November 14/New Delhi, India/The Economic Times -- Coca-Cola India is forming a new division dedicated to juices as it steps up focus on health beverages to offset a possible slowdown in its core fizzy drinks, as urban India begins to ride the health and wellness boom.
The new unit will scout for mergers and acquisitions in juices space and explore new business models besides entering the pure juice category, an official close to the development told The Economic Times.
The company has appointed Andriy Avramenko from its Atlanta-based global juice centre as the general manager to head the new division, the company said in an internal memo circulated last week. The Economic Times has obtained a copy of the note.
Although Coca-Cola has two juice drinks -- Maaza and Minute Maid -- the world's largest beverage maker does not sell pure juices, a category in India dominated by Dabur's Real Activ, PepsiCo's Tropicana and recent entrant Parle Agro's Saint.
The market for pure juices, which are sold as products that do not contain added sugar, color or preservatives, is estimated at Rs 250 crore and growing at 20% annually, as urban consumers start to prefer healthier drinks over aerated ones.
Until now, all functions for juices, including sales and distribution, operations and marketing, at Coca-Cola India were clubbed together with its aerated drinks, packaged water and energy and dairy-based drinks.
The development confirms what Indra Nooyi, chairman and CEO of Coca-Cola's archrival PepsiCo, told The Economic Times: "Cola wars are irrelevant."
The old cola rivals are now busy expanding their portfolio with healthier options.
Confirming the new development, a Coca-Cola India spokesperson said, "We have now constituted a dedicated juice beverages function for the India and South West Asia business unit under the leadership Andriy Avramenko."
According to the internal memo, the new GM for juice will form and lead a fully integrated cross-functional team representing functions touching the juice business from "grove to glass."
While Coca-Cola's mango juice-based drink Maaza leads the overall Rs 600-crore juices category that includes juices, nectars and fruit drinks, its Minute Maid brand has been slow-moving. The sector has been growing at 20%. Other significant players in juice drinks include Parle Agro's mainstay brand Frooti and PepsiCo's Slice.
Industry experts say companies see biggest opportunity in converting consumers from unbranded to branded juices.
Debashish Mukherjee, principal at consulting firm AT Kearney, who deals with the consumer goods and retail sector, said the diversification of portfolio in response to health and wellness trends is one reason for all this activity. However, the other key reason is to capture a larger slice of the pie. "Consumption of liquid beverage from 7 am to noon, for example, is a big gap which companies have not been able to capture," he said.
From the November 29, 2010, Prepared Foods E-dition