Preliminary Market Study to Start Fruit Juice Manufacturing Business in India

India is the second-largest fruit producer in the world after China. In FY 21, the total fruit production in India amounted to 102.7 million tonnes, marginally growing up by FY 20. In the past 5 years, the total fruit production in India has grown at a CAGR of 2.6%. Major categories of fruit produced in India include (not in that order), Mango, Banana, Citrus, Guava, Papaya (etc.)

Despite being one of the largest fruit producers in the world, the rate of processing is low in India. 2.2% of the total fruits and vegetables produced in India are processed, which is much lower than China (23%), the USA (65%), and the Philippines (78%). Lack of concentrated policy efforts in the past, limited knowledge amongst farmers, and poor segregation facilities at the source have been inimical to India’s fruit processing business such as juices, concentrates, canned fruits, etc.  

However, this is altering now. Evolving consumption patterns in conjunction with better policy and R&D support is driving demand for processed fruit categories such as juices. Consumers increasing concern for health and diet is leading to the popularity of fruit juice which has become a popular product of the beverage industry compared to other packaged drinks. Consumers in India are now increasingly drawn towards fresh fruit juices rather than carbonated drinks. 

The Indian fruit juice market is currently sized at over USD 6 billion, out of which around ~ USD 700 million is exported. The consumption of packaged fruit juice is quickly growing and the market of packaged juice is projected to witness substantial growth in the coming days. India’s market is expected to grow at the rate of 25%-30%. 

Scope for Fruit Juice Businesses

The fruit juice manufacturing business in India is a viable opportunity for entrepreneurs and investors.  The fruit juice manufacturing business has a trusted value-added market, making it a profitable proposition. It can render elevated ROIs at a relatively lower investment. 

The fruit juice market is still untapped in India and there are very few big players, which means there is enough space for emerging players to start and scale-up. Besides fruit juice manufacturing, other ancillary businesses such as fruit juice concentrate manufacturers and retail chains are also attracting a lot of investor interest. 

Process for Setting up Fruit Juice Manufacturing Business 

Market Research and Analysis: As the initial step, potential investors should carry out extensive market research to understand fruit juice consumption in India. 

A primary research technique such as a market survey can help in learning a lot about consumer attitudes and attributes. If the business would like to learn more about the underlying behavior of their consumers, qualitative methods like Focus Groups can be conducted. The research can either be done by the investor itself or with the help of a professional research agency. 

Overall market research can offer a lot of market insights on consumer behavior, market segments, price points, etc. It can also help in building the ICP (Ideal customer profile) based on the examination of numerous parameters such as demography, income group, social profile, etc. 

Market research should also be complemented with a robust market analysis. This will help in knowing the size of the overall market, market trends, market growth rates, demand forecasting, etc, thereby giving a complete idea to the investors/ business about the industry. 

 Additionally, investors should also check the availability of the fruit whose juice they wish to sell. If that fruit is abundantly available in that area, then it will be easy to set up the juice manufacturing unit. Individuals also need to check the availability of the packaging material and availability of the other related items.  

Identify the Appropriate Location: Finding the right business location is vital for starting a fruit juice manufacturing business. Investors should allocate separate space for production, storage, office operations, etc. It is advisable to prefer locations where one can get quick access to manpower, transportation facilities, along with other utilities like power and water facilities. One should start a business in a rental place instead of purchasing land, as it will considerably decrease the start-up budget.

Licenses and Registration: Investors while starting a fruit juice manufacturing business need to obtain some registration and licenses that are mandatory. 

• Registration of firm
• FSSAI License
• GST Registration
• Business License
• Trademark Registration
• Registration under Shop and Establishment Act

Equipment Required for Fruit Juice Manufacturing Business: According to the desired production quantity, investors will need to purchase the required machinery and equipment. Depending on the type of juice investors wish to extract and sell, they have to set up either a semi-automatic or fully automatic juice extraction unit. However, if there is no prior experience in the fruit juice business, then one should opt for semi-automatic arrangements. This will help to get an idea about the practicalities and subject in a better way for further enhancement. Some of the essential equipment includes:

• Juice extractor
• Measuring cylinder
• Strainers
• Capping machine
• Scales
• Thermometer
• Bucket
• Cleaning equipment
• Gas cylinders with burners    

Procurement of Raw Materials: The procurement of raw materials is a challenging task for the fruit juice manufacturing business. Depending upon the type of juice to be manufactured, one will need to procure fresh fruit. (For fruit juice manufacturing one would need fresh and matured fruit with high juice content. The fruit should neither be raw nor very ripe.)

For example, if the objective is to set up an apple juice manufacturing business, then one has to pick up good quality fresh apples. As fruits are highly perishable, one should not stock large quantities but should have a regular supply of apples in their manufacturing system. 

Hiring Talented and Experienced Resources: Individuals starting a fresh juice manufacturing business will require hiring skilled and experienced manpower for various operational activities like production, accounting, HR,  purchase, as well as marketing. Employing skilled and talented staff in all the major departments will ensure the smooth functioning of the entire business. Businesses need to be cautious while hiring workforce for different departments, as selecting an inexperienced workforce might be counterproductive. 

Investment Cost & Pricing Estimation: Businesses foraying into fruit juice manufacturing need to consider the fixed and operational costs that they will have to invest in for running the business. Fixed costs will comprise real estate price, construction, machinery & equipment cost, manpower hiring charges, etc. Operational costs will include packaging material, procurement of raw materials, employees' remuneration, etc. Businesses need to plan for everything according to their budget. Likewise, they also have to think about the optimal price of their packaged juice, following the estimation of all the essential costs. 

Marketing & Distribution of Fruit Juice: Finally, investors need to come up with an exhaustive marketing plan for their juice products. Durable and attractive packaging is vital for the fruit juice business. Besides, the business will also need to focus on the wide distribution network. firstly, they should concentrate primarily on the local market and then chalk out a gradual scale-up plan. 

Businesses should also make sure about the availability of their product in most of the possible retail locations such as grocery stores/hypermarkets/ high street/ malls/ F&B outlets, etc, as this will ensure success for the fruit juice business.  

To quickly gain initial market share, brands can look into aggressive promotional strategies such as free sample distribution, discounts, coupons, etc.  In the current time, it is critical to also build a comprehensive digital marketing plan along with regular strategies. Retail brands such as packaged juices should prepare elegant and attractive websites, aggressively work on their social media platforms, and ink tie-ups with e-commerce/ e-retail platforms. 

How The India Watch can Help? 

The India Watch is an India-focused marker research and business research advisory. We offer custom research solutions to investors/ retail companies/ manufacturing companies, etc. Alongside a host of numerous sectors, we have a strong understanding of the Indian food and agribusiness segment. 

• We can conduct preliminary studies/ pre-feasibility studies/ feasibility studies for new business ventures. 
• We can conduct market surveys, focus groups, interviews, etc. on behalf of retail brands to learn more about customer attitudes, attributes, underlying behavior, etc. 
• We can conduct exhaustive business research exercises for retail companies (as well as investors, trade associations) and render a host of powerful insights and data on market size, industry trends, policy frameworks, growth estimation, ideal consumer profile (ICP), demand forecast, etc. 
• We can help with business plan formations and growth strategy advisory for fruit juice and other retail companies looking to grow and expand in India. 
• We can offer tailor-made logistics research that can help upcoming ventures to streamline their supply lines. 
• For any further queries, feel free to drop us a mail at info@theindiawatch.com