Chennai: A decade is a long time for a business to be taken for granted. To keep the interest alive, every business needs a real good twist. And that is precisely what Amit Burman, CEO, Dabur Foods Limited has done.
He has gone ahead and filled a gap in the company's product portfolio by launching a two-in-one fruit juice with a dual flavour under the label Real Twist.
It is true that mixed fruit drinks are available in the market. What is unique about Real Twist is that the drink distinctly gives out the taste of two fruits - first a mango flavour followed by apple, orange or pineapple depending on the flavour one opts for. The target market for this brand is the fun-loving teenager-segment, that is quite willing to experiment.
Usually health conscious, teenagers for no option apart from the fizzy carbonated drinks. And it is this segment that Dabur Foods is going out to attract.
Explaining the brand positioning, general manager, Sanjay Sharma, says, "The bulk of the fruit beverage brands are positioned as children's drinks with a doting mom being there to guide." Dabur Foods has launched its new brand and product under a new packaging and logo and has a revenue target of around Rs 75 crore in three years.
Prior to this launch, the company did not have presence in the Rs 1,200 crore fruit drink segment while it had a dominant 55 per cent market share in the fruit juices segment.
According to Burman, last fiscal the fruit-based beverage market grew by 24 per cent while the fruit juice segment grew by 18 per cent - lower than the industry's overall growth rate. Much of the growth happened in the fruit drink segment, thanks mainly to the guzzling teenagers.
So what is the difference between fruit juice and fruit drink? Broadly the fruit beverages are divided into three categories- fruit juice, fruit nectar and fruit drink. The differences lie in the percentage of the fruit pulp content in the beverage. For instance, fruit juices have a pulp content over 85 per cent, while nectar has between 20 and 85 per cent. Juice drinks have a pulp content below 20 per cent.
It is the last segment that Dabur Foods has recently entered into with its twin-taste drink. Even though mango drinks dominate 76 per cent of the market, Burman feels the new drink has a strong potential. Accordingly, the new product has the universally popular taste of mangoes as the base. The new offering comes in three variants - mango-orange, mango-apple and mango-pineapple. The product comes in three pack sizes - 200ml tetra packs priced at Rs 10; 600ml and 1200 ml pet bottles costing Rs 25 and Rs 45 respectively.
Rs 500 crore by 2010
Ever since Dabur Foods wiped out its accumulated losses of Rs 22 crore, Burman has set himself an ambitious target of reaching Rs 500 crore in three years. "It took eight years between 1997 and 2005 for the company to reach a turnover of Rs 130 crore. But in the next two years the turnover zoomed." The company closed last fiscal with a turnover of Rs 191 crore. He expects sales to notch Rs 250 crore.
"We are redefining the competitive playing field," he says about the three-year target figure. Part of the new initiative is the expanding the Real Activ range by adding soya mixed fruit juice. "Soya is an upcoming ingredient in the beverages segment," says Sharma.
What about the competition from imported brands that provide attractive offers like buy one and get one free? Answers Sharma, "Imported brands are available only in the port cities and not in land-locked interiors. Further the buy-one, get-one offer are tactics to liquidate old stocks."
The other brands owned by Dabur Foods are: Coolers (drinks made from summer fruits), Hommade (culinary pastes like ginger, garlic, tamarind, tomato puree, and coconut milk), Capsico (red pepper sauce), Lemoneez (lemon juice).
In the institutional segment, the company caters to hotels, airlines, hospitals and others. "Around Rs 50 crore is from the institutional sales," remarks Sharma.
The company has three plants – one in Nepal and two in India (Siliguri, West Bengal and Newai, Rajasthan). The 50 million litre Nepal plant gets the company a lot of tax advantages. According to Burman, the company imports fruit juice concentrates worldwide, for instance apple concentrate from Germany.
The Siliguri plant has a capacity to process 150 tonnes of fruit a day. The plant processes fruits like pineapple, litchi, guava, mango and grape round the year. The company will be centralising the packaging of Coolers brand at its Newai plant. With two plants in India, the company has derisked itself from being entirely dependent on the Nepal plant.