDY OF GROWTH OF SOFT DRINK MARKET
SOFT DRINKS
Carbonated drinks are dominated by artificial flavors based on cola, orange
and lime with Pepsi and coca-cola dominating the market. The entire part of
the drink is based on its artificial flavors and sweetening agents as no natural
juice is used.
Soft Drinks in India industry profile provide top-line qualitative and
quantitative summary information including: market size (value, and
forecast to 5). The profile also contains descriptions of the leading players
including key financial metrics and analysis of competitive pressures within
the market. Essential resource for top-line data and analysis covering the
India soft drinks market includes market size data, textual and graphical
analysis of market growth trends, leading companies and macroeconomic
information.
Highlights
The soft drinks market consists of retail sale of bottled water, carbonates,
concentrates, functional drinks, juices, RTD tea and coffee, and smoothies.
However, the total market volume for soft drinks market excludes the
concentrates category. The market is valued according to retail selling price
(RSP) and includes any applicable taxes. Any currency conversions used in
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the creation of this report have been calculated using constant 2010 annual
average exchange rates.
The Indian soft drinks market generated total revenues of $3.8 billion in
2010, representing a compound annual growth rate (CAGR) of 11% for the
period spanning 2006-2010.
Carbonates sales proved the most lucrative for the Indian soft drinks market
in 2010, generating total revenues of $1.9 billion, equivalent to 50.5% of the
market's overall value.
The performance of the market is forecast to decelerate, with an anticipated
CAGR of 9.1% for the five-year period 2010-2015, which is expected to
lead the market to a value of $5.9 billion by the end of 2015.
Soft and Aerated Drinks
The 50-bn-rupee soft drink industry is growing now at 6 to 7% annually. In
India, Coke and Pepsi have a combined market share of around 95% directly
or through franchisees. Campa Cola has a 1% share, and the rest is divided
among local players. Industry watchers say, fake products also account for a
good share of the balance. There are about 110 soft drink producing units
(60% being owned by Indian bottlers) in the country, employing about
125,000 people. There are two distinct segments of the market, cola and
non-cola drinks. The cola segment claims a share of 62%, while the non-cola
segment includes soda, clear lime, cloudy lime and drinks with orange and
mango flavours.
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The per capita consumption of soft drinks in India is around 5 to 6 bottles
(same as Nepal's) compared to Pakistan's 17 bottles, Sri Lanka's 21,
Thailand's 73, the Philippines 173 and Mexico 605. The industry contributes
over Rs 12 bn to the exchequer and exports goods worth Rs 2 bn. It also
supports growth of industries like glass, refrigeration, transportation, paper
and sugar.
The Department of Food Processing Industries had stipulated that 'contains-
no-fruit-juice' labels be pasted on returnable glass bottles. About 85% of the
soft drinks are currently sold in returnable bottles. There was a floating stock
of about 1000 mn bottles valued at Rs 6 bn. If the industry were to abide by
the new guidelines, it would have to invest in new bottles, resulting in a cost
outgo of Rs 5 bn. Neither Coke nor Pepsi is in a position to invest such a
large amount.
Around 400,000 tonnes of raw material would be required to replace the
existing stock of bottles. Instead, the soft drink industry suggested that a
seven-year moratorium be extended to the industry so that it can incorporate
the change in a phased manner. There is no such mandatory requirement
anywhere in the world to specifically label the glass surface of returnable
bottles. The government has decided to extend the date for replacing
the bottles to end-march 2006. In the meantime, the producers have shifted
substantially to the use of PET bottles.
Soft and aerated drinks were considered products for the middle class and
the affluent. That segregation is no more valid. Soft and aerated drinks are
consumed by all except those who cannot afford to buy any drink. An
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NCAER study says that 91% soft drink sales are made to the lower, middle
and upper middle classes. The soft drink industry has been urging the
government to categorise aerated waters (soft drinks) equitably with other
consumer products of mass consumption and remove special excise duty.
The industry estimates that the beverage market should grow at twice the
rate of GDP growth. The Indian market should have, therefore, grown by
atleast 12%. However, it has been growing at a rate of about 6%. In contrast,
the Chinese market grew by 16% a year, while the Russian market expanded
at almost four times the rate of growth of the Indian market.
It may be recalled that Coca-Cola, the world's number one player, was
present in India for a long time in collaboration with an Indian producer but
was thrown out in the late 1970s. It reappeared in India following the
economic liberalization era - but after its rival, world's number two, had
already entered in a big way following a long and tough fight against
the opposition from the domestic producers. When Coca-Cola re-entered, it
installed a new milestone. It acquired the well flourishing India's top player,
Parle. Since then it is basically a fight between the two American giants.
Others are playing a peripheral role, as adjuncts to the two MNCs.
World's third biggest player, Cadbury Schweppes, had also made an
entry but was gobbled up by Coca-Cola. When Coca-Cola acquired Parle
brands, it was, in fact, buying the bottling facilities, the marketing network,
and the established consumer preference during the market build-up. The
brands were a drag on the global brand. Since Coca-Cola was not interested
in brands (like Thumps Up), it did not promote them.
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The result, at least, in the short run was a loss of the market to the
competitor. Coca-Cola decided to market more effectively the Parle brands.
It had in its armoury Coke, Thumps Up, Limca and Fanta. The latest to enter
market was Parles erstwhile Rimzim, alongside Portello, a black currant
flavoured drink, very popular in Srilanka.
Coca-Cola operates through 35 plants and 16 franchisees throughout the
country, while PepsiCo has 20 plants, but it has 7 more franchisees at 23 to
16 of its rival. Coca-Cola claims a market share of 51%, while Pepsi has a
share of 46%. The claims, however, remain disputed. The other smaller
players like Pure Drinks Ltd claim the rest of the market.
The shares of the two lead players are consolidated figures, which include
the respective bottlers. Coca-Cola had approached the government for a five
year extension for divesting 49% equity in its bottling subsidiary, Hindustan
Coca-Cola Holdings. It had set up the marketing subsidiary as part of its
strategy to integrate all its bottling operations, both company-owned and
franchisee bottlers, apparently keeping in line with its global policy. All
together, it had bought initially over 38 franchisee bottlers.
Kandhari Beverages, coke bottlers for north have been eyeing to lift a stake
in Coca-Cola India. Coca-Cola had filed an application to offload 49% stake
of its bottling operations in favour of their Indian operators. Besides
Kandhari, three other bottlers, one each from Uttar Pradesh, Gujarat and
Jammu, were lined up to invest in Hindustan Coca-Cola Holding. Kandhari
has already invested Rs 300 mn in 1999 and 2000 to upgrade its capacity.
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The total investment by all the four was expected to be Rs 1000 mn. Both
Coca-Cola and PepsiCo planned for the launch of lemon-flavored versions
of their products. Both have been expanding their non-carbonated drink
line-ups, as consumers seem to be shifting away from carbonated soft drinks.
PepsiCo is deliberating whether to come out with Pepsi Twist, a cola mixed
with lemon. But while both companies have juice sports drinks, bottled
water and other such drinks in their line-ups, neither coke nor Pepsi has
launched a new national variety of a cola-flavoured carbonated soft drink in
years.
PepsiCo had achieved Rs 3 bn worth of exports, which include processed
foods, basmati rice, guar gum and soft drinks concentrate. PepsiCo
completed the second phase of its expansion and with this expansion,
PepsiCo was to explore the possibility of expanding the export of
concentrates to more countries in addition to the exports to Russia and other
South Asian countries.
Pepsi India has entered into a marketing tie up with Hindustan Lever to
promote sales of soft drinks through Pepsi-HLL network of vending
machines and fountains. The major soft drink brand in the Pepsi stable are
Pepsi, 7UP, Mirinda, Tropicana and Acquafina.
As a major strategic departure, both MNCs were expanding their brand
range. Consequent to some diversifying moves, at present, the sales ratio of
Coca-Cola between soft drinks and other beverages is 95.5. The company
intended to change this to 80:20 in the next three years. Its juice
brand, Maaza - acquired from Parle a few years ago - is being given a major
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thrust. It has plans to go in for canned coffee, iced tea and
purified categories under expansion schemes. It has already launched its
bottled water brand, Kinley, in the Indian market. Besides, it is intending to
acquire domestic brands in the non-carbonated beverages segment.
The global deal between Coca-Cola and P&G to form a snacks and
beverages joint venture company was reported to have slipped into rough
weather. The P&G brand of potato wafer, Pringles, seemed to be faced with
distribution problems in India. P&G had globally tied up with Coca-Cola to
form a stand-alone juice and snacks company. The new firm is focused on
developing and marketing new juices, juice based beverages and snacks on a
global basis.
The Sharjah-based Allied Beverages was pushing its Ahlan brand in India,
having entered the market in mid-2000. Its target was carbonated drinks
market in PET bottles. Its plans were to launch a PET bottle in the popular
300 ml category. Ahlan expected to gain a 12% share of the total PET bottle
market in northern India. Of the total market, PET bottle segment is
approximately 12%. Presently, Allied Beverages has a manufacturing unit
at Dharuhera in Haryana.
The product range includes carbonated drinks - cola, orange, lemon and soda
in three pack sizes - 500 ml, 1500 ml and 2000 ml. Allied Beverages sells
non-carbonated drinks in 200 ml food grade cups priced at Rs 7 in its
portfolio, available in four different flavours. The company's future plans
include pulp-based fruit drinks in flavours, which will be available in 200 ml
non-returnable glass bottles.
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CHAPTER NO. 4
COMPANY PROFILE
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COMPANY PROFILE
COCA-COLA
Coca-Cola was created in 1886 by John S Pemberton, a pharmacist in
Atlanta, Georgia, who sold the syrup mixed with fountain water as a potion
for mental and physical disorders. The formula changed hands three more
times before Asa D. Candler added carbonation and by 2003, Coca-Cola was
the worlds largest manufacturer, marketer, and distributor of nonalcoholic
beverage concentrates and syrups, with more than 500 widely recognized
beverage brands in its portfolio.
With the bubbles making the difference, Coca-Cola was registered as a
trademark in 1887 and by 1895, was being sold in every state and territory in
the United States. In 1899, it franchised its bottling operations in the U.S.,
growing quickly to reach 370 franchisees by 1910. Headquartered in Atlanta
with divisions and local operations in over 200 countries worldwide, Coca-
Cola generated more than 70% of its income outside the United States by
2003.
INTERNATIONAL EXPANSION
Cokes first international bottling plants opened in 1906 in Canada, Cuba,
and Panama. By the end of the 1920s Coca-Cola was bottled in twenty-
seven countries throughout the world and available in fifty-one more. In
spite of this reach, volume was low, quality inconsistent, and effective
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advertising a challenge with language, culture, and government regulation
all serving as barriers. Former CEO Robert Woodruffs insistence that Coca-
Cola wouldnt suffer the stigma of being an intrusive American product,
and instead would use local bottles, caps, machinery, trucks, and personnel
contributed to Cokes challenges as well with a lack of standard processes
and training degrading quality.
Coca-Cola continued working for over 80 years on Woodruffs goal: to
make Coke available wherever and whenever consumers wanted it, in
arms reach of desire. The Second World War proved to be the stimulus
Coca-Cola needed to build effective capabilities around the world and
achieve dominant global market share. Woodruffs patriotic commitment
that every man in uniform gets a bottle of Coca-Cola for five cents,
wherever he is and at whatever cost to our company was more than just
great public relations. As a result of Cokes status as a military supplier,
Coca-Cola was exempt from sugar rationing and also received government
subsidies to build bottling plants around the world.
TURN OF THE CENTURY GROWTH IMPERATIVE
The 1990s brought a slowdown in sales growth for the Carbonated Soft
Drink (CSD) industry in the United States, achieving only 0.2% growth by
2000 (just under 10 billion cases) in contrast to the 5-7% annual growthexperienced during the 1980s. While per capita consumption throughout the
world was a fraction of the United States, major beverage companies
clearly had to look elsewhere for the growth their shareholders demanded.
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The looming opportunity for twenty-first century was in the worlds
developing markets with their rapidly growing middle class populations.
THE WORLDS MOST POWERFUL BRAND
Interbrands Global Brand Scorecard for 2003 ranked Coca-Cola the #1
Brand in the World and estimated its brand value at $70.45 billion. The
rankings methodology determined a brands valuation on the basis of how
much it was likely to earn in the future, distilling the percentage of revenues
that could be credited to the brand, and assessing the brands strength to
determine the risk of future earnings forecasts. Considerations included
market leadership, stability, and global reach, incorporating its ability to
cross both geographical and cultural borders.
From the beginning, Coke understood the importance of branding and the
creation of a distinct personality. Its catchy, well-liked slogans (Its the real
thing (1942, 1969), Things go better with Coke (1963), Coke is it
(1982), Cant beat the Feeling (1987), and a 1992 return to Cant beat the
real thing) linked that personality to the core values of each generation and
established Coke as the authentic, relevant, and trusted refreshment of
choice across the decades and around the globe.
PATENTS, COPYRIGHTS, TRADE SECRETS AND TRADEMARKS
Company owns numerous patents, copyrights and trade secrets, as well as
substantial know-how and technology, which we collectively refer to as
technology. This technology generally relates to Companys products and
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the processes for their production; the packages used for products; the design
and operation of various processes and equipment used in business; and
certain quality assurance software. Some of the technology is licensed to
suppliers and other parties. Companys sparkling beverage and other
beverage formulae are among the important trade secrets of Company.
Company own numerous trademarks that are very important to business.
Depending upon the jurisdiction, trademarks are valid as long as they are in
use and/or their registrations are properly maintained. Pursuant to
companys bottlers agreements, company authorize bottlers to use
applicable Company trademarks in connection with their manufacture, sale
and distribution of Company products. In addition, we grant licenses to third
parties from time to time to use certain of companys trademarks in
conjunction with certain merchandise and food products.
EMPLOYEES
Company refer to its employees as associates. As of December 31, 2009
and 2008, Company had approximately 92,800 and 92,400 associates,
respectively, of which approximately 17,900 and 16,500, respectively, were
employed by consolidated variable interest entities (VIEs). The increase
in the total number of associates in 2009 was primarily due to an increase in
the Latin America operating group driven by its finished product business,as well as an increase in the Bottling Investments operating group.
These increases were partially offset by the impact of the Companys
ongoing productivity initiatives. As of December 31, 2009 and 2008,
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Company had approximately 11,700 and 13,000 associates, respectively,
located in the United States, including Puerto Rico, of which approximately
190 and 90, respectively, were employed by consolidated VIEs.
Coca cola Company, through its divisions and subsidiaries, has entered into
numerous collective bargaining agreements. Company currently expect that
it will be able to renegotiate such agreements on satisfactory terms when
they expire. The Company believes that its relations with its associates are
generally satisfactory.
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PEPSICO
PepsiCo is a world leader in convenient foods and beverages, with revenues
of about $27 billion and over 147,000 employees. The company consists of
the snack business of Frito-Lay North America and the beverage and food
businesses of PepsiCo Beverages and Foods, which includes PepsiCo
Beverages North America (Pepsi-Cola North America and
Gatorade/Tropicana North America0 and Quaker Foods North America.
PepsiCo International includes the snack businesses of Frito-LayInternational and beverage businesses of PepsiCo Beverages International.
Pepsi Co brands are available in nearly 200 countries and territories.
Many of PepsiCos brand names are over 100-Years old, but the corporation
is relatively young. PepsiCo was founded in 1965 through the merger of
Pepsi-Cola and Frito-Lay. Tropicana was acquired in 1998 and PepsiCo
merged with the Quaker Oats Comp0any, including Gatorade, in 2001.
PepsiCos success is the result of superior products, high standards of
performance, distinctive competitive strategies and the high integrity of our
people.
Our mission is to be the worlds premier consumer Products Company
focused on convenient foods and beverages. We seek to produce healthy
financial rewards to investors as we provide opportunities for growth and
enrichment to our employees, our business partners and the communities in
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which we operate. And in everything we do, we strive for honesty, fairness
and integrity.
PepsiCos beverage business was founded at the turn of the century by Caleb
Bradham, a New Bern, North Carolina druggist, who first formulated Pepsi
Cola. Today consumers spend about $33 billion on Pepsi-Cola beverages.
Brand Pepsi and other Pepsi-Cola products including Diet Pepsi, Pepsi-
One, Mountain Dew, Slice, Sierra Mist and Mug Brands- account for nearly
one-third of total soft drink sales in the United States, a consumer market
totaling about #60 billion.
Peps-Cola also offers a variety of non-carbonated beverages, including
Aquafina bottled water, Fruit works and all Sport. In 1992 Pepsi-Cola
formed a partnership with Tomas J. Lipton Co. today Lipton is the biggest
selling ready-to drink tea brand in the United States. Pepsi-Cola also markets
Frappuccino ready-to drink coffee through a partnership with Starbucks.
In 2001 so be became a part of Pepsi-Cola. So be manufactures and markets
an innovative line to beverages including fruit blends, energy drinks, dairy-
based drinks, exotic teas and other beverages with herbal ingredients.
Outside the United States, Pepsi-Cola soft drink operations include the
business of Seven-Up International. Pepsi-Cola beverages are available in
about 160 countries and territories.
Pepsi-Cola began selling its products internationally in 1934 with its
operations in Canada. Operations grew rapidly beginning in the 1950s. In
addition to brands marketed in the United States, major products include
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Mirinda and Pepsi-Cola North America includes the United States and
Canada. Key international markets include Argentina, Brazil, China, India,
Mexico, Philippines, Saudi Arabia, Spain, Thailand and the United
Kingdom. Pepsi-Co Beverages International also produces, sells and
distributes Gatorade sports drinks as well as Tropicana and other juices
internationally.
Pepsi-Cola provides advertising, marketing, sales and promotional support
to Pepsi-Cola bottlers and food service customers. This New advertising and
exciting promotions keep Pepsi-Cola brands young. The company
manufactures and sells soft drink concentrate to Pepsi-Cola bottlers. The
company also provides fountain beverage products.
SHAREHOLDERS
PepsiCo (symbol: PEP) shares are traded principally on the New York Stock
Exchange in the United States. The company is also listed on the
Amsterdam, Chicago, Swiss and Tokyo stock exchanges. PepsiCo has
consistently paid cash dividends since the corporation was founded.
CORPORATE CITIZENSHIP
PepsiCo believes that as a corporate citizen, it has a responsibility to
contribute to the quality of life in our communities. This philosophy is put
into action through support of social agencies, projects and programmes.
The scope of this support is extensive ranging form sponsorship of local
programs and support of employee volunteer activities, to contributions of
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time, talent and funds to programs of national impact. Each division is
responsible for its own giving program. Corporate giving is focused on
giving where PepsiCo employees volunteer.
PEPSICO HEADQUARTERS
PepsiCo World Headquarters is located in Purchase, New York,
approximately 45 minutes from New York City. The seven building
headquarters complex was designed by Edward Durrell Stone, one of
Americas foremost architects. The building occupies 10 acres of a 144
acre complex that includes the Donate M. Kendall Sculpture Gardens, a
world acclaimed sculpture collection in a garden setting.
The collection of works is focused on major twentieth century art, and
features works by masters such as Auguste Rodin, Henri Laurens, Henry
Moore, Alexander Calder, Alberto Giacometti, Arnaldo Pomodoro and Class
Olden berg. The gardens were originally designed by the world famous
garden planner, Russelll Page, and have been extended by Francois Goffinet.
The grounds are open to the public, and a visitors booth is in operation
during the spring and summer.
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PARLE AGRO
Parle Agro is an Indian private limited company. It owns the brands like
Frooti, Appy, LMN, Hippo and Bailley. Parle Products was founded in 1929
in British India. It was owned by the Chauhan family of Vile Parle, Mumbai.
The Parle brand became well known in India following the success of
products such as the Parle-G biscuits and the Thums Up soft drink.
The original Parle company was split into three separate companies, owned
by the different factions of the original Chauhan family:
Parle Products, led by Vijay, Sharad and Anup Chauhan (owner of the
brands Parle-G, Melody, Mango Bite, Poppins, Monaco and
KrackJack)
Parle Agro, led by Prakash Chauhan and his daughters Schauna,
Alisha and Nadia (owner of the brands such as Frooti and Appy)
Parle Bisleri, led by Ramesh Chauhan
All three companies continue to use the family trademark name "Parle".
Parle Agro commenced operations in 1984. It started with beverages, and
later diversified into bottled water (1993), plastic packaging (1996) and
confectionary (2007). Frooti, the first product rolled out of Parle Agro in
1985, became the largest selling mango drink in India.
The original Parle group was amicably segregated into three non-competing
businesses. But a dispute over the use of "Parle" brand arose, when Parle
Agro diversified into the confectionary business, thus becoming a
competitor to Parle Products. In February 2008, Parle Products sued Parle
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Agro for using the brand Parle for competing confectionary products. Later,
Parle Agro launched its confectionery products under a new design which
did not include the Parle brand name.
In 2009, the Bombay High Court ruled that Parle Agro can sell its
confectionery brands under the brand name "Parle" or "Parle Confi" on
condition that it clearly specifies that its products belong to a separate
company, which has no relationship with Parle Products.
BRANDS
Parle Agro Pvt. Ltd operates under three major business verticals:
Beverages fruit drinks, nectars, juice, sparkling drinks
Water packaged drinking water
Foods confectionery, snacks
Parle Agro also diversified into production of PET preforms (semi-finished
bottles) in 1996. Its customers include companies in the beverages, edible
oil, confectionery and pharmaceutical segments.
BEVERAGES
Frooti
Launched in 1985, Frooti was India's only beverage sold in a Tetra Pak
packaging at the time. It went on to became the largest selling Mango drink
in the country.
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Appy
Appy Classic was launched in 1986 as apple nectar and originally available
in a white tetra pack with an apple and leaf graphic. As of 2011, it comes in
black tetra packaging. It was the first apple nectar to be launched in India.
Appy Fizz
Launched in 2005, Appy Fizz is Indias first sparkling apple drink available
in a champagne shaped PET bottle.
Saint Juice
Launched in 2008, Saint Juice is available in three variants Orange, Mixed
fruit, Grape and Apple. At the time of its launch, its USP was "100% juice
with no added color, sugar or preservatives".
LMN
LMN was launched in March 2009, as non-carbonated lemon drink (nimbu
paani or lemonade).
Grappo Fizz
Launched in 2008, Grappo Fizz is a sparkling grape juice drink. Credited
with creating the sparkling fruit drinks category in India, Grappo Fizz is
along the lines of existing product Appy Fizz.
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WATER
Bailley, packaged drinking water
FOOD
Confectionary
Mintrox mints (launched in 2008), hard mint candy available in 2
flavors.
Buttercup candies (launched in 2008), hard boiled candy; it is targeted
at kids and adults alike.
Buttercup Softease, a toffee available in 4 flavors.
Softease Mithai, a toffee available in 3 flavors.
Snacks
Hippo (launched in 2009), baked snack available in seven flavors.
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CHAPTER NO. 5
PLAYERS IN MANGO DRINKS
SEGMENT
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PLAYERS IN MANGO DRINKS SEGMENT
FROOTI
Mango - Indias national and most premium fruit was a virtually untapped
segment until the year 1985, which saw the launch of Frooti Mango in
a trendy convenient tetra-pack. Frooti Mango is Parle Agros flagship
brand and Indias leading fruit drink with an 85% market share. Now,
Frooti also comes in PET bottle packing. Frooti is like an Indian
ambassador and is a hot favourite not only in India but all across the
world.
Frooti is the first tetra pack fruit juice in India. Launched in 1984, Frooti still
holds a dominant position in the Rs300 crore tetra pack fruit juice (TFJ)
market. Frooti over these years have carved out a niche for itself in the
market. Frooti instantly caught the fancy of Indian consumer with its
tetra pack and some smart campaigns. Initially the drink was positionedas a kids drink. The product was perceived as a healthy fruit drink by
the mothers. So within a short span of time, the brand was an
alternative to the unhealthy colas. The tetra pack had other benefits
also. Fruit juice is a perishable product and tetra pack have extended
the shelf life of Frooti because tetra packs have 2 layers of paper and a
plastic coating that ensured tamper proof and enhanced shelf life.
Lured by the success of Frooti, there were a lot of new launches in the TFJ
market. Players like Godrej with Jumpin; kissan etc tried their luck in
this market but failed to dislodge Frooti. Frooti was positioned as a
mango drink that is Fresh-n-juicy For over 7 years, the company
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promoted the product using that famous baseline. The product has tried
to create excitement in the market through a series of new variants and
packing. But in late nineties the brand was facing stagnated sales. The
company tried to excite the market with an orange and pineapple
variant but both the variant bombed. They came with the experiment in
packaging.
The YO! Frooti variant came with a slim paper can aimed at the
college going youth. Worried by the stagnating sales, Parle tried to
reposition the brand to appeal to youth aged between 16-21 years. The
positioning changed to be more fun based. The package also changed.
The old green color of the bottle changed to brighter mango color with
lot of graphics added to it.
One of the most famous marketing campaigns India has witnessed took
place during the repositioning. The campaign is the famous Digen
Verma campaign. This campaign was considered as one of the most
successful teaser campaigns in India. The campaign lasted for 15 days
started in February 2001. The campaign was about a faceless person
Digen Verma. There were posters and outdoors all across the markets
that had messages like Who is Digen verma Digen Verma was here
etc. This created lot of excitement in the market and Digen Verma
became the most talked about faceless name at that time. The
campaign was executed by Everest communication. But the campaign
was not followed up and the hype was not translated to long term brand
building.
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Frooti is basically a nectar based drink so it is not 100% fruit juice, it also
has some preservatives added to increase the shelf life. Although Frooti
did not face much competition in the category it created, competition
came from a slightly different category, 100% fruit juices. Parle saw
the emergence of the 100% fruit drink market and launched Njoy
brand but it did not clicked. Parle could have extended Frooti to this
market also.
The brand Real from Dabur is the main player in this category. Real
effectively positioned itself as a premium healthy drink for adults.
Frooti was not able to appeal to adults and was considered as a mango
drink while Real is not restricted to any flavour. Frooti also changed its
positioning statement from Fresh-N-juicy to Juice Up your life
which has not clicked with the customers.
Although Frooti enjoys a commanding (75%) market share, Frooti is facing
stagnation. May be some serious steps should be taken to increase the
usage of the product. The launch of PET bottle Frooti is a step in this
direction. Recently Frooti also launched a Green mango variant just
to create some hype in the market. Frooti may have to reposition itself
again to appeal to cola drinkers.
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MAAZA
Maaza is a Coca-Cola fruit drink brand marketed in India and Bangladesh,
the most popular drink being the mango variety so much that over the years,
the Maaza brand has become synonymous with Mango. Initially Coca-Cola
had also launched Maaza in orange and pineapple variants, but these variants
were subsequently dropped. Coca-Cola has recently re-launched these
variants again in the Indian market.
Mango drinks currently account for 90% of the fruit juice market in India.
Maaza currently dominates the fruit drink category and competes with
Pepsi's Slice brand of mango drink and Fr