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Natural food and drink industry Essay

Executive Summary

The all natural food and drink industry is relatively new, it has emerged as part of the clean label trend and is seen as an alternative to the organic products or products labeled as “free-from”. The global all natural food and drink market has shown a steady growth during the last few years and is expected to grow due to rising demands for healthy, nutritional, natural foods and drinks without chemicals and artificial ingredients. Growing at a compound annual growth rate (CAGR) of about 35% annually, Indian non-carbonated drink market is likely to touch Rs. 54,000 crore by 2015 from the current level of Rs. 22,000 crore including fruit drinks, nectars and juices etc. Our company J-GAPS started in 2014 thereby tapping this potential in the Indian market had come up with a natural flavored drink segment in terms of coconut water with Kewra and Mint with the product named SIPCO in order to revive freshness.

This could be seen as great opportunity in Maharashtra near the Konkan region where the natural source of tender coconut could be fully utilized to provide healthy natural beverage to people. The financial assistance is catered by coconut development board in terms of 50% cost of production. The vision of our company is to provide a natural drink to the consumer so as to improve their health in a fast paced lifestyle. Identifying the gap in this market through market analysis especially in terms of coconut water wherein there are hardly tetra packs available in order to make it convenient for people to have the nutritional drink without carrying the hard husk.

The main drivers of introducing such a natural beverage includes rising consumer concerns regarding artificial ingredients, artificially introduced hormones and genetically modified products, and their awareness of the long term health benefits of natural food and good nutrition thereby having a lifestyle of health and sustainability (LOHAS). We therefore see ahead a great potential in this market as GEN – Y would be the most prominent segment to be tapped in order to sustain in the market and thereby expand our presence in India.

1. Current Marketing Situation
1.1 Industry overview

The Indian packaged tender coconut water is still an industry in its development phase. There exist a very few players in this market.

J-GAPS aims to position its product in the general market where exist players like Pepsi, Coca cola, Parle agro foods etc. who are major players in the soft drink segment. The emerging trend among consumers to go for healthy and natural food products will drive this industry. Coconut water is a fruit juice with many unique features and a major one is a low calorie content .This makes it a very attractive prospect for weight management positioned juices.

1.2 Company description

J-GAPS will primarily engage in extracting, processing and adding flavors to tender coconut water which is then ready to be delivered to stores. It is a privately held firm will be located in Ratnagiri in the state of Maharashtra .We have identified a location which is closer to the coconut farms. J-GAPS sources the tender coconut for its requirements from its own farms and also additionally from other farmers directly. Our processing unit has a capacity of processing liters water annually.

1.3 Market analysis-

Tender flavored coconut water is recommended for people of all ages. With the consumers turning health conscious and preferring natural products, we believe that our product has a strong market both in domestic circles and in countries abroad. Our main target customer is the young generations who have a fancy for energy drinks. We also target sport persons with our special energy pack.

We want to make our drink available for homes, offices, hospitals, sports persons, marriages, other occasions, hotels and restaurants. The recent studies showing the impact of aerated drinks on health has turned customer to ignore such artificially produced drinks and go for natural food drinks. The rising population will require larger amount of food drinks. Our product will be a natural thirst quencher with added flavor of Kewra essence in it which will be beneficial during the long summer months.

1.4 Major Segmentation Approach

1.5 PESTLE Analysis

The Pestle Analysis identifies the political, economic, social, technological, legal and ecological influences on an organization.

Political factors

Various political factors affect the fruit juice industry. With the change of government the policies regulating the industry might change. As the taxation policy keeps changing, it has a significant effect on fruit juice industry. The government plans of encouraging foreign direct investments would affect our industry highly as organized fruit juice industry has only 3 % share as of now in the market but with FDIs it could increase significantly by coming of bigger players.

Economic factors

Our company would rely on trucks to move our raw materials to the processing plant and distribute our finished product so, fuel is also an important subject, so the company is subject to the fuel price fluctuation, and to possible fuel crisis. Since, ours is an agro based industry so we would be exposed to the risks of high prices due to crop failure, non-availability of raw material because of pest attack etc. Other economic factors affecting fruit juice industry are often linked to variability in real growth, inflation, interest rates, governmental actions and other factors. Factors like money supply, energy availability and cost, business cycles, etc. would also affect our company.

Socio-cultural factors

We are more than a billion strong nations and the youngest country as well. We are also home to the great Indian middle class. The major growth drivers in fruit juice market are increase in health consciousness among consumers, increase in disposable incomes and more sophisticated cocktail culture. There is more money circulating in the economy. With life becoming more hectic and tiring, consumer preferences are witnessing a visible shift towards healthy foods. Even the younger generation has started shifting from fizz to fresh and healthy. As people are becoming more and more educated, they are taking the healthy route.

Technological factors

Fruit juices have become big business throughout much of the developed and developing world with the increasing health conscious proportion of population. In this ever growing industry technology plays a major role in maintaining the quality and cost efficiency to generate higher profits. Better technology can increase the shelf life of our product. Technology refers to both production process as well as machinery.

Legal factors

Processed fruit juices are regulated under the Food and Drugs Act and Regulations as a food product and the Consumer Packaging and Labelling Act. The Food and Drugs Act creates identity standards, provides a basis for labelling requirements and establishes the safety parameters for soft drinks. As food safety requirements become more advanced across the beverage industry, tracking and traceability capabilities are a prerequisite.

Ecological factors

One environmental issue that food processing companies face is waste remaining from packaging. However, the problem often lies in feasibility of collection, separation and purification of the consumers’ disposed bottles or drinks packets. Environmental issues have gained importance because of regulatory requirements. It is not possible to sell a new packaging material without covering all the environmental issues. The reduction of materials in packing cartons can potentially provide both financial and environmental benefits. . We propose to provide our product in tetra packs so that lesser damage is done to the environment in comparison to PET bottles.

2. Product review

2.1 Product features

In India coconut water has always been considered as a health drink to refresh the body due to its nutritional value. Tender Coconut Water is considered the healthiest & best sports drink in the world, because it contains vitamins. It is very refreshing and rich in sugar, electrolytes and minerals – available in the natural form in most sterile conditions. It is a natural isotonic drink where the electrolyte levels are similar to those found in the human body. The water of fresh green coconuts is actually fat free. Our company keeping this factor in mind has come up with two natural flavored drink containing 1. Kewra essence which has a floral fragrance thereby providing a cooling effect in the drink. 2. Mint flavor to provide freshness and energizing flavor to the drink Chota Anna would have two variants in terms of Kewra drink and Mint drink.

Kewra drink

Mint drink
Coconut water
Coconut water
Kewra essence

Farm Fresh Tender Coconut are selected (50% capacity extracted) and the rest purchased from the Ratnagiri Association Coconut supplier and Natural Tender Coconut Water is squeezed out, untouched by hand and put through a special process in order to add the natural flavors of Kewra essence and Mint. The product is packed in food-grade Bottles/ Cans, which keeps it fresh for 9/18 months. The taste is natural and hence good.

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