Juice& Beverage Industry, A Potential Emerging Sector

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We’ve a definite food habit which may little differ according to the local geographic variation. Almost all of us are habitual of taking same kind of food. Nevertheless we occasionally taste foreign food items in different restaurants. So different foreign food companies started their business in Bangladesh. Beverage industry is one of them. But more interestingly we don’t know beverage is also our cultural food because beverage doesn’t mean only carbonated drinks. Yoghurt, soup and lacchi are also beverage of our tradition which we consumed for last 100 years. But carbonated beverage is new in Bangladesh. It entered into our market in the later part of 1980. At that time there were only few companies in Bangladesh. But by the change of time and western culture influences it’s become very popular in Bangladesh. By year 2000 more than 12 Beverage Company operating business in Bangladesh and most of them are foreign companies.

Classification, Market Share and Growth of Beverage Industry
The beverage industry consists of two major categories and eight sub-groups. The nonalcoholic category is comprised of soft drink syrup manufacture; soft drink and water bottling and canning; fruit juices bottling, canning and boxing; the coffee industry and the tea industry. Alcoholic beverage categories include distilled spirits, wine and brewing. Euro monitor International identifies Bangladesh as one of the 20 Markets of the future that will offer the most opportunities for consumer goods companies globally. Public sector’s contribution in beverage industry is 38 percent. Quantum Index of Medium and Large-Scale Manufacturing Industry by Major Industry Group show a rising trend till FY 2013-14 and after that it shows a downward trend. In manufacturing industry, share of beverage industry is 0.3 percent. Growth rate of beverage industry in FY 14-15 was 28.1 percent and it is projected at 8.2 percent in FY 15-16.

Economic Contribution
Soft drinks and Beverage market value amounted to US$235 million in 2013 after registering a CAGR (Compound Annual Growth Rate)of 18% in value terms since 2009. Juice (CAGR 23%), bottled water and sports and energy drinks (19% CAGR each) and carbonates (16% CAGR) were the most dynamic soft drinks categories. It is forecast that soft drinks will see a value CAGR of 15% over 2013-2018.

glasses of sweet water with ice cubes

Market Scenario
The market structure of the beverage industry in Bangladesh is oligopolistic with few firms dominating the market. They are Transcom Beverage Limited, Partex Beverage Ltd, Akij Food & Beverage Ltd, Agricultural Marketing Company Ltd (AMCL), Globe Soft Drinks Ltd. The beverage market is dominated by Transcom Beverage Limited with the 41.10% market share. Coca Cola is holding 28.40% and 11.50% market share is being held by Akij Food & Beverage Ltd as per data obtained from Nielsen Report dated February 2015. Pepsi, 7UP, Mirinda, Slice, Mountain dew, RC Cola, Virgin, Uro Cola, Coca Cola, Sprite, and Pran Cola are the major producers of soft drinks in Bangladesh. The other beverage producers are Akij Group (Speed, Wild Brew, Firm Fresh, SPA, Mojo, Clemon, Lemu, Fruitika), Agriculture Marketing Company Limited (Pran), Partex Beverage Limited (RC Cola, RC Lemon and Lychena) and Globe Soft Drinks Limited (Uro Cola, Uro Lemon). The market share of the soft drinks in Bangladesh, Coca Cola has now positioned itself as the top brand. According to a survey carried on December 2014, Coca Cola’s market share in Bangladesh is about 60.30% while for Pepsi it is 13.10% and for Mojo it is 23.60% (only cola). The survey has also revealed that 56.20% market share is occupied by Mirinda, 30.10% is occupied by Fanta and rest of them by others. If it is categorized by clear beverage items then 48.20% market share is occupied by 7up, 18.30% is by Sprite, and 14.30% is by Pran up. The survey also reveals that 50% of the market is occupied by international brands while the rest of 50% by local brands. In terms of juices, Pran has already earned a good reputation but its cola drink has yet to make its position. Mojo is another brand expanding in a rapid rate as it is the symbol of the young people and the bottle size is appropriate to the customers and now a day’s others are following their norm. Energy drink is a new thing in Bangladeshi market and they try to explore a new world of taste, flavor, and feeling and finally ensure the quality of new drink in the market. It is new but it is very attractive and potential to the customer and that’s why the market value and market share is increasing day by day. So it is a great opportunity for a soft drinks marketer to enter the market and gain a lot of profit to ensure the customer satisfaction. Some energy drinks available in Bangladeshi market are Sting, Speed, Royal tiger, Braver, Black Horse etc. Within the last 15 years a good number of producers have come up in the market with bottled water. The demand for purified/mineral water is increasing day by day as the people are becoming more health conscious and purchasing power of the people has also been strengthening. The notable brands are Mum, Aquafina, Fresh, Pran, Jibon, Iceberg, Duncan’s, Spa, Shanti, ACME, Aqua Mineral, Everest etc.
Export
Export for Beverage products from Bangladesh are raising day by day. During the last Fiscal Year the export amount was US$ 66826831.78 and almost US$ 23481642.34 of export amount has been already earned till December of FY 2015-16 (July Dec). Now about 90 items of agro ‐ processed products are being exported to 70 countries throughout the world where Beverage has relatively higher export intensiveness. Major export markets of agro ‐ processed products are Asia, Middle East and Africa. Only nine products constitute 95% of Gross Value Added. Among them, four products- textile, RMG, food processing and agro processing absorb 91% of employment and constitute 92% Gross value added and 94% exports. Main competitive companies make a portion of their profits outside of the United States. This sector accounts for over 22% of all manufacturing production and employs about 20% of the labor force in Bangladesh.
As the environmental condition of our country is very favorable for soft drinks industry it is one of the most prominent industries in Bangladesh. Both of the soft drinks and energy drinks have much appeal among the young generation. So the developments of this industry is happening very rapidly. It becomes for new export products which is already proved outside the country. If the owners can overcome the health risk issues and have proper government support, it can definitely be a important sector of foreign remittance.

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