Is Tropicana Running Out Of Juice?
The juice flagship from
PepsiCo slips 10% in three years even as Dabur's Real holds on.
In 2014, the gap between
the top two packaged juice brands in India was over 14%. An aggressive PepsiCo,
with 38.3% value market share for Tropicana in March, was expected to close in
on homegrown market leader Real over the next few years.
In three years, the second
largest player, Tropicana, appears to be running out of juice, if market share figures
from industry sources are anything to go by.
While in March 2017,
PepsiCo's flagship juice had slipped to 28.3% in value market share, in
April-June quarter it continued its fall to 25.6%, according three industry
officials quoting Nielsen MAT value share data. In contrast, Dabur's Real
maintained its lead: 56.6% in March 2017 and 53.4% in April-June quarter.
The fall for Tropicana is
for real. Though the MNC brand had some good years, marketing experts reckon
PepsiCo has lost track in establishing its hard-worked-out credentials that
placed Tropicana closest to fruit in the `2,000 crore packaged juices market in
India.
“Recent years have seen a
degree of brandneglect for sure,“ says brand strategist Harish Bijoor. In
contrast, Dabur has taken Real into the gut of the Indian market, penetrating
non-traditional markets as well. “The Real brand has really taken the
highground of the real one closest-to-fruit,“ he avers, adding that for
PepsiCo, maintaining a consistent laser-sharp focus on categories as wide as
colas, juices and snacks has been taking a toll. Each of these needs focussed
brand competence and deep investments, which seem to be missing in recent
years, and that's a telling sign.
PepsiCo, for its part,
contends that it has been witnessing strong double-digit growth for Tropicana.
“As per policy, we don't
comment on country-specific market share or analyst reports,“ said a PepsiCo
India spokesperson. The value market share data that indicates a decline is
incorrect and does not corroborate with company's estimates, the spokesperson
added in an email response.The brand has limited its offerings in the
commoditized, highly discounted and lower juice content space, points out the
spokesperson, declining to give any internal market share numbers.
However, food and beverage
experts be lieve its positioning is a clear reason for Tropicana slipping down
the ranks.
“It is very breakfast
centric whereas Real enjoys an all-day drink positioning with a wide range of
variants,“ says Jaspal Sabharwal, a food and private equity industry veteran.
Real's positioning advantage, he lets on, is at its peak because India's 440
million millennials love Ayurvedic and natural products. Over 390 million Gen-Z
have seen more of juice and green tea around them than soft drinks.
“Real derives best residual
advantage out of this demographic match,“ adds Sabharwal, pointing to another
advantage the local giant enjoys. Real's cost structure allows it to be more
aggressive than Tropicana because it has manufacturing plants in tax-incentive
zones. “Real uses this cost leverage to its advantage by pushing 200 ml packs
in institutional, hotels and airlines segment,“ he says.
Dabur attributes its
success to constant innovation with new variants.
“Dabur has the largest
range with 25 different variants of Real and Real Activ,“ says marketing head
for juices and beverages, Mayank Kumar, who declines commenting specifically on
market share numbers.The brand, he points out, has invested in sales
infrastructure to significantly enhance its reach into new geographies and town
classes with a strengthened portfolio, especially suited for such markets.
Conceding competition has
intensified in the Juices Nectars and Still Drinks (JNSD) market with the entry
of a number of regional brands and players, Kumar asserts that Dabur has
managed to stay relevant by enhancing its offerings on health, taste and
nutrition. “Dabur is the pioneer in the packaged juice market in India and
enjoys a dominant share,“ he says.
What has added to the woes
of Tropicana is the almost non-existent Western-style breakfast culture in the
country.
“India is not a breakfast
country,“ says Ashita Aggarwal, head of marketing at SP Jain Institute of
Management and Research. The reason hobbled Kellogg's and is now affecting Tropicana.
Most of India has early brunch: parantha in the north, idli in the south and
poha in the west. Cereals and juices for breakfast is a very urban, upper-class
phenomenon. She believes this may explain why McDonald's has not been able to
crack breakfast in India in spite of pushing it aggressively. New entrants such
as Paper Boat and ITC's B Natural have only added to the woes of Tropicana and
squeezed its share, she adds.
PepsiCo contends that it's
focusing on creating differentiated offerings. Take, for instance, Tropicana
Essentials, a functional juice platform featuring 100% juice with no added
sugar, which targets nutrient deficiencies in India. “The product line is
seeing a strong response from consumers in the premium, core nutrition
segment,“ the spokesperson says.
But will it be enough to
reclaim lost ground? “Perhaps not,“ says Aggarwal.“PepsiCo would need to do a
lot more to juice up the brand.“ Given Tropicana Essentials just launched this
summer, it has a long slog before a large number of consumers start actively
seeking it out.Looks like the question PepsiCo needs to be asking is `Oh Yes,
Kabhi?'.
By Rajiv Singh
ET 16aug17
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