But last month, this skirmish spilled into the public domain when in Mumbai’s western suburb, on a particularly troublesome and gridlocked stretch of the highway, stood a huge billboard. It asked Real (Dabur) and Tropicana (PepsiCo India) to abandon concentrate and join it in giving the customer real fruit in a juice box. The ad was by B Natural. A company acquired three years ago by ITC in its effort to strengthen its non-tobacco portfolio.
Following the comical exchange
What followed was a comical exchange of one-upmanship. All three exchanged barbs at each other primarily through business dailies. There was talk about taking things to court but nothing materialized.
The juice war, which has been brewing for years, has finally been declared. It is important to focus on this war particularly because of who fights it. ITC (revenue of Rs 55,000 crore as of March 2017 or $8 billion), which needs to strengthen its non-tobacco portfolio as sales of its core product slow down.
Pepsico (revenue Rs 6,540 crore as of March 2017 or $970 million) which has seen its carbonated beverage portfolio take a hit as urban youth move away and Dabur (revenue of Rs 5,357 crore or $794 million), the traditional big boy in the food and beverages category. Oh, and there is one more. Paperboat.
Seven-year-old Paperboat is a Bengaluru-based startup primarily known for its niche ethnic juices. If you’ve missed them on the shelves, the company sources concentrate that are rarely used, such as Aam Panna (sour mango), Kokam (berry) or Jamun (black plum).
How to evolve a business from the same?
It pours them into pouches and not tetra packs. At least, not at first. While the likes of Real and Tropicana sell juices at Rs 20 (~$0.3) for 200ml, Paperboat sells it at Rs 35 ($0.50) for 250ml. Paperboat differentiates itself from the crowd by being “eccentric” in its flavors, which means, so far, it has been shunning the likes of Apple and mixed fruit juice. Until 2017, it wanted to be premium, part of the elite and wanted to build a business within that.
Paperboat is, more or less, quietly distancing itself from its original thought process. It doesn’t want to be just a premium juice company anymore. It wants more. It wants to be part of the $2.2 billion packaged juice market.
The market is crowded and has a lot of competitors hawking their wares. According to strategic market research company Euromonitor, 1.8 billion liters of juice in one form or another was sold in 2017. The sector, in terms of volume sold, is expected to grow by 8% till 2022. There are international companies such as Coca-Cola and Pepsi, along with Indian companies such as Dabur, ITC, Manpasand Beverages, and Parle Agro.
What about Paperboat? Euromonitor counts Paperboat as ‘others’ in the list of companies in this juice market. Not just Paperboat, several others such as Raw Pressery. Add to that, there are more venture-funded companies that are added every day.
Paperboat wants to be a part of this industry now. For six years, it chose the fringes, but in 2017, things changed. It recorded a growth of 12% and managed to generate revenue of about Rs 70 crore (~$10 million). The company had to now go against what it was built for.
It went mainstream. It sold one-liter tetra packs of apple and mixed fruit in search of volume along with the Rs 35 offer. In December, it started to sell these mass market juices at the Rs 20 price range (just like Real and Tropicana). And in March 2018, it introduced a new sub-brand, Swing, which sells at Rs 10 ($0.15). This is Paperboat’s latest strategy. It has helped, somewhat. Neeraj Kakkar, founder, and CEO of Paperboat claims the company clocked Rs 117 crore (~17.3 million) in FY18.