After Juices, Fresca Now Eyes the Indian Snacks Market
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Spread across 1.421 million km square, North India produces a variety of seasonal fruits & vegetables. Individuals residing in these regions are bound through their love for food and drinks despite coming from distinct backgrounds and purchasing power parity, with different preference and taste. People with a little more money prefer to buy premium products; others prefer to consume what suits their pocket.
This population makes up for a major target audience for brands like Fresca – a homegrown beverage maker with a strong footprint in tier-2 and tier-3 cities of North India. At present, the Indian packaged juices market is valued at INR 1,100 crore (US$200 million) and is projected to grow at a CAGR of 15 per cent over the next three years.
Subcategorized as fruit drinks, juices and nectar drinks, the packaged juices market has witnessed an upward curve as the health-conscious consumers are shifting from fruit-based drinks to fruit juices. Besides the likes of Frooti, Maaza, Minute Maid, Slice and Appy, Fresca too is growing its presence in the country.
Let’s Talk Fresca
The journey started back in 2004 with the launch Shri Bankey Behari Foods – the company manufactured fresh lime water with 48 hours of shelf life for various Airlines. At the time, people were getting interested in consuming packaged drinks but the products were not reaching everyone due to their low-shelf life.
Akhil Gupta, the Managing Director and Founder of Fresca Juices, was able to identify this demand and supply gap in the juices and packaged fruit drinks market. To address the issue, he launched Fresca in 2010 with the mission to foster dynamically progressive manufacturing of beverage and allied products.
Offering 11 flavours already, Fresca recently ventured into the carbonated fruit drink space under a newly created sub-brand, called Fruzo. It produces drinks in four flavours - apple, nimbu masala, mojito and jeera. All the new products are accommodated within their production capacity of 2 lakh litre per day, which converts to six lakh individual units per day.
Fresca currently has two plants in Rai, a village and development block in Sonepat tehsil of Sonepat district in the Haryana state of India, with five production lines. It further plans to expand their production capacity for carbonated fruit drinks through contract manufacturing. The brand looks up to compete with the likes of Haldirams, Lehar, Bikano and Kurkure with its foray into the snacks market, which is expected to be completed by the year-end.
The Pan-India Aim
With the aim of having a pan-India presence by 2022, Fresca has already started spreading its root in important markets, such as Varanasi and Mumbai. The founder says that the company is currently contemplating on which model to go ahead within Mumbai – Franchise or plant ownership.
“Varanasi is a very strategic town from where you can tap the whole of East India that includes Tihar, Jharkhand, West Bengal, Chhattisgarh and Raipur along with the Eastern UP cities - Kanpur, Allahabad and Lucknow,” he said. The founder expects Fresca may start operations in central India by this year’s fourth quarter.
Fresca’s foray in the carbonated drinks segment would benefit their expansion to South India as the carbonated fruit drinks are extremely prevalent in the region. Unlike North India, the Southern region of our nation has a stronghold in modern trade outlets. Instead of shopping for groceries at the local retail store, the population prefers to visit supermarkets like Walmart, etc.
Good thing is that Fresca has already partnered with the likes of Reliance, Walmart and Aadhar for distribution in North India and replicating the model in other parts of the country shouldn’t be an issue. However, as the brand expands, it would be competing with market leaders such as Dabur, which is popularly known for Real and Real Activ juice brands that approximately captures 55 per cent of the overall market share, followed by PepsiCo with an approximate 30 per cent share.
Gupta attributes its robust distribution network as one of the biggest reasons for Fresca’s success. “For a mid-size company, long-term investments in the right technology and manpower are the key,” he asserted. Fresca has regional sales managers in every region they operate. Every week, these managers present the reports of sales to the management that looks further into the trends to devise a future plan of action.
“Most companies would not go for such big investments without getting the desired results. However, we look at our manpower as long investments that would pay dividends in the time to come,” Gupta said. “Fresca’s outlet base has increased to 1.75 lakhs, with 400-500 outlets getting added daily.".
Gupta also understands that regular technology upgrades are crucial to keep the company valuable in the everyday changing scenario. Being a fruit juice company, providing customers with the right flavour also plays a crucial role in keeping an organization on the charts. “We are very concerned that there is no compromise in the flavour of the fruit,” he said.
Fresca recently became the first brand to introduce Holographic Aseptic packaging in India. It also aims to capture two per cent market share in the nectar category and achieve 400 per cent growth in the fruit drink category in aseptic packaging. Fresca claims to have grown by 60-70 per cent and is aiming to achieve the revenue of INR 150 crore by the year-end.