SWOT and PEST

Analysis of Dabur Real

Juice

Word Limit:1936

Abhishek Bhatnagar (15P003)

Atul Goyal (15P013)
Himanshu Shekher (15P023)
Rupsi Das (15P043)
Surbhi Jain (15P053)
Yashas Gupta (15P060)

Table of Contents:Introduction

SWOT Analysis
Strength

Weakness

Opportunity

Threats

PEST Analysis
Political

Economic

Social

Technological

10

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Introduction
Indian packaged juice market has been steadily growing. Increasing awareness
against harmful effects of carbonated drinks has shifted the consumer base towards
packaged juices. The growing fitness trend has popularized the concept of juice
consumption. Different companies are not only targeting the Indian children but are
also targeting fitness enthusiasts. More companies are entering in this market with
variety of flavours and different strategies to gain market share.
REAL
Real is one of the earliest entrants in fruit juice industry. Since being introduced in
1996, it has been the preferred choice of customers for a long time, which is
indicative in it having a maximum market share of 55% in the packaged juice
industry.
Its success can be validated by the fact that Real has been awarded Indias Most
Trusted Brand status for four years continuously. It has 14 flavours available in the
market, including both traditional (mango, guava, litchi etc) and international flavours
like cranberry, tomato, peach etc.
The nutritional contents of Real Fruit Juices & Nectars are endorsed by PFNDAI
-- Protein Foods & Nutrition development Association of India.
ACCOLADES FOR REAL

Indias No.1 fruit juice brand

Voted as Super brand
Voted by consumers as the most trusted fruit juice brand
Awarded the Readers Digest Trusted Brand Gold award in the food and
beverages category.

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SWOT Analysis
Strengths

Weaknesses

Strong brand name of the parent

Seasonal nature of raw material.

company

Low capital intensive industry

One of the earliest player in

branded packaged juice segment

attracts new entrants.

in country.

Government regulations and food

safety standards.

Market leader in the packaged

juice segment

High number of variants for

different target audience

Strong supply chain and logistics

Strong advertising and media

programme

Opportunities

Threats

Fast growing segment

High inflation in food segment.

Untapped market in rural and semi

Increasing awareness towards

urban area

Introduction of New Variants

harmful effect of preservatives.

Intense competition from local

manufacturers.

1. STRENGTH
1. Strong Brand Strong brand name of the parent company
Dabur is the fourth largest FMCG companies in India. The company has a
legacy of more than 120 years.
2. One of the earliest player in branded packaged juice segment in country.
Dabur launched its Real Fruit Juice product in 1996. There were very few
players in the country at that time in the particular segment.
3. Market leader in the packaged juice segment

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Real is the market leader in branded packaged fruit juice segment. It accounts
for ~55% of the total market share, and is followed by PepsiCo with a ~30%
share.
4. High number of variants to cater different target audience.
In the JUICES range Dabur has:
Coolers (Low fruit Content)
Real ( High fruit pulp Content)
Real ACTIV (Health Conscious Youth)
Real Juniors (for the children below 6 years of age)
There are more than 15 flavours in each of the category. Large range helps
cater different needs and has helped Real to maintain its dominant market
share.
5. Strong supply chain and logistics
Dabur has wide and integrated distribution network. Dabur has improved
distribution system through its Retail Excellence program, DARE (Driving
Achievement of Retail Excellence) .Its Direct Shipment Strategy bypasses
warehouses and distribution centres and delivers products directly to the
retailers.
6. Strong advertising and media programme.
Dabur has a great advertising and media programme for Real brand with an
expenditure of the tune of 150 crores.
2. WEAKNESSES
1. Seasonal nature of raw material
Production of fruit is seasonal. There is a need of storage, which requires
technology like cold storage, freshness lock methods etc. It increases the cost
of inventory and decreases the profit margin.
2. Low entry barrier industry.
Fruit juice industry is comparatively less capital intensive industry. It is
comparatively easy to set up the manufacturing unit.As a result there are
huge number of players in this industry including, Appy, Mazza, Minute Maid,
Slice, Fresh Gold, and Del Monte.
3. Government regulations and stringent food safety standards.
There are lots of regulations and food safety standards applicable to the fruit
juice industry. Regulation specifies exhaustive list of materials, which can be
used for packaging. Permissible preservatives and level of preservatives are
also to be strictly adhered to. These regulations are country specific and there
is a huge variation the safety standards across the globe
3. OPPORTUNITY
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1. Fast growing segment

The fruit-based beverages category is one of the fastest growing categories,
and 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 (~USD 200 million)
and is projected to grow at a CAGR of ~15% over the next three years.
2. Untapped market in rural and semi urban area
Residents in these regions still prefer fresh juices over packaged ones as they
are comparatively cheaper and also in sync with the traditional belief that
juices are best consumed freshly pressed .Given the changes in lifestyle and
growing affluence rural and semi urban areas can be a huge market.
3. Introduction of New Variants
Consumers are seeking unique fruit flavors apart from the usual mango,
orange, or lime-based fruit juices. There is a huge scope to introduce much
sought after unique flavours like dates, figs, raisins, almonds, kiwi, or
combination of these etc. These flavours are high in demand due to the
nutritive benefits provided by them.
There is a huge untapped area of packaged branded herbal juices like that of
aleo vera, bottle ground, bitter ground etc. If the herbal range can be
leveraged with the juice segment, it will open a huge area of opportunity for
the brand.
4. THREATS
1. High inflation in fruit & vegetables prices.
Prices of the fruit and vegetables have been continuously increasing and have
seen a growth of around 30% in last five years. Two main reasons are the
change in climatic conditions and decreasing agricultural land.
2. Increasing awareness towards harmful effect of preservatives.
With the increasing awareness among customers with regards to
preservatives and ingredients that could be dangerous for prolong
consumption; it is easy to lose the trust of people in the brand
3. Intense competition from local manufacturers.
There is a huge percentage of the population who still favours freshly brewed
juice over packaged juices. The presence of local players is more visible in
semi urban and rural market.
PEST Analysis
1. POLITICAL
1. Trade restrictions and tariffs.
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Regulated by Department of Commerce and World Trade Organization. Under

the Doha Round WTO - Agricultural subsidy limited to 10% (developing
nations) of 1987 agricultural output. By virtue of peace clause, subsidizes
have been extended to 2017. The amount of subsidy affects the competitive
price at market.
2. Initiatives taken by the Government of India.
Mega international food park, Punjab
Ministry of Food Processing Industries has a scheme for human resource
development (HRD):
o Creation of infrastructure facilities Entrepreneurship Development
Programme (EDP)
o Food Processing Training Centres (FPTC)
o Training at recognised institutions at State/National level

The Food Safety and Standards Authority of India (FSSAI) issued the Food
Safety and Standards (Food Product Standards and Food Additives).
Enhance the incomes of farmers and export of agro and processed foods
among others.

3. Taxation Policy
Under the Make in India campaign the government has provided the following
tax exemptions:
100% tax exemption has been provided for 5 years for new companies
involved in preserving, packaging and processing of horticulture produce
Business permitted 100% deduction on expenditure for setting and operating
cold storage and warehouse
2. ECONOMIC
1. GDP Growth.
As per the International Monetary Fund (IMF) report India will be the fastest
growing major economy in the world in terms of GDP. If this positive outlook
on the economy is translated into actual growth then it will lead to more job
creation.

Real GDP Growth Rate (in%)

15
10

8.5

10.3
6.6

5.1

6.9

7.4

FY 14

FY 15

0
FY 10

FY 11

FY 12

FY 13*

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Chart 1: Real GDP Growth Rate (Source: CSO, RBI)

*The GDP data of FY 13 onwards has been presented as per the new series
2. Upward Movement in IIP.
The Index of Industrial Production (IIP) had been almost stagnant for most of
the financial year FY15 and had even entered negative zone for October
2014. But, it has started showing revival over the past few months.

IIP growth (in%)

6
4
2

3.9
2.5
0.5

1.7

2.6

2.1

0.4

0
-2
-4
-6

-4.2

Chart 2: IIP growth trend (Source: CSO Estimates)

3. Easing Monetary Policy.
As CPI inflation has cooled down to about 5% from double digit, RBI has
reduced key interest rates by 50 bp and further rate cuts are expected in the
near future. This will encourage investors to invest more.
4. Uniform Tax.
Implementing GST will lead to an integrated Indian market and will help in
creating uniformity in tax collection.
5. Sops in Tax.
Relief has been provided in service tax to pre-cold storage service providers
in the Union Budget 2015[2]. This will help food processing companies as it will
lead to decrease in the cost in upstream sector.
6. Increase in Rural Income.
Public investment in infrastructure projects, MNREGA scheme and better farm
yields will lead to higher income among the rural population.
As all the above mentioned macroeconomic indicators are improving, soon there will
be an upturn in the economy. Low inflation combined with more jobs will translate
into more disposable household income which will lead to more demand among
consumers. This provides an excellent opportunity for packaged food companies to
cash in on the rising income level of the consumers.

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3. SOCIAL
1. Inclination towards nutrition.
People are becoming more health conscious. Real grabbed this cue and
focused more on nutrient aspects of packaged juices. Real has become the
youngest brand of Dabur to cross 1000-crore turnover mark.

2. Social Initiatives.
Real has also been involved in several initiatives that can strengthen their
brand image. For example, through their Dil Se Dua campaign, they intend to
fight malnutrition. Under this campaign, they also honoured unsung heroes
like policemen, nurses, traffic cops and municipality workers.
3. Demography.
As per the 2011 census the percentage of population of India in the age group
of 10 years to 24 years is 30.5%. In India, the influence of younger population
in the decision of choosing a brand has grown significantly. Their product and
campaigns have been targeting this younger population of India.
4. Rural Population.
To tap rural demand Real has continued its Project Double campaign through
which they have increased their rural reach to 44128 villages.
5. Fear in consumer surrounding food processing industry.
Real has previously been associated with controversies such as quoting false
manufacturing dates and substandard products. This may have a negative
effect for Real.
4. TECHNOLOGICAL
1. Rise in internet users.
With the growing number of internet users, web based marketing has become
an alternate channel to connect with the consumers. The ecommerce
business has provided convenience factor for the consumers.
2. Supply chain.
Through Order Capture System, Real utilizes smooth interface with supply
chain.
3. Use of technology in Marketing through Nivesh.
Nivesh is a hand held device. It provides real time data on purchase tends in
outlets. It frees up field sales representatives to work on marketing. It also
assists managers to intervene in real time.

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4. Information Technology in Sales.

Information technology has become key instruments for ease of doing
business. Dabur has initiated Project Disha for this reason. They are using
different software like dristi that aims to homogenize different business
processes.

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