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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
http://en.wikipedia.org/wiki/Parle_Productshttp://en.wikipedia.org/wiki/Frootihttp://en.wikipedia.org/wiki/Parle_Productshttp://en.wikipedia.org/wiki/Frooti


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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

pro - vishal

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