Kolkata-based herbal and natural consumer goods company Emami has announced its latest investment bid for domestic company Axiom Ayurveda. While all recent acquisitions have been for companies that produce related products that help expand Emami’s existing portfolio, this purchase of a 26 percent stake in Axiom is an opportunity for Emami to tap into the country’s fast-growing fruit juice market. It announces the advance.
Ambala-based Axiom started its operations in 1995 and used to manufacture Ayurvedic nasal sprays and beauty products. Since then, the company’s herbal juice business has undergone a makeover, with his 2009 launch of the brand His AloFrut.
But Emami’s efforts to break into a new territory, the local fruit juice market, where there is already fierce competition for market share, are not without merit. The market is already saturated and there are a few big brands with plenty of power. But experts say it’s the incredible growth rates that are driving the scale of companies like Emami that are attracting so much attention. While the overall FMCG market is growing at a tepid pace in the low single digits, the fruit juice market is expanding at a CAGR of 14-15 percent. According to industry estimates, the Rs 22,000-crore market is expected to reach Rs 30,000-crore by 2027.
Additionally, healthier options are rapidly growing within the fruit juice category. Harsha V Agarwal, vice chairman and MD of Emami, said that with health and wellness being a buzzword for consumers, management foresees “tremendous potential in this space”. . “We are excited to join this category, which not only has synergies with our existing businesses, but also aligns with our corporate growth strategy of investing in categories and brands that offer growth potential,” he said. added.
Emami could eventually increase its stake in Axion to 50% (from 26% currently), said NH Bhansali, Emami’s chief executive officer of finance, strategy and business development and chief financial officer. It all depends on Arofruit’s success in the coming years, but Emami’s attempts to grab a piece of the pie are not without hurdles.
The Rs 22,000-crore market is fragmented into thousands of local fruit juice shops, which together account for nearly 82% of sales. The remaining Rs 4,000 crore will be distributed among three major FMCG companies. Dabur India’s brand REAL is the market leader with almost 60% of the branded fruit juice market share in its kitty. ITC’s B-Natural (the second-largest company) and PepsiCo’s Tropicana own most of the rest. Additionally, there are many of his domestic D2C and regional brands, including AloFrut.
“It will not be easy for brands other than the top three, which account for more than 85% of the branded juice market, to break into the top league. However, with time and effort, they may be able to capture a significant share. ” a senior executive at a top branded juice maker told Business Today.
