In the juice category, private labels from retailers have been gaining acceptance among Indian consumers as they have better value and prices compared to branded ones from Indian and multinational companies, says a report by Mintel, a global supplier of consumer, product and media intelligence.
Private label juices will also open up the category to aspiring lower-income consumers who may not be able to afford branded packaged juices. And by sourcing their raw materials locally, retailers can further bring down the prices of private labels.
Packaged juice is a relatively new phenomenon, and its per capita consumption in the country is quite low. India’s retail juice market is dominated by branded products with the top three players – Coca-Cola, Pepsi and Parle Agro – accounting for 85 per cent of the market.
Fresh juice tops
Fruit juices are not a new product in India, though they are consumed fresh either from shops or at home. In fact, fresh juice accounts for around 95 per cent of total juice consumption in India.
Ranjana Sundaresan, Food and Drink Analyst – India, Mintel, said, “Fruit juice consumption in India has seen incredible growth in the past few years, especially in urban and semi-urban areas. Until a few years ago, we had only a few branded players in the market. But now with more choice, Indian consumers have not only started to be brand-conscious but also price- and quality-conscious. Private labels offer a combination of good quality and comparatively lower prices, which has increased consumer confidence in private labels. Given how popular private labels are in Western markets, there is clearly a lot of scope for growth in this sector in India.”
Private label is still a nascent sector in India, partly because the organised retail market itself is small. Organised retail, with estimated sales of Rs 1,515 billion, accounted for only 7.2 per cent of total retail sales in 2011
Now with the Government’s nod to FDI in multi-brand retail, private labels will likely receive a bigger boost when global retailers enter India.
“Consumers can expect a wider choice of products, better value and lower prices due to the increase in competition,” Sundaresan adds.