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Food & beverage firms line up new products

BS Corporate Bureau

Food and beverage companies in India are all preparing for fresh launches this year, thanks to the influx of alluring imported brands which are not only creating the "new-look market", but also creating new markets.

Coca-Cola, Pepsi Foods, Hindustan Lever and Nestle, for instance, are planning to launch new products such as iced-tea, health drinks and several of their global non-carbonated beverage brands. Parle Agro last week diversified into flavoured milk with 'Enjoi', and is said to be preparing new flavours of its juice drink, Frooti. Coca-Cola's mango drink Maaza will get a facelift with new flavours this season. New snacks, chocolates, wafers and biscuits are on the way. And there's more to come, say insiders.

However, plans of new launches are not out of fear of losing market to imported goods. Instead, these companies are exulting at the thought that the market scenario is changing. Acceptability of certain products, which had less or no market presence at all, is fast increasing. And the 'premium products' are no more restricted to the Khan markets, INA or Gaffar markets in Delhi.

Says an Amul executive in Delhi, "Take cheese or fruit juices for example. These are yet to become part of the consumer's daily basket. Things have improved over the past two-three years. But we can expect favourable trends only if more and more players join the fray. Imports are most welcome."

Agrees Saswat Sengupta, chief executive (consumer division), Rai & Sons Pvt Ltd, one of the large importers of several F&B items including 'The Laughing Cow' cheese and 'Hero' jams and jellies. But what concerns him is what will happen once the novelty factor wears out. "Today consumers are picking up Berry's fruit juice or Laughing Cow cheese out of curiosity. Will this sustain," he asks. His task is to grow the market gradually. But he is worried about the price factor. In most product categories, the import duty structure is still prohibitive making the retail price 20-30 per cent higher. And India is still a price-sensitive market.

Sengupta also believes that imported products will be minuscule part of the entire F&B product portfolio, the domestic manufacturers still ruling the roost. For instance, the domestic cheese market is estimated around 7,000 tonne per annum.

"Our imports can be no match," he says, adding, "how much market we can garner, we will be able to know only after a few more months."

So, domestic manufactures are not unduly worried. Despite the fact that the Berry's, Pure & Natural and Trauben juices are widely available in the market, Tropicana Beverages (which sells Tropicana fruit juice) and Dabur (which markets Real) are hardly impacted. Says Abhay Manglik, country manager, Tropicana Beverages Company, "The focus will completely be on Tropicana juices. We will not launch Dole, or any other product from our stable in the near future."

According to a Dabur spokesperson, "There is no threat to Real from any foreign brand." The comfort comes from the fact that effective import duty on foreign juices is still around 41 per cent, as a result of which the prices at the retail-end is almost 20-30 per cent higher.

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