ITC eyes branded juice market with `B Natural' buy

Consumer goods major ITC Ltd is set to enter the branded ready-to-drink juices market with the acquisition of Bangalore-based Balan Natural Food Pvt Ltd's `B Natural' brand.

The deal, valued at Rs100-200 crore, is reported to be in the final stages and announcements to this effect are likely over the next three months, sources close to the development said.

Neither ITC, nor Balan Natural did make any comment on the news.

ITC's entry into the highly competitive juices market will pit it against established brands such as PepsiCo's 'Tropicana' and Dabur India's 'Real' fruit juice brands.

Pepsico has a 54-per cent market share in India, including the 25-30 per cent market share of its Tropicana juice brand.

Market researcher Nielsen estimates India's branded packaged juice market at Rs1,000 crore, and growing annually at 15-20 per cent.

The deal, if goes through, will be ITC's first major acquisition in the foods segment since it entered the business in 2001.

In 2002, ITC had acquired confectionery maker `Mint-O' brand from the Delhi-based Candico.

Currently, ITC's food business spans four categories - staples, snack foods, ready-to-eat foods, and confectionery that includes biscuits, aata (wheat flour) noodles, candy and chips.

ITC is in a flux as it slowly emerges a major non-cigarette FMCG company, from a pure cigarette company for most of its existence in the past century. B Natural acquisition is a major step in that direction.

ITC is eyeing a turnover of Rs15,000 crore from its non-cigarette FMCG business by 2017-18, against Rs7,000 crore in 2012-13.

ITC's non-FMCG segment revenue grew 26.5 per cent while net overall income rose 19.4 per cent to Rs29,605.6 crore.

ITC's non-cigarette business includes branded packaged foods, personal-care, lifestyle apparel, education and stationery, incense sticks and safety matches.

Balan Natural Food, founded by lawyer-turned-entrepreneur A Nanda Kumar, began production in 2004 and currently offers packaged fruit and vegetable juices in 15 flavours.

According to an ICRA report of May 2012, the company has a processing and packaging facility with an installed capacity of 80 million litres per annum in Singapura village in Bangalore.

The company reported an operating loss of Rs 2.2 crore and an operating income of Rs 65.3 crore in 2011-12, the report added.