PROJECT REPORT (404 )

ON

THE STUDY OF BEVERAGES ‘JUICES’ OF

ITC COMPANY

FOR THE PARTIAL FULLFILMENT OF THE

REQUIREMENT FOR THE AWARD OF THE DEGREE
OF

MASTERS OF BUSINESS ADMINISTRATION

(ICDEOL)

U N D ER TH E GU I DA N CE OF: S UBMI TTED BY:

D R . N AR EN D ER C H A UH A N CH ETN A
( M BA /Phd) RO LL N O -7849
( HP U BS) SU MM ERS HI LL
H I MA CH A L P RA D ES H U NIV ERSI TY.
CO N TA CT N O = 98160 43478 .
 1

DECLARATION

I , C h e t n a s t u dyi n g a t HP U I C D E O L d o h e r e b y d e c l a r e t h a t
t h i s p r o je c t e n t i t l e d “ T H E S T UDY OF B E V ER AGE S ‘J UI C E S ’
O F I TC C OM P AN Y ” i s a n o r i g i n a l wo r k d o n e b y me r e g a r d i n g
p r o je c t r e p o r t (course no. 404) of Maters of Business
th
A d mi n i s t r a t i o n 4 s e me s t e r .

DATE:

(CHETNA)
 2

ACKNOWLEDGEMENT

It was a matter of great privilege and pride for us to commence

and complete my project report. I am highly grateful to my
instructor/guide "Dr. Narender Chauhan (MBA/Phd)” who
guided me at each and every step and patiently provided me the
solution to each and every problem and queries, we came across.

CHETNA

ROLL NO. 78 49
 3

CONTENTS
Preface
1. About the company 5
1.1 Introduction 1
1.2 Tobacco business and early days 2
1.3 Towards Indianization and Business Diversification 3
1.4 ITC’s vision statement 3
2. Corporate Governance 8
2.1 ITC’s governance philosophy 4
2.2 Governance structure 4
2.3 Role of various entities 6
3. Businesses of the company 12
4. SWOT Analysis of ITC 18
5. Study of Beverages- Juices by ITC 20
5.1 Packaged juice market growth in India 16
5.2 Concept of Packaged drinks 16
5.3 Market share of juice in Indian economy 16
5.4 Maneuvering business and growth 17
5.5 Finer aspects to check for packaged juices 17
5.6 Benefits of packaged fruit juices 18
5.7 Introduction to branded packaged foods by ITC 19
5.8 Food products policy of ITC 20
5.9 B-Natural: ITC’s latest market player 20
5.10 Market analysis for B- Natural beverage 22
5.11 Major rivalries of B- Natural 26
5.12 Timeline for entry of B-Natural in the market 27
5.13 Campaign Logic: B-Natural 31
6. Findings from the study 38
7. Recommendations for future success of B-Natural 39
8. Conclusion 40
References
 4

PREFACE
In recent years, there has been a tremendous shift of consumer preferences from aerated
drinks to packaged fruit juices. Packaged fruit juices market is enlarging by and large.
Consumers nowadays have unbelievable inclination towards health proposition and they are
thinking and selecting options which are good for their health. No doubt, packaged fruit juice
is a better choice in any circumstances than aerated drinks. The higher income growth of
consumers has motivated them to expose themselves to all variants of fruit juices and then
decide their preferences for future consumption.

ITC, one of India’s and world’s most reputable and respectable brands has been built after a
century of continuous efforts and perseverance with customer focus, respect for people,
excellence and innovation as its strong pillars. After conquering the tobacco, hotels, printing
& packaging businesses ITC has made substantial inroads to the foods business since its entry
in 2004, the disruption it has caused in the industry has been owing to its allegiance to the
strong pillars it has been built upon. These core values, coupled with reception to the
dynamics of market changes has made ITC gain substantial market share in the businesses it
has entered. In the year 2014, ITC started advanced negotiations with Bangalore-based Balan
Natural Food to acquire its juice brand B Natural, which would mark the group’s entry into
the beverage market. ITC’s entry into the Rs 1,200-crore packaged-juice market may stir up a
marketing war with leaders Dabur and PepsiCo, the way the cigarette to hospitality
conglomerate threw challenge to all big brands in the consumer goods business.

This article is a management student’s attempt to see if the juices category is a right pick for
ITC. It also attempts to evaluate the merits of acquiring a pre-existing brand with an
established brand image over building an in-house product, various marketing strategies
followed by the company for diversification of the product, challenges and rivalries along
with some recommendations based on extensive study to take the product on the top shelf of
consumer priority among all other brands available in the market .
 5

1. ABOUT THE COMPANY

1.1 INTRODUCTION
ITC Limited is an Indian multinational conglomerate company headquartered in Kolkata,
West Bengal. Established in 1910 as the 'Imperial Tobacco Company of India Limited', the
company was renamed as the 'India Tobacco Company Limited' in 1970 and later to 'I.T.C.
Limited' in 1974. The dots in the name were removed in September 2001 for the company to
be renamed as 'ITC Limited' where 'ITC' would no longer be an acronym. The company
completed 100 years in 2010 and as of 2012-13, had an annual turnover of US$8.31 billion
and a market capitalization of US$50 billion.
ITC is one of India's foremost private sectors companies with a market capitalization of
nearly US $ 15 billion and a turnover of over US $ 4.75 billion. ITC is rated among the
world’s best big companies, Asia’s 'Fab
50' and the world's most reputable ITC India Limited
companies by Forbes magazine, among
India's most respected companies by
Type Public (BSE:ITC)
Business World and among India's most
valuable companies by Business Today. August 24, 1910
ITC also ranks among India's top 10 Founded
Radha Bazar Lane, Kolkata, India
`Most Valuable (Company) Brands', in
a study conducted by Brand Finance Headquarters Virginia House, Kolkata, India
and published by the Economic Times.
ITC has a diversified presence in S. Puri, Chairman
cigarettes, hotels, paperboards & Key people K Vaidyanath, Director, CFO:
specialty papers, packaging, agri- Partho Chatterjee
business, packaged foods &
confectionery, Information Technology, Industry Tobacco, Foods, Hotels
branded apparel, greeting cards, safety
Cigarettes, Packaged Food,
matches and other FMCG products. Products
While ITC is an outstanding market Hotels, Apparel
leader in its traditional businesses of
Revenue $6.6 billion USD (2018)
cigarettes, hotels, paperboards,
packaging and Agri-Exports, it is
rapidly gaining market share even in its Employees 26,147 (2018)
nascent businesses of packaged foods &
confectionery, branded apparel and Website http://www.itcportal.com/
greeting cards. As one of India's most
valuable and respected corporations,
ITC is widely perceived to be dedicatedly nation-oriented.


source:www.wikipedia.com
 6

Over time, the strategic forays into new businesses are expected to garner a significant share
of these emerging high-growth markets in India. ITC's Agri-Business is one of India's largest
exporters of agricultural products. ITC is one of the country's biggest foreign exchange
earners (US $ 2.8 billion in the last decade).The Company's 'e-Choupal' initiative is enabling
Indian agriculture significantly enhance its competitiveness by empowering Indian farmers
through the power of the Internet. This transformational strategy, which has already become
the subject matter of a case study at Harvard Business School, is expected to progressively
create for ITC a huge rural distribution infrastructure, significantly enhancing the Company's
marketing reach. ITC's wholly owned Information Technology subsidiary, ITC InfoTech
India Limited, is aggressively pursuing emerging opportunities in providing end-to-end IT
solutions, including e-enabled services and business process outsourcing. ITC’s production
facilities and hotels have won numerous national and international awards for quality,
productivity, safety and environment management systems. ITC was the first company in
India to voluntarily seek a corporate governance rating. ITC employs over 21,000 people at
more than 60 locations across India. The company continuously endeavors to enhance its
wealth generating capabilities in a globalizing environment to consistently reward more than
3,95,000 shareholders, fulfill the aspirations of its stakeholders and meet societal
expectations.

1.2 TOBACCO BUSINESS AND EARLY YEARS

"ITC Limited" was incorporated under the name 'Imperial Tobacco' which was later renamed
as 'Imperial Tobacco Company of India Limited', succeeding W.D. & H.O. Wills on 24
August 1910 as a British-owned company registered in Calcutta. Since the company was
largely based on agricultural resource, it ventured into partnerships in 1911 with farmers of
southern part of India for sourcing leaf tobacco. Under the company's umbrella, the 'Indian
Leaf Tobacco Development Company Limited' was formed in Guntur district of Andhra
Pradesh in 1912. The first cigarette factory of the company was set up in 1913 at Bangalore.
In 1918, leaf-buying points were created in southern India. ITC's cigarette factory at Munger
was equipped with printing facility in 1925, paving way for its first non-tobacco business.
Though the first six decades of the Company's existence were primarily devoted to the
growth and consolidation of the cigarettes and leaf-tobacco businesses, ITC's packaging &
printing business was set up in 1925 as a strategic backward integration for ITC's cigarettes
business. It is today India's most sophisticated packaging house. More factories were set up in
the following years for cigarette manufacturing across India.
In 1928, construction began for the company's headquarters, the 'Virginia House' at Calcutta.
ITC acquired Carreras Tobacco Company's factory at Kidderpore in 1935 to further
strengthen its presence. ITC helped to set up indigenous cigarette tissue-paper-making plant
in 1946 to significantly reduce the import costs and a factory for printing and packaging was
set up at Madras in 1949. The Company acquired the manufacturing business of Tobacco
Manufacturers (India) Limited and the complementary lithographic printing business of
Printers (India) Limited in 1953.
 7

1.3 TOWARDS INDIANIZATION AND BUSINESS DIVERSIFICATION

The company was converted into a Public Limited Company on 27 October 1954. The first
step towards Indianization was taken in the same year with 6% of Indian shareholding of the
company. ITC also became the first Indian company to foray into consumer research during
this time. During 1960's, technology was given more focus with setting up of cigarette
machinery and filter-rod manufacturing facilities aimed at achieving self-sufficiency in
cigarette-making.
Ajit Narain Haskar became the company's first Indian chairman in 1969 and this was crucial
in building up the Indian management for the company. As the company's ownership
progressively Indianised, under Haskar's leadership, the name of the company was changed
from 'Imperial Tobacco Company of India Limited' to 'India Tobacco Company Limited' in
1970. The shareholding went over 60% in 1976 and more hotels were started by the company
in the following years. ITC Sangeet Research Academy was set up at Calcutta in 1977. In
1979, ITC entered the paperboards business by promoting ITC Bhadrachalam Paperboards
Limited. J N Sapru took over as the company's chairman in 1983 and the international
expansion started with the acquisition of Surya Nepal Private Limited in 1985.
Y C Deveshwar took over as the company's chairman in 1996 and the corporate governance
structure was re-crafted to support effective management of multiple businesses. ITC exited
from edible oils business and financial services; sold the ITC Classic Finance Limited to
ICICI Limited and handled the 'Sundrop' business to ConAgra Foods Limited in 1998. In the
year 2000, an innovative initiative for farmers called 'e-Choupal' was started in Madhya
Pradesh in 2000. The same year witnessed the launch of ITC's 'Wills Sport' range of casual
wear with first retail outlet in New Delhi and ITC's entry into stationery products and gifting
business introducing the 'Expressions' range of greeting cards and 'Classmate' notebooks.
A wholly owned information technology subsidiary, ITC Infotech India Limited was also
started in 2000 and the ITC Bhadrachalam Paperboards Limited was merged into ITC
Limited. The name of the company was changed to 'ITC Limited' omitting the dots and
adapting the strategy 'No stops for ITC' in 2001. Employee stock option scheme was
introduced for the first time and a web portal for the company was launched. Subsidiaries for
ITC Infotech were set up at United Kingdom and USA.

1.4 ITC’s VISION STATEMENT:

 8

2. CORPORATE GOVERNANCE

ITC Limited has been one of the frontrunners in India to have put in place a formalized
system of Corporate Governance. Its governance framework enjoins the highest standards of
ethical and responsible conduct of business to create value for all stakeholders.
2.1 ITC’S GOVERNANCE PHILOSOPHY
ITC defines Corporate Governance as a systemic process by which companies are directed
and controlled to enhance their wealth-generating capacity. Since large corporations employ a
vast quantum of societal resources, ITC believes that the governance process should ensure
that these resources are utilised in a manner that meets stakeholders’ aspirations and societal
expectations. This belief is reflected in the Company’s deep commitment to contribute to the
“triple bottom line”, namely conservation and development of the nation’s economic, social
and environmental capital.
ITC’s Corporate Governance structure, systems and processes are based on two core
principles:
(i) Management must have the executive freedom to drive the enterprise forward
without undue restraints, and
(ii) (ii) This freedom of management should be exercised within a framework of
effective accountability.
The cornerstones of ITC’s governance philosophy are trusteeship, transparency, ethical
corporate citizenship, empowerment & accountability and control.

2.2 THE GOVERNANCE STRUCTURE

The practice of Corporate Governance in ITC takes place at three interlinked levels:

ITC believes that any meaningful policy on Corporate Governance must empower the
executive management of the Company. At the same time, Governance should create a
mechanism of checks and balances to ensure that the decision-making powers vested in the
executive management are used with care and responsibility to meet stakeholders’ aspirations
and societal expectations. From this definition and core principles of Corporate Governance
emerge the cornerstones of ITC’s governance philosophy, namely trusteeship, transparency,
 9

ethical corporate citizenship, empowerment & accountability and control. ITC believes that
the practice of each of these creates the right corporate culture that fulfils the true purpose of
Corporate Governance.
The three-tier governance structure ensures that:
(a) Strategic supervision (on behalf of the Shareholders), being free from involvement in the
task of strategic management of the Company, can be conducted by the Board with
objectivity, thereby sharpening accountability of management;

(b) Strategic management of the Company, uncluttered by the day-to-day tasks of executive
management, remains focused and energised; and

(c) Executive management of the divisional business free from collective strategic
responsibilities for ITC as a whole, remains focused on enhancing the quality, efficiency and
effectiveness of the business to achieve best-in-class performance.

The core roles of the key entities flow from this structure. These roles, in turn, determine the
core responsibilities of each entity. In order to discharge such responsibilities, each entity is
empowered formally with requisite powers. The structure, processes and practices of
governance are designed to support effective management of multiple businesses while
retaining focus on each one of them. The Governance Document that sets out the structure,
policies and practices of governance within the organisation is available on the Company’s
corporate website www.itcportal.com.
 10

2.3 ROLES OF VARIOUS ENTITIES

Board of Directors (Board): The primary role of the Board is that of trusteeship to protect
and enhance shareholder value through strategic supervision of ITC, its wholly owned
subsidiaries and their wholly owned subsidiaries. As trustees, the Board ensures that the
Company has clear goals aligned to shareholder value and its growth. The Board sets
strategic goals and seeks accountability for their fulfillment. The Board also provides
direction and exercises appropriate control to ensure that the Company is managed in a
manner that fulfils stakeholders’ aspirations and societal expectations.

Board Committees: The roles of the Board Committees are determined by the Board from
time to time, details of which are provided below, under the heading ‘Committees of the
Board’.

Corporate Management Committee (CMC): The primary role of the CMC is strategic
management of the Company’s businesses within Board approved direction / framework and
realization of Company goals. The CMC also assesses the performance of the businesses and
allocates resources, and operates under the strategic supervision and control of the Board.

Divisional Management Committee (DMC): The primary role of the DMC is executive
management of the business to realise tactical and strategic objectives in accordance with
Board approved plan. The Executive Committee for Business Vertical within the Division is
responsible to deliver comprehensive business results under the overall direction and
supervision of the Divisional Chief Executive supported by the DMC.

Chairman: The primary role of the Chairman of the Company is to provide leadership to the
Board. As the Chairman of the Board, he presides over its meetings and leads and assists the
Board in setting and realizing the Company’s strategic vision and related short and long term
goals. He is responsible, inter alia, for the working of the Board, for its balance of
membership (subject to Board and Shareholder approvals) and for ensuring that all Directors
are enabled and encouraged to play a full part in the activities of the Board. The Chairman
ensures that relevant issues are on the Board agenda and the Board is kept informed on all
matters of importance. He also presides over General Meetings of Shareholders.

Managing Director: The Managing Director carries total responsibility for the strategic
management of the Company and provides leadership to the CMC for realising Company
goals in accordance with the charter approved by the Board. He is responsible, inter alia, for
the working of the CMC, for ensuring that all relevant issues are on the agenda and that all
CMC Members are enabled and encouraged to play a full part in its activities.

The present Managing Director, Mr. S. Puri, has been appointed also as the Chairman of the
Company with effect from 13th May, 2019.

Non-Executive Director: Non-Executive Directors, including Independent Directors, play a

critical role in imparting balance to the Board processes by bringing independent judgment
on issues of strategy, performance, resources, standards of Company conduct etc.
 11

Executive Director: The Executive Director assists the Board in realising its role of strategic
supervision of the Company in pursuit of its purpose and goals. As a member of the CMC,
the Executive Director contributes to the strategic management of the Company’s businesses
within Board approved direction / framework.

An Executive Director accountable to the Board for a business, assumes overall responsibility
for its strategic management, including governance processes and top management
effectiveness. Similarly, as Director accountable to the Board for a corporate function, the
overall strategic responsibility for its performance forms part of the Executive Director’s role.
In the context of the multi-business character of the Company, an Executive Director is in the
nature of a Managing Director for those businesses and functions reporting to him.

CMC Member: The CMC Member contributes to the strategic management of the
Company’s businesses within Board approved direction / framework. A CMC Member
accountable for a business assumes responsibility for its strategic management, including
governance processes and top management effectiveness. Similarly, where accountable for a
corporate function, the overall strategic responsibility for its performance forms part of the
CMC Member’s role.

Divisional Chief Executive: The Divisional Chief Executive for a business has the executive
responsibility for its day-to-day operations and provides leadership to the DMC in its task of
executive management of the business and the Verticals within the Division. The Chief
Operating Officer - Business Vertical is responsible for providing leadership to the Vertical
and realising the tactical and strategic objectives of the respective business area.
 12

3. BUSINESSES OF THE COMPANY

ITC has diversified presence in Branded Packaged Foods, Personal Care, Education and
Stationery, Agarbattis & Safety Matches, Lifestyle Retailing, Cigarettes & Cigars, Hotels,
Paperboards & Specialty Papers, Packaging, Agri-business & IT.
3.1 PRODUCT DESCRIPTION

Cigarettes

ITC is the market leader in cigarettes in India. With its wide range of invaluable brands, it
has a leadership position in every segment of the market. It's highly popular portfolio of
brands includes Insignia, India Kings, Classic, Gold Flake, Silk Cut, Navy Cut, Scissors,
Capstan, Berkeley, Bristol and Flake.

ITC Cigarette Manufacturing Plant ITC Cigarettes

 13

The Company has been able to build on its leadership position because of its single minded
focus on value creation for the consumer through significant investments in product design,
innovation, manufacturing technology, quality, marketing and distribution.

All initiatives are therefore worked upon with the intent to fortify market standing in the long
term. This in turns aids in designing products which are contemporary and relevant to the
changing attitudes and evolving socio economic profile of the country. This strategic focus on
the consumer has paid ITC handsome dividends.

Foods

ITC made its entry into the branded & packaged Foods business in August 2001 with the
launch of the Kitchens of India brand. A more broad-based entry has been made since June
2002 with brand launches in the Confectionery, Staples and Snack Foods segments. The
Foods business is today represented in 4 categories in the market. These are:
* Ready To Eat Foods
* Staples
* Confectionery
* Snack Foods
In order to assure consumers of the highest standards of food safety and hygiene, ITC is
engaged in assisting outsourced manufacturers in implementing world-class hygiene
standards through HACCP certification. The unwavering commitment to internationally
benchmarked quality standards enabled ITC to rapidly gain market standing in all its 6 brands
viz: Kitchens of India, Aashirvaad, Sunfeast, mint-o, Candyman, Bingo!

Image Source: www.google.co.in

 14

Lifestyle Retailing
ITC’s Lifestyle Retailing Business Division has established a nationwide retailing
presence through its Wills Lifestyle chain of exclusive specialty stores. Wills Lifestyle, the
fashion destination, offers a tempting choice of Wills Classic work wear, Wills Sport relaxed
wear, Wills Clublife evening wear, fashion accessories and Essenza Di Wills – an exclusive
range of fine fragrances and bath & body care products and Fiama Di Wills - a range of
premium shampoos and shower gels. Wills Lifestyle has also introduced Wills
Signature designer wear, designed by the leading designers of the country. Wills Classic
work wear was launched in November 2002, providing the premium consumer a
distinct product offering and a unique brand positioning. ITC forayed into the youth
fashion segment with the launch of John Players in December 2002 and John Players
is committed to be the No.1 fashion brand for the youth.

Image Source: www.google.co.in

Education & Stationary products

ITC made its entry into the stationery business in 2002 with its premium range of
notebooks, followed in the year 2003 with the more popular range to augment its
offering. ITC's stationery Brands are marketed as "Classmate" and "Paperkraft", with
Classmate addressing the needs of school goers and Paperkraft targeted towards college
students and executives.

Image Source: www.itcportal.com

 15

Agarbattis

As part of ITC's business strategy of creating multiple drivers of growth in the FMCG sector,
the Company commenced marketing Agarbattis (incense sticks) sourced from small-
scale and cottage units in 2003.

Image Source: www.itcportal.com

Hotels

ITC entered the hotels business in 1975 with the acquisition of a hotel in Chennai, which was
then rechristened ITC Chola. Since then the ITC-Welcomgroup brand has become
synonymous with Indian hospitality with over 90 hotels in 77 destinations. ITC Hotels is
India's third largest hotel chain with over 100 hotels. ITC Hotels is regularly voted amongst
the best employers in Asia in the hospitality sector.

Image Source: www.itcportal.com

 16

Packaging

ITC's Packaging & Printing Business is the country's largest convertor of paperboard
into packaging. It converts over 50,000 tonnes of paper and paperboard per annum into a
variety of value-added packaging solutions for the food & beverage, personal products,
cigarette, liquor, cellular phone and IT packaging industries. It has also entered the
Flexibles and Corrugated Cartons business.

Image Source: www.itcportal.com

Agri Business

e-Choupal

The unique e-Choupal model creates a significant two-way multi-dimensional channel

which can efficiently carry products and services into and out of rural India, while
recovering the associated costs through agri-sourcing led efficiencies. This initiative now
comprises about 6500 installations covering nearly 40,000 villages and serving over 4
million farmers. The unique ‘Choupal Haat’ platform seeks to create awareness and improve
access of the rural community to a wide range of areas - ranging from financial services and
pharmaceuticals to commercial vehicles and white goods. Along with Choupal Saagars
(integrated rural services hubs), this platform fosters round-the-year and large scale
engagement with the rural community thereby enhancing the vitality of your Company’s e-
Choupal network.

Image Source: www.itcportal.com

 17

Leaf Tobacco

ITC is the largest buyer, processor and exporter of leaf tobaccos in India - creating a
global benchmark as the single largest integrated source of quality tobaccos. Serving
customers in 50 countries across more than 70 destinations, ITC co-creates and delivers value
at every stage of the leaf tobacco value chain. Global production of Flue Cured Virginia
(FCV) tobacco registered a further decline of 5.3% in 2018 over the previous year, primarily
impacted by continued calibration in China’s crop output. After three successive years of
decline, Indian crop output in 2018 increased by 6 million kgs. to 218 million kgs. However,
it still remains far below the levels of 2014 representing a cumulative drop of over 30%.

Image Source: www.itcportal.com

Information Technology

ITC Infotech offers IT services and solutions across five key industry verticals: Banking,
Financial Services & Insurance (BFSI), Consumer Packaged Goods (CPG) & Retail,
Manufacturing & Engineering Services, Travel, Hospitality & Transportation and Media &
Entertainment.
 18

4. SWOT ANALYSIS OF ITC

SWOT analysis is a strategic planning technique used to help a person or organization

identify strengths, weaknesses, opportunities, and threats related to business competition or
project planning. It is intended to specify the
objectives of the business venture or project and
identify the internal and external factors that are
favorable and unfavorable to achieving those
objectives. Users of a SWOT analysis often ask
and answer questions to generate meaningful
information for each category to make the tool
useful and identify their competitive advantage.
SWOT has been described as the tried-and-true
tool of strategic analysis. SWOT analysis is a tool
for auditing an organization and its environment.
It is the first stage of planning and helps marketers
to focus on key issues.

4.1 STRENGTHS

 Portfolio of Business: ITC has 6 strong

and diverse businesses under its name which boasts its total revenue and allows ITC
to innovate and explore other business opportunities.
 Strong Brands in various businesses: ITC is a strong house of brands with most of its
products leading the segments in which they operate. ITC owns some of the most
popular cigarette brands like gold flake and Classic. It also owns Sunfeast, which is
amongst the top selling biscuits in India. Similarly, Aashirvaad, Yippee!, Engage,
John Players and Bingo are also amongst the market leader in their respective
categories. ITC’s hotel and property businesses are also doing well.With a portfolio
like this, ITC has become one of the most powerful conglomerates in India and is
admired all over the world.
 Effective Social Business Initiatives: ITC has developed a triple-bottom-line strategy
through which concentrates on developing the nation’s economic, social and
environmental capital. ITC has brought in initiatives like E-Choupal, Choupal
Pradarshan Khet (CPK) which benefits the people at the grass root level, i.e. farmers.
These initiatives have also helped ITC to improve its corporate image from a
traditional tobacco manufacturer.
 Inter and Intra-divisional Synergy: ITC has successfully utilised the strengths of
existing business to foray into a newer products or categories. ITC leveraged the
strong distribution system of cigarette brands to create a channel for its FMCG
products. Furthermore, ITC leveraged the knowledge of food and bakery items from
its hotel business to enter into Packaged Food category.
 19

4.2 WEAKNESSES

 High Proportion of revenues from Tobacco products: ITC has been continuously
making efforts to divert the FMCG business from over dependence on tobacco
products and have been successful in doing so to an extent. But, tobacco products
remain to be the major source of the revenue contributing more than 60% of the total
revenue from FMCG businesses.
 Association with Tobacco Products affects the image: ITC has made a lot of efforts to
improve its corporate image but the fact that ITC has many tobacco products in its
portfolio impacts its corporate image.
 An increase in Tax on Tobacco affects revenue: Due to the increase in taxation on
tobacco products, the prices and hence revenues get affected.

4.3 OPPORTUNITIES

 Strategic Acquisitions: ITC should continue making the strategic acquisition like they
have done in the past by acquiring Savlon from Johnson & Johnson and B Natural
from Balan natural Foods. Keeping in mind that the product fits into the existing
distribution network, ITC can look to increase its portfolio of products and expand its
Non-Tobacco FMCG business and thereby strengthening the base of revenue.
 Growth in Purchasing power and improving lifestyle: ITC should tap on the
increasing purchasing power and improving the lifestyle of customers in India. This
could help in increasing revenue for all its businesses.
 Growing Personal Hygiene as well as Food processing Industry in India: ITC should
utilise its distribution channel in Personal Hygiene and Food Processing Industry to
capitalise on the growth in the categories and hence increase revenue.
 Tap opportunities created in the Rural Market: The growing rural market in India and
other emerging nations create huge opportunities to improve the bottom-line of the
company.

4.4 THREATS

 Intensifying Competition in FMCG businesses: ITC faces intense competition in its

FMCG business from large MNCs like HUL and P&G and Indian FMCGs like
Patanjali and Dabur. This limits the market share for ITC.
 Strict Regulations and Increasing Taxation in Cigarette Business: The Tobacco and
Cigarette Industry in India continue to be targeted by strict government regulations
and taxation system. This possesses a threat to the highly profitable Cigarette business
of ITC.
 Increasing awareness on health: There has been an increase in the health
consciousness which has resulted in the decrease in demand for tobacco products in
India. Also, anti-smoking campaigns throughout the country affect the sales of
cigarettes.
 20

5. STUDY OF BEVERAGES – JUICES

5.1 PACKAGED JUICE MARKET GROWTH IN INDIA

India, a subcontinent of Asia, is a land with the blusterous population of more than 135 crore,
and hence, it shows tremendous potential for fast moving consumer goods. The consumer’s
spending power capacity has also increased remarkably in past few years and this glorifies
fresh dimension of purchasing goods (juices), eventually resulting to its consumption.India
has undoubtedly emerged as the biggest market in the entire periphery of the globe.

Countries like China and USA have realised the enormous potential and are trying to
penetrate the market influentially. Similar to all fast moving consumer goods, juice industry
has also grown by leaps and bounds in last few years. With each passing day, life has been
getting fast-paced; individuals left with no time and this specifically has been the reason for
advent of convenience food.

The convenience food product has unfolded numerous dimensions, depending upon the
character of food like it can be ready-to-eat, ready-to-cook, ready-to-consume and ready-to-
serve. Speaking especially of packaged juice, it is in particular ready-to-consume (ready-to-
drink) mode and these three words define and depict the nature of packaged juice and also the
comfort it adds to the life of the consumer.

5.2 CONCEPT OF PACKAGED DRINK

The beverages are generally classified as alcoholic and non-alcoholic whereas non-alcoholic
beverages can further be segregated as carbonated and non-carbonated. Besides packaged
fruit juices; non-carbonated drinks have bottled water, energy drinks, flavoured milk and so
on in its list. The concept of packaged drink has been welcomed with open heart in India and
in practicality, has swept the entire market by its exceptionally high demands.

Compound Annual Growth Rate (CAGR) has reported the growth of juice market in India as
more than 18% consistently and even forecasted its growth to be more than 15% in coming
few years; according to India Juice Market Outlook, 2021.

Not only this, the report of “Drink Technology India Fair” has stated that India has been
holding the share of 10% globally in consumption of non-alcoholic beverages. India has
emerged as market with even high potential than China and this has been a challenge for
global market leader to grip the market with their products in India.

5.3 MARKET SHARE OF JUICE IN INDIAN INDUSTRY

The juice market in India is echeloned into three segments: fruit drinks (with maximum 30%
fruit content) holds about 50-60% market share, fruit juices (with almost 100% fruit content)
holds about 30-35% market share and nectar drinks (with almost 30-90% fruit content) holds
just about 10% market share of entire juice market in India.
 21

The current Indian government has suggested and proposed all drink companies of India to
have at least 2% of fruit content in their drinks, so that it has some nutritive character added
to it and along with to benefit the farmers working towards production of fruits in India.
Mango has the biggest share in fruit juice industry with about 60% share and all other fruits
altogether have the remaining percentage.

The potential capacity of packaged juice market in our country is approximately of gigantic
Rs 1,500 crore, according to consulting firm Technopak. The fruit juices having 100% fruit
content is carving future potential for it and big companies are working towards this splendid
step. Few brands like Hindustan Coca Cola and Jain Irrigation have started to grow mango by
technology of Ultra High Density Plantation (UHDP), so that they have all desired
availability of mango fruits for their juice production. Thus, it is apparent and an indication
that in coming years, the market share of fruit juices will expand rapidly.

5.4 MANOEUVRING BUSINESS AND GROWTH

Several Indian business firms have entered this emerging segment and have been a reason for
actual flourishing of this packaged juice sector. Organisations like Dabur (brand - Real and
Real Active juices), Patanjali Ayurveda (brand - Patanjali juices), ITC (brand - B Natural),
Hector Beverages (brand - Paper Boat), Mother Dairy (brand - Safal), PepsiCo India (brand -
Tropicana), Parle Agro (brand - Saint fruit juices), Manpasand Beverages (brand - Mango
Sip), Organic (brand - 24 Mantra) are few to name who are manoeuvring the business and
growth of packaged juice industry in India.

Besides such firms, international players are not far behind and Pioneer Foods (brand - Ceres
fruit juices) and Coca-Cola (brand - Minute Maid) have their recognisable market share. The
packaged juices are available in tetra-packs, tin or pet bottles; but tetra-packs availability has
the largest share in market with almost 90% in packaged juices. They are available in various
size packs. The war of dominance among big companies will obviously benefit the Indian
consumer with enhanced quality and deflated price too.

5.5 FINER ASPECTS TO CHECK FOR PACKAGED JUICES

 All packaged fruit juices are having high-shelf life ranging from six months to one
year. In order to impart such long shelf life, they are exposed to heat treatment which
makes juices lose all its vitamins.

 The juices which come with label ‘no preservatives’ are those which are without
oxygen in it. The removal of oxygen actually degrades the quality of juice eventually
deteriorating the juice quality.

 The sweeteners and artificial flavours used in such beverages are not desirable and
recommended for our bodies. The addition of chemicals in any form; be it
antioxidant, stabilisers are not appreciated for health factors.

 Such juices are a complete ‘no’ for those fighting diabetes and weight gain.
 22

 Fresh juices are low in calories than packaged juices. Hence, freshly prepared juices
are a healthier option than packed juices.

 Fruits used in packaged juices are not visible to consumer and hence low quality fruits
are also used by juice making companies. Such packaged juices have patulin (organic
compound harmful to mankind) in them indicating poor quality of fruits used in it.

 Fruits with high-pulp content are the best for our health and hence win the battle
with zero content fibre juices. Juices with no fibre content must be avoided.

5.6 PACKAGED FRUIT JUICES COME WITH BENEFITS

 The consumers being the king of the market; today have huge options and variants of
juices to choose their preferences available in market. Previously only certain options
were available at single point counter or even currently at fresh juice counter as well.

 People opt for almost all fruit juices be it pomegranate, apple, litchi, mango, guava,
black currant, grapes, oranges, banana, sweet lime, mixed fruit juices as well.

 Consumers are well assured of the hygiene maintained by the company manufacturing
packaged fruit juices as they are FSSAI certified. Consumer heavily trusts the
international and national brands on parameters of quality and hygiene. The single
point juice counter may not maintain the desired hygiene and sanitation while
preparing juices.

 Consumers are assured of reasonable pricing all across the corners of the country due
to heavy competition prevailing among companies.

 Packaged juices are easy to consume and handle. They do not have strict requirement
to store it at house or somewhere else and this acts as an icing on cake.

 They are consistent in their taste factor and this consistency is one which is not
guaranteed at fresh juice counter.

 Consumers are aware about the calorific content of the juices they purchase and
consume as the pack has entire detail of nutritive value described on it.

 One individual is exposed to all fruit juices, which in earlier times, were not. No fruit
is confined to any particular region as production of fruits is confined. Example –
production of apple is confined to Himachal Pradesh and Kashmir state but apple
juice is available all across India.

In recent years, there has been a tremendous shift of consumer preferences from aerated
drinks to packaged fruit juices. It relies on consumer to decide the choices among fresh juices
or packaged juices; as packaged juices are doubtless; a product which has some pros and cons
both for the consumers. In coming years, the packaged juice sector will further benefit both
the consumer and the product.
 23

5.7 INTRODUCTION TO BRANDED PACKAGED FOODS BY ITC

ITC's Branded Packaged Foods business is one of the fastest growing foods businesses in
India, driven by the market standing and consumer franchise of its popular brands -
Aashirvaad, Bingo! Sunfeast, Fabelle, Sunbean, Yippee! Kitchens of India, B Natural, ITC
Master Chef, Farmland, mint-o, Candyman and GumOn. The Foods business is today
represented in multiple categories in the market - Staples, Spices, Biscuits, Confectionery &
Gums, Snacks, Noodles & Pasta, Beverages, Dairy, Ready to Eat Meals, Chocolate, Coffee
and Frozen Foods.

ITC's uncompromising commitment to the health and safety of its consumers ensures
adherence to the highest levels of quality, safety and hygiene standards in manufacturing
processes and in the supply chain. All ITC-owned manufacturing units are Hazard Analysis
and Critical Control Point (HACCP) certified. The quality performance of all manufacturing
units is monitored continuously online. Going beyond process control, ITC ensures that
quality standards are scrupulously adhered to while choosing ingredients that go into the
preparation of its food products.

ITC's Foods brands delight millions of households with a wide range of differentiated, value-
added products developed by leveraging ITC's in-house R&D capabilities, relevant consumer
insights, a deep understanding of the Indian palate gained from its Hotels business, its agri-
sourcing & packaging strengths, exciting, innovative communication and an unmatched
distribution network.The business continues to invest in every aspect of manufacturing,
distribution and marketing to ensure that it can leverage emerging opportunities and fulfill its
aspiration of being the most trusted provider of Branded Packaged Foods in the country.
ITC's Foods business also exports its products to the key geographies of North America,
Africa, Middle East and Australia. Against the backdrop of a challenging operating
environment as, the company sustained its position as one of the fastest growing branded
packaged foods businesses in the country, leveraging a robust portfolio of brands, a slew of
first-to-market offers, a range of distinctive products customised to address regional tastes
and preferences along with an efficient supply chain and distribution network.

ITC BRANDED PACKAGED FOOD PRODUCTS

Image Source: www.itcportal.com

 24

5.8 PACKAGED FOOD PRODUCTS POLICY OF THE COMPANY

It is ITC's policy that its food products should provide nutritious, tasty, hygienic and
convenient options to the consuming public.ITC will offer food products across multiple
categories, price points, delivery formats and segments as dictated by the needs of the
consumer.

ITC's portfolio of food products will be continuously improved and modified to -

 offer new products that meet the aspiration of the changing consumer,

 offer food products with affordable and appropriate nutrition,

 offer food products with micronutrient fortification,

 drive reduction of sodium, sugar and fat in Products,

 offer trans-fat free products,

 offer functional food products with focus on India specific metabolic disorders,

 follow a strict code for making product functional claims,

 follow the highest standards in nutrition labeling and reporting,

 follow responsible marketing and consumer communications practices,

 create and sustain R&D focus in development of new products and processes,

 follow the highest standards of hygiene and manufacturing practices in all delivery
formats,

 collaborate with experts and institutions and

 ensure widespread accessibility to healthy products through appropriate pricing and

wide distribution.

5.9 B- NATURAL: ITC’S LATEST MARKET PLAYER

ITC is a relatively new entrant to the beverage category, and had debuted in juices in 2015 by
acquiring B Natural.

In the Dairy & Beverages Business, the ‘B Natural’ range of juices leveraged its ‘Not from
Concentrate’ platform to deepen consumer connect by providing a more nutritive and natural
tasting experience whilst simultaneously promoting fruit pulp procured from Indian farmers,
thereby supporting the Indian farm and food processing sector. The entire range of B Natural
Beverages is ‘made with 100% Indian Fruit & 0% concentrate’. The Business also launched a
premium range of juices comprising Ratnagiri Alphonso, Himalayan Mixed Fruit and
Dakshin Guava in an appealing transparent bottle format providing an exotic and rich fruit
experience which has received an excellent initial response from the target consumers.
 25

The businesses leverages company’s agri-commodity sourcing expertise to procure high

quality raw materials thereby ensuring the highest level of quality and safety of its
products.The Business leveraged its extensive sourcing network and associated infrastructure
in key growing areas coupled with deep-rooted farmer linkages to source high quality fruit
pulp for your Company’s ‘B Natural’ juices brand. The Business tailored its sourcing and
supply chain network to enable migration of the entire B Natural juices portfolio to ‘made
with 100% Indian Fruit & 0% Concentrate’ proposition – a first in the industry, benefitting
both consumers through higher retention of natural nutrients as well as the Indian farmers.
The Business is working closely with small and marginal farmers across several states in
building scale and sourcing options.

Herein lies a potential roadblock for ITC. B Natural, right down to the name, is being built on
a health benefit pitch. But in a market which has such a large amount of clutter focusing on a
primary benefit or in the very least alluding it, it will be difficult to break through on a ‘health
and taste’ pitch. Plus going the tetrapak route, a tried and tested packaging for juices, also
puts it in direct crosshairs of both Tropicana and Real. The visual similarities between the
packaging of latter and B Natural though very superficial, might still be cause of concern
because of the very high brand equity Dabur’s Real enjoys in the category. Minute Maid
though not a major player at present has the advantage of being visual different from its
competitors. That said, going the can route is unfeasible from a monetary point of view and
the tetrapak has traditionally been the packaging of choice even in the fruit based drinks
category with products like Appy, Jumpin and Frooty. Could B Natural have gone the PET
bottle route? Perhaps but the brand already has visibility in certain Southern Indian markets
as a tetrapak product and alienating present customers to rejig the product far too much does
not make immediate business sense. They have after all spent a considerable amount of time
and energy into ‘improving’ the product post acquisition in terms of both taste as well as the
packaging design.
 26

5.10 MARKET ANALYSIS FOR B NATURAL BEVERAGE

ITC has brought innovation to the table and opened new avenues to businesses evident with
the likes of Yippee Noodles and Bingo, which has led us present similar propositions that
talks about penetrating the market and the available categories rather than concentrate on
dismantling the current market leaders by competing on the same grounds they are in.
Expanding the size of the pie should be the way forward as there are opportunities available
for the same.

The size of the juices and nectars segment, the annual growth rate that is expected, the
demographic dividend looking for the products in this segment strengthened by the
demographic profile of our country, the market available to be captured especially in the east
and north east regions will emphasize the need to go for category penetration. B Natural
should position itself as the product that gives us a rich and enriching experience provided
only by the natural products which is also evident by its taste. B Natural should be a
celebration of Taste, without compromising on achieving health. It should also talk about
being the natural self, and convey those emotions that are resultant of one being in the midst
of nature and going nostalgic. ITC should relook at its ATL and BTL advertising which can
provide sufficient momentum to the efforts put to increase the brand awareness of B Natural.

With growing trends in digital marketing – content marketing, affiliate marketing; the
company should explore additional avenues to harness the available opportunities.

The introduction of PET bottles, changes in the structure of packaging, as the competitors’
products look the same, posing difficulty for a consumer to identify ITC’s products, having a
brand ambassador, are some of the areas the company should look at in order to gain mileage.

Why do people drink juices?

100 95

90
80 73
70
60 56

50
39
40 34
30
30
16 18
20
9
10
0

Healthy/Nutritious Energetic Supplement to soft drinks

Non Carbonated Beating the Heat No preservatives
Best for Skin Taste Convenience
 27

After knowing why people drink juices, we should also look at their buying patterns, which
may be planned, unplanned, impulsive and non-impulsive. Planned buying pattern should
stimulate ITC to look at potential avenues like Supermarkets, food chains, grocery stores,
where fighting for shelf space takes place.

Attractive incentives in the form of margins, providing an additional shelf space at the points
of sale, offers during various occasions can make or break the reach of B Natural. These
market places generally attract women and the placing of the product should be closer to
those products which are regularly bought by them, the colour combinations of the shelf
space should also be in such a way that it resonates with their preferences, this will require
the team from B Natural to work closely with the super markets/ grocery stores.

Unplanned buying occurs in regions like colleges, schools, and also places where millennials
gather, generally the local kirana stores, where availability of B Natural makes a difference to
this population.

A closer look at the reasons given by same set of respondents for not drinking packed juices
throws some light regarding the aspects B Natural should be worried about.

Not Drinking Packaged Juices, because?

Never Tried 6%

Expensive 17%

Added preservatives 20%

Added Sugar Content 28%

Skepticism regarding freshness 29%

0% 5% 10% 15% 20% 25% 30% 35%

While changing the sugar content will involve massive changes in the R&D section, it is not
something that the competitors are better off with, Real and Tropicana contain more or less
the same amount of sugar.

B Natural can address the skepticism regarding freshness and this is more in sync with the
value proposition proposed by us, as the product next to nature which symbolises freshness.
Indians have a strong preference for freshly prepared foods, and most have a definite
prejudice against packaged, branded, or processed foods, believing them to be lower in
flavour and nutrients.
 28

Analysis of the perceptual map tell us more about the influencing factors which are:

 Aspects of Fun: Refreshment, Enjoyment, Hygienic

 Mental Makeup: Reflects attitude, looks trendy

 Relaxation: Relaxes mentally, satisfies thirst

 Social Aspect

FACTOR ANALYSIS OF IMPORTANCE OF FACTORS FOR PURCHASING THE

PACKAGED FRUIT DRINK

Rotated Component Matrix Component

Product
Promotion Quality
Feature

Taste 0.02826 0.0232 0.890045

No of Flavours 0.4508 0.4363 0.4964

Extraction Method: Principal Appearance of the

0.3974 0.6211 0.1716
Component Analysis packet

Rotation Method: Varimax

Expiry & Mfg Date -0.3304 0.2706 0.6331
with Kaiser Normalisation

Nutritional Value -0.3961 0.7591 -0.0429

Small Consumption
0.0697 0.7919 0.2131
Unit

Frequency of Ads 0.8583 0.0281 -0.0319

Brand Ambassadors 0.7968 -0.1613 -0.0025

Promotional Schemes 0.7539 0.004 -0.0961

The above analysis states that number of flavors actually plays a lesser role in promotion and
product feature, major role is played by attributes Frequency of Ads, Brand Ambassador (a
concept that is not used by Real or Tropicana), promotional schemes, Under quality,
appearance of packet, nutritional value, SKU takes dominance. All these time and again
indicates the aspects B Natural should be looking at to reach more penetration.
 29

Why does a Retailer stocks fruit juices?

4%
23%
8%

16%
49%

Customer's Demand Brand Name Relations with the retailer

Market leader Trade Schemes

The above chart illustrates the responses that were collected from close to 30 outlets spread
across Indore. It depicts the reasons as to why a retailer stocks fruit juices. For a product like
B Natural, trade schemes, relations with the retailer and brand name should be of paramount
importance. Brand name can be enhanced through activities that will provide a mileage to the
brand, some of them include ATL, BTL advertising, coupled with a brand ambassador. Other
than these, the trade schemes that are provided to the retailer can be changed, along with
providing a replacement policy and solving the routing problem judiciously by selecting areas
which are closer to each other.

Retailers do not stock fruit juices because?

12% 9%
35%

29%
15%

Replacement Policy Relations with the trader Trade Schemes

Never Stocks fruit juices Routing problem

An online survey that was conducted recorded close to 370 participants’ responses from
heterogeneous backgrounds. Assuming the responses will be more or less the same across all
other regions, B Natural has already considered the parameter Taste and should position itself
 30

as a drink that can be consumed and also achieving health, refreshing/ beating the heat, an
alternative to the available soft drinks and that which makes a person energetic.

Start Small Today, Take a Giant Leap Tomorrow: This is an on the field campaign that
involves exercise which will estimate the current penetration levels in the market, an
initiative that ITC can engage itself in Business schools across the country according to
various regions. Students should carry out an activity by selecting a particular area in a region
and find out the number of shops that can house fruit juices, how many have Real juice in
them, how many have Tropicana and how many have B Natural in them, the activity can also
gather information pertaining to different combinations’ availability.

5.11 MAJOR RIVALRIES OF ITC JUICE

The greatest rivalry to the ITC juice market is posed by products of Dabur and Pepsico. An
outdoor ad for ITC’s B Natural juices read: “We’re inviting Tropicana and Real to join us in
abandoning concentrates. Will the competition join us, be there to see”.

In an out-and-out brand war, diversified group ITC has challenged rivals PepsiCo and Dabur
to make their juices “concentrate free” through prominently displayed hoardings across
markets, even as one of its rivals called it a gimmick.

BRAND WAR: Real vs. Tropicana vs. B Natural

Image Source: www.google.co.in

“We're inviting Tropicana and Real to join us in abandoning concentrates,” screams the latest
outdoor advertisement for ITC's B Natural juices. “Will the competition join us, be there to
see,” it says. ITC foods divisional chief executive Hemant Malik said the firm’s launch of the
‘Say No To Concentrate’ campaign is aimed at “changing the way fruit juices are made in
India”. “Most packaged fruit beverages in the market today are made from fruit concentrates,
which are diluted with water during reconstitution,” he said. The Kolkata-based tobacco-to-
 31

hospitality conglomerate is a relatively new entrant to the Rs 2,000-crore-plus fruit juices and
nectars category led by Dabur with its Real brand. Another significant player in the market is
PepsiCo’s Tropicana. ITC entered the segment in 2015 when it acquired B Natural.

The two rivals are not impressed. “This is a gimmick aimed at spreading misinformation that
fruit concentrates are unhealthy and not made from fruits, which is an utter lie,” said Mayank
Kumar, marketing head — foods at Dabur. He said many of the variants of ITC B-Natural
available in the market are also made from fruit concentrates only. “The way ITC is depicting
its juice, it seems that they are freshly extracted and packed for sale, which again is a
complete lie. Their juices are also manufactured from fruit pulp that is extracted from fruits,
heat processed for preservation and then stored at ambient/cold storages, and then packed in a
Tetra Pak in a similar process as employed by every company,” Kumar said.

Dabur’s Real has 55.4% share in fruit juices and nectars market, an industry official said,
quoting data from research firm Nielsen said. Deepika Warrier, vice president (nutrition) at
PepsiCo, said, “It is important for consumers to be aware that there is no significant
nutritional difference between ‘from concentrate’ and ‘not from concentrate’ fruit
beverages.” She said PepsiCo’s Tropicana range has been offering choices of ‘not from
concentrate’ and ‘from concentrate’ juices to consumers in India for more than a decade. “As
a responsible beverage company, we would urge industry players to join our efforts to make
fruit beverages nutritionally superior with sugar reduction, adding vegetable juices, functional
fortification and driving preference for 100% juices at affordable price points,” Warrier said.
She said PepsiCo has a significant sourcing footprint in India, adding that 65% of all fruits
used in Tropicana juices are sourced from Indian farms. B Natural had launched ‘concentrate
free’ juice last year with 100% pomegranate juice, and ITC said it is now shifting its entire
juices portfolio to the ‘not from concentrate’ range, by leveraging its agri sourcing
capabilities to source fresh fruits from Indian farmers. One of B Natural’s new ads says:
“Dear Tropicana, come join us in making Indian juices concentrate-free. Yours truly, B
Natural.” Dabur’s Kumar said juices made from fruit concentrates as well as suitable
combinations of fruit concentrate and pulp have almost similar nutrition values as those made
from “not from concentrates”.

5.12 TIMELINE FOR ENTRY OF B NATURAL JUICES IN THE MARKET

JANUARY 2015: ITC Foods to focus more on regional markets and flavours

ITC Foods, the food division of Kolkata-headquartered conglomerate ITC, planned to look at
more regional markets and regional-flavoured foods to increase the market share.The move to
look at a regional focus was part of the company's vision to generate revenue of Rs.1 lakh
crore from FMCG businesses alone by 2030.

In a move to increase the share in the food category, the company launched its branded
ready-to-drink juices under the brand B Natural in the South. In May last, the company had
acquired city-based Balan Natural Food Pvt. Ltd.’s B Natural brand. As part of the initial roll-
out, ITC took its branded juices in the southern market. The juices, which were then available
in seven variants, were made available pan-India by March. The company aimed to garner
 32

around 10-11 per cent of the country's branded ready-to-drink juice market within a year of
the pan-India launch. The juices and nectars category in India was estimated to be Rs.2,400
crore, with an annual growth of over 20 per cent. Apart from the juice business, the company
is aiming to enter the dairy business soon.

The company is setting up a dairy plant in Munger in Bihar, which is expected to be

functional within a couple of months. In the initial phase, ITC plans to launch dairy products
such as milk powder and ghee. Eventually, it will launch tetra packed milk, yogurt, among
others.“We are setting up a dairy plant in Munger. We aim to be a comprehensive food
company, and the new products are part of the move,” said Mr. Dar.

FEBRUARY 2015: ITC to launch B Natural fruit juices in eastern, western markets soon

ITC Ltd, which recently forayed into the fruit juices with “B Natural”, is planning to
introduce its offerings in the eastern and western markets soon. So far ‘B Natural’ – a
Bengaluru-based brand that ITC acquired last year – has been introduced in the five southern
States that include Tamil Nadu, Karnataka, Andhra Pradesh, Telangana and Kerala. The
launch in the eastern region – West Bengal, Odisha, Bihar and the North-East – is expected
by February. While in western markets the offerings will be introduced later this year.

With volumes picking up, ITC might explore the possibility of having new manufacturing
units; apart from B Natural’s existing one in Bengaluru. It has a capacity of one lakh litres a
day.

MAY 2016: ITC eyes more than 10 percent market share in packaged fruit-based beverages

Tobacco-to-hotels-to-FMCG conglomerate ITC Ltd, that in January entered the fruit-based

juices and beverages market with the launch of B Natural juices, is eyeing in ecxess of 10
percent market share in the organised juice market currently dominated by Dabur's Real and
Pepsi's Tropicana. The company would be manufacturing the new beverage in its Bengaluru
facility and is looking forward to the opening of ITC's new facility in Kapurthala in Punjab
which can start producing B Natural's new variant once it is operational next year. The
Kapurthala facility will be spread across 70 acres and will entail an investment of Rs 1,400
crore according to the company. ITC food division currently has four manufacturing facility
and Rajesh expects that numbers to go upto 10 in the next couple of years.

MAY 2016: ITC launches 'Punjab da Kinnow' natural fruit juice

ITC's food division launched the first regional variant of its natural fruit beverages -- B
Natural Punjab da Kinnow. The company said the newly added flavour is the ninth variant in
its B Natural fruit beverages series. "ITC continues to endeavour to add value to agri-
produce. B Natural Punjab da Kinnow is the latest step in this direction," said V.L. Rajesh,
divisional chief executive, ITC Foods Division. "This is the first of several such launches
planned that will bring to the fore traditional regional fruits," he added.ITC said that it has
partnered with Punjab Agro Juices (PAJL) to source and process the Kinnow oranges, which
are available only between November and March, from farmers in Punjab, to ensure its year-
round availability across Punjab, Delhi and Chandigarh.The company further said the
 33

beverage will be available at all modern and general trade outlets across Punjab, Chandigarh
and the national capital region in convenient pack sizes of 200 ml and one litre priced
respectively at Rs.20 and Rs.99.

APRIL 2017: ITC Looks To Boost Market Share In Juices

ITC Ltd., which ventured into the Rs 2,500-crore juices market two years ago, plans to
increase its share to 12 percent from 7 percent over the next 18-24 months. The fast moving
consumer goods (FMCG) company which sells juices under the B Natural brand and is the
third largest juice maker, will add more variants over the next two to three months, it said in
an interview to BloombergQuint.

APRIL 2017: ITC aims to corner 20% market in packaged fruit juice in 5yrs

Diversified ITC is expanding its juice portfolio with an aim to garner around 20 per cent
market share in five years in the packaged fruit juice segment, currently estimated to be
around Rs 2,500-crore. Apart from adding new flavours and focusing on local fruits, the
company is expanding its sales network to meet the target.

It has also roped in Bollywood actress Shilpa Shetty as brand ambassador for B Natural
juices and beverages. The Kolkata-based firm also plans to expand retail points of its luxury
chocolate brand Fabelle and take it outside its hotel premises, where it is only available
currently. "We are going to add 2 to 3 per cent market share every year and in next five years.
It should be around 18 to 20 per cent in the next five years," ITC Foods Division Divisional
Chief Executive Hemant Malik told Press Trust of India.

JULY 2018: B Natural Juices & Beverages achieves a Guinness World Record® as part their
B Natural Harman XI campaign

B Natural Juices & Beverages from ITC Foods, after moving away from 'Concentrate' and
shifting its entire portfolio to 'Not From Concentrate' variants, vowed to break records on
fitness goals. The brand brought people together from the state of Punjab and the union
territory of Chandigarh at Niper Auditorium, Sector 67 in Mohali for a Guinness world
records® title for 'the Most people performing jump squats' in a minute with 572 girls
breaking the existing record of 497 achieved by Dubai Fitness Challenge (UAE) in Dubai,
last year.

The achievement is testimony to B Natural's core philosophy of breaking barriers across all
spheres of life. The Guinness world records® challenge was led by Harmanpreet Kaur, Vice-
Captain of India Women's National Cricket Team, in the presence of Sanjay Singal, Chief
Operating Officer - Dairy and Beverages, ITC Ltd.

The record breaking challenge is part of a larger campaign Harman XI - SaacheHunar Di

Khoj, launched by B Natural and captained by Harmanpreet Kaur, who is considered a
harbinger of change. The three-months long contest will invite girls across Jalandhar,
Ludhiana, Amritsar, Chandigarh, Bathinda and Patiala to participate in the contest.
 34

NOVEMBER 2018: B Natural launches the country’s first assorted Fruit beverages and Dry
Fruit gifting pack for Diwali

ITC’s not from concentrate fruit beverage brand B Natural has launched gift hampers
comprising assorted juices and dry fruits.The packs will include the following fruit beverage
variants: one pack of apple, two packs of guava, two packs of mixed fruit and two packs of
mango, in addition to dry fruits like almonds (badaam) and raisins (kishmish).

To further illuminate the festive spirits, consumers can gift their loved ones B Natural’s
unique Lamp of Purity hamper. The unique pack, which was launched last year, has been
creatively designed and packaged with LED lights stored inside the pack.

Besides consuming the popular fruit beverage variants inside, the ornamental outer box can
be transformed into a vibrant lamp and used for decorations during Diwali. These packs
contain three popular fruit beverage variants from the brands portfolio viz guava, mixed fruit
and apple. Hemant Malik, divisional chief executive, ITC Foods Division, said, “Diwali is
one of the most celebrated festivals in India which is rejoiced with great zeal and enthusiasm
across the country.”

“Dry fruits have always been one of the most widely accepted gifts for generations due to its
wholesome goodness,” she added.“Combining dry fruits and fruit beverages elevates the
nutritional quotient of the B Natural gifting range making it a unique gifting option,” Malik
said.“At ITC Ltd, we take pride in crafting products that touch consumers’ lives and add
value to their thoughtful gestures. We are confident that B Natural’s assorted gift offering this
Diwali will revitalise families with wholesome goodness and positive festive spirit,” he
added.

Diwali Festive Delight gifting packs are available for purchase across all modern and general
trade outlets across Delhi, the National Capital Region (NCR), Punjab, Uttar Pradesh,
Madhya Pradesh, Maharashtra and Gujarat.These packs will be also available in prominent e-
commerce platforms, like Amazon and Flipkart across the country.

MAY 2019: B Natural launches new range of PET beverages

ITC’s foods division has announced the launch a new product offering from its B Natural
range of fruit beverages.According to a release, the brand has rolled out India’s first packaged
‘Premium Fruit Beverages’ in an environment friendly recyclable Aseptic PET Bottles with
no added preservatives.COO – Dairy and Beverages, ITC Limited, Sanjay Singal and brand
ambassador Shilpa Shetty Kundra unveiled the new products at the launch event, stated the
release.The new range will comprise of three variants – Himalayan Mixed Fruit, Ratnagiri
Alphonso and Dakshin Pink Guava and are priced from Rs 40, it added.

COO – Dairy and Beverages, ITC Limited, Sanjay Singal, said, “This product range is unique
and unlike any of the offerings currently available in the packaged fruit beverages aisle. In
line with B Natural’s ethos…(the) range of fruit beverages made from fruits, packaged using
the most modern and safe beverage technology of aseptic PET which ensures that the
beverage is made without any preservatives.”
 35

5.1.3 CAMPAIGN LOGIC: B NATURAL

An extensive advertising campaign was followed by ITC to promote B Natural. Business

Today, a leading magazine of this industry advertised it in the following manner. Whether it
is a fizzy drink, fruit concoction or a powdered juice, summer brings with it a barrage of
advertising from the cold beverages stable, and no year is different. What stands out,
however, is the yin-yang phenomenon that is presently noticeable in the Rs 1,000-1,200 crore
branded juice segment, thanks to one brand that is swimming against the category.

ITC entered the branded juice market with B Natural, the fruit juice brand it acquired a year
back from south-based Balan Natural Food, and recently broke its first ever advertising
campaign post acquisition. While the two dominant players in the category - Dabur's Real
and Real Activ (55 per cent market share) and PepsiCo's Tropicana (30 per cent market
share) - have captured the healthy/fresh fruit positioning, ITC has explicitly focused on a
disparate plank for B Natural's launch: taste.

Image source: Business Today magazine

The reason? "Every fruit drink has the inherent goodness of fruit, which is a base level
expectation of every consumer. Great taste, however, is a differentiator," explains Sandeep
Shivaram Upadhyaya, marketing manager, new categories, foods division, ITC. B Natural,
therefore, has seven flavours to bolster its taste premise. While the new packaging and
product was rolled out in the South in January, 2015, it has now been taken to other regions.
A TV commercial crafted by Grey Group shows a central character, Sangram Singh, as a
stern palace guard who has never displayed emotion, but on consumption of B Natural, he
spontaneously and unabashedly displays expressions to demonstrate that he is enamoured by
its taste. 'Can't hide the taste' is the rather self-explanatory baseline that the brand has stuck
to. The commercial, which has been dubbed in regional languages and is supported by press,
radio and digital advertising, targets the SEC AB segment. The brand wants to rope in the
everyday consumer who is concerned about his health, but is not fanatical about it.
 36

B Natural's launch communication has three primary deliverables: a simple brand story,
conveyed with a singularity of messaging (taste) and be noticed. An initial marketing budget
of Rs 5-10 crore has been allocated for B Natural, according to sources. Fruit juice
consumption in India is still driven largely by in-home consumption at unbranded fruit juice
stalls.

The packaged, branded juice market is nascent unlike the West, and category penetration is a
low 5 per cent, growing at a CAGR of 8-9 per cent. The lack of awareness has been a key
issue, but increasing health and hygiene awareness is playing a role in propelling the
category. "There is literally a fruit iceberg under us, as the category is poised to explode,"
says Ram Jayaraman, executive creative director, Grey Bengaluru.

The brand has taken quite a risk though, in a low-awareness category, by ignoring the health
parameter for an otherwise generic quality as taste. But ITC is of the opinion that while
quality needs to be communicated, the plank of health is a given when one talks of fruits.
And a typical Indian will anyway never give up taste for what he perceives to be healthy - an
example being how most international health food chains have had to 'Indianise' their menus
to suit the nation's inherent need to satisfy the palate first.

ITC's plan, therefore, is not to veer away from health, but to focus more on taste which is key
to the Indian palate. "Unbranded juices are popular despite hygiene concerns of the glasses
they are served in, etc, simply because of how delectable they are," says Jayaraman. "No one
in this category has spoken of the visceral reasons to have juice, which is where B Natural
steps in." Grey has chosen a fundamental truth as its communication insight: that when you
have something delicious, it shows on your face. The agency then wanted to show
expressionless archetypes - people with deadpan faces - responding naturally to this juice. A
smart strategy to blaze its own trail away from category leaders? "ITC's usual tactic, when it
enters a new category, is to take on a basic category benefit to begin with," says Anustup
Datta, director, brand and business strategy, Vertebrand Management Consulting.

It doesn't look for layered benefits. Experts do, however, suggest that another key area which
the brand could target in its next communication could be specifically wooing the youth.
Branded fruit juices are seen to be serious, only for those who are health conscious, implying
those who are 30-plus, perhaps. The youth, typically, have taken to colas, fruit drinks, etc.
The branded juice category needs to be, therefore, repositioned, if it is to appeal to youth,
advises Datta.

The juices market as a whole is growing at about 15-20 per annum, led by a growing
population of health conscious consumers. As the market isn't cluttered with too much
competition - given the fact that it is dominated by only two players - ITC has gone the whole
hog with 'desi' flavours to do the trick of expanding the market. These flavours are called
Mixed Fruit Merry, Guava Gush, Litchi Luscious, Orange Oomph, Mango Magic, Pineapple
Poise and Jamun Joy - clearly an appeal to suit the local Indian palate. What analysts are
waiting to see is whether ITC's maiden attempt at branded juices proves to be a strategic
move to grow its share in the overall food and beverages segment.
 37

What’s equally interesting about the campaign is the move to educate the consumers about
juices made from concentrate. When part of the water, says the print advertisement, is taken
out from the fruit juice or pulp by heating, it becomes a concentrate. B Natural, ITC lets on, is
made directly from pulp and not from concentrate. While the effort clearly is to show juice
made from ‘no concentrate’ is a better option — something similar to what Amul did a few
years back when it exposed that the ice-cream made by its rival was not made from milk but
milk powder — ITC insists that it is not taking a dig at its rivals. ITC, reckon marketing
experts, has scored a bull’s eye with the campaign.

Consumers have long been deluded with erroneous perceptions claimed by brands or
otherwise. The juice category too has been obfuscating like many other branded packaged
foods. There is pure juice, juice made from concentrates and nectars. Usually, all are packed
in tetra pack cartons and consumers haven’t really internalised the difference between these
nomenclatures.

There is a huge opportunity for truth-based brands. When a brand such as Patanjali punctured
myths about products across categories—from honey to oil—consumers flocked to the brand.
There are other precedents as well. While Tata iShakti (now Sampann) unpolished dals
created a new awareness about the category, Darshan Patel’s ‘bina gas waala’ Fogg
deodorant made people take notice.

The Indian fruit-based beverages category has grown at a CAGR of over 30% over the past
decade. At present, the Indian packaged juices market is valued at INR 1100 crore and is
expected to continue growing at a fast pace. (Source – Technopak report on the Indian Juices
Industry). Dabur is the market leader with over 50% of the market share but it gets stiff
competition from PepiCo’s Tropicana brand which has close to 30% share. Coca-Cola’s
Minute Maid brand has also emerged as a contender chipping away at the market share of
other players but is yet to make a major dent on the top two. A number of regional and small
players also have importance in different regions. Incidentally, a local player is exactly what
B Natural was. Yet with the increasing number of players, there is still a pie big enough for
everyone because of the growing tendency among urban populace to prefer juices over
carbonated drinks. The primary reason for the same is that even after their presence in the
market for so many years, they are still seen as unhealthy options.

If we look at the company’s pedigree though, it definitely doesn’t seem like doom and gloom
for them. They have traditionally shown an ability to differentiate their products from the
crowd. Their distribution network which is amongst the best in the country coupled with the
trust and the goodwill they have generated over the years ensures that not only will their
products get decent shelf space, consumers will also be willing to try them at least once.
 38

6. FINDINGS FROM THE STUDY

When cigarette-to-food major ITC bought B Natural in early 2014, the idea was not only to
gain a foothold in the fast growing juice market, now pegged at Rs 2,500 crore, but also to
become a force to reckon with. While the idea was compelling, there was not much juice in
execution. Even after three years, B Natural garnered just 6.3% market share compared to
market leader Dabur’s Real with 56% and Pepsi’s Tropicana with 29.3%, according to latest
Nielsen data for year ended March 2017. Though 6.3% might not be bad, things are poised to
turn juicy for B Natural.

The major findings through the study and analysis of project are summarized as follows:

 ITC promoting their brands through advertisement campaign as well as door to door
promotion.

 ITC is also focusing on Retailers and Wholesalers to promote their brand.

 The demand of their product is low as compared to other major competitors, because
people don’t know about their brands very well.

 ITC knows their strength and weakness in the personal care market, so they are
applying new concept to overcome their weaknesses.

 ITC now offering more margins, exiting offers and long credit period to retailers and
wholesalers.

 By rolling out 100% ‘not from concentrate’ pomegranate juice, challenger brand ITC
is taking the fight to the leaders. Its aggressive advertising campaign urges consumers
to opt for a ‘better’ juice brand which is not made from concentrate unlike most of
products on the shelf.

 While the first few years, were all about settling the brand and building awareness,
ITC now plans to embark on a path of creating compelling propositions at an
accelerated pace.

 B Natural too might reap a windfall in terms of more consumer acceptance like many
other truth based products. Conceding that ITC has not been able to make a major
dent in the category so far, ‘zero concentrate’ positioning might turn out to be a
winner. The marketing campaign of the ITC B Natural clearly finds a claim true to
the brand leveraging the ‘natural’ wave blowing strongly in the world of food. This
will tremendously benefit the future of the product.

 The market share that this product claims rests mainly on its truth- based brand nature
of being cent percent fruit with no concentrate. This is due to the inclination of
customer towards brands with greater natural ingredients in the current market trend.
 39

7. RECOMMENDATIONS FOR FUTURE SUCCESS

OF B NATURAL
According to the study conducted and after analyzing the Price, Promotion, Place and
Product of the ITC and the consumer behavior in the market the company can implement the
following measure for increasing the sales and volume of their products:

 Advertisement for the B Natural is found to be ineffective and infrequent. So, the
company can come up with an aggressive advertisement campaign to attract the
consumers belonging to various sections of society.

 ITC can also focus on associating with small format retail stores like HUL’s Super
Value Stores, Dabur’s Parivaar and Marico’s Mera. The counter can be modified into
a C shape, signifying the C from the ITC group so that the shopper can move and pick
items just like that of the large retail stores.Process optimization for product
development in beverage industry.

 Impact of measures for reduction of energy consumption and consequent impact on

the cost of production of goods.

 Relentless focus on delivering superior quality products to consumers remains a key

source of competitive advantage for the Branded Packaged Foods Businesses. In
addition to delivering a superior product, ITC should also focus on advertising the
benefits that it provides through domestic agri-value chains.

 ITC has recently partnered with RailYatri mobile app to make the snacks and B
natural directly available through the online portal. Extending the partnership through
such initiatives and internet platforms will help to increase the accessibility of the
product for travellers in railways and airlines.

 ITC can use their extensive distribution network which caters tobacco products to
reach out to various potent places. The incentive paid to the salesman can enable him
to carry a sales beat at least a day before that of the competitor.
 The extensive distribution network that ITC possesses can be used to make B Natural
reach the nook and corner of our country. B Natural should be bundled along with
some of the most successful brands of ITC which have a greater penetration
especially in regions of North and West.

B Natural too might reap a windfall in terms of more consumer acceptance. Conceding
that ITC has not been able to make a major dent in the category so far, 'zero concentrate'
positioning might turn out to be a winner. The challenge, however, for B Natural would
be to match its aggressive intent with marketing and distribution. Another factor to
contend would be the reaction of the rival brands who might find themselves in a spot of
bother as 'no concentrate' campaign questions the 'quality' of their offering. The future of
the product seems promising.
 40

8. CONCLUSION
ITC Ltd’s acquisition of Balan Natural Food and their decision to reintroduce B Natural as an
ITC brand has been followed closely by professionals in the branded foods sector. The
decision in itself was not surprising, after all ITC’s former CEO Y.C. Deveshvar had left little
doubts about the fact that he wanted to see ITC at the top of the FMCG pile even without the
reliance on their tobacco business. An entry into the branded juices sector was one that fit
right into ITC’s long term strategy. But the decision to go the ‘acquisition route’ was a bit
different from the organic brand building that ITC had done over the last 10 odd years.
Perhaps the company saw the brand’s DNA a natural fit with their current portfolio or
perhaps the perception about the brand in its existing market matched what ITC had sought to
do at a national level with their own offering.

Building a new brand isn’t easy but the kind of market disruption that an in house brand can
achieve is difficult with an acquisition. But if there is synergy between an acquired brand and
the company, as there seems to be in this case, then the acquisition can become a force in its
own right. Balan Foods brings extensive category knowledge and that coupled with ITC’s
traditional strengths can be a winning combination. ITC’s decision to focus on regional
flavors as well as allowing the product to grow further in its traditional market before
launching it nationally, also seems like a smart strategy. The signs are pointing in the right
direction and this FMCG enthusiast will not be hasty enough to pass judgment on the product
until a full blown integrated marketing campaign is there to educate us further. Till then, it
shall remain a waiting game even if the pros seem to outweigh the cons for B Natural at this
juncture.
 41

REFRENCES

 Company History - ITC Ltd. Economic Times.

 History and Evolution. ITC Limited.
 The ITC Network: Registered Office. ITC Ltd. Retrieved 14 June 2014.
 ITC Announces Fourth Quarter and Fiscal Year 2018 Results"(PDF). itcportal.com.
ITC. 4 February 2019.
 ITC - History and Evolution. www.itcportal.com.
 ITC History | ITC Information - The Economic
Times. economictimes.indiatimes.com.
 100 years of ITC: Corporate India's big success story. Rediff.
 Euromonitor International - Log in. www.portal.euromonitor.com.
 Mukherjee, Writankar (4 August 2012). "ITC inducts Meera Shankar in its board as
the first women ever". The Times Of India
 https://www.quora.com/Are-packaged-juices-good-for-health
 https://timesofindia.indiatimes.com/life-style/health-fitness/diet/is-packaged-fruit-
juice-healthy/articleshow/15529421.cms
 https://www.goldsteinresearch.com/report/india-fruit-juice-packaging-industry-market
 https://www.academia.edu/6381614/CONSUMER_BEHAVIOUR_FOR_FRUIT_JUI
CES_MARKET_IN_INDIA
 http://www.technopak.com/Files/packaged-juice-market-in-india.pdf
 http://www.fnbnews.com/Beverage/indias-packaged-juice-market-has-huge-
untapped-potential-38596
 https://www.asiafoodjournal.com/2016/05/india-rise-packaged-fruit-juices/
 https://economictimes.indiatimes.com/industry
 ITC ltd: Reports and Accounts 2019