Real juice makes sweet progress

When set in a global context, not from concentrate 100% juice (NFC juice) is a relatively small category within the soft drinks industry and, due to its relatively higher selling price in comparison to other juice categories, it is seen as a premium product in most countries.

This is reflected in the latest research findings from Euromonitor International, which show a high disparity between volume and value sales, where NFC juice accounts for 10% of the total global volume sales of juices and 14% of value sales.

Globally, Euromonitor’s research shows that NFC juice has also experienced strong growth in both total volume (68%) and value sales (64%) between 1997 and 2004, largely outperforming the overall growth in the juice industry (volume 42% and value 42%) during the same period.

The main contributing factor to growth in demand for NFC juice is the health and wellness trend, with consumers seeking healthier products with natural ingredients and low sugar content. Compared to carbonates, NFC juice contains less sugar and as a result, is increasingly becoming one of the alternatives for health conscious consumers.

NFC juice also owes its growing popularity to the combined benefits of high juice content and convenience, which fits well with the current consumer trend favouring convenience beverages. Compared to home-made freshly squeezed juices, commercially produced NFC juice offers time-saving advantages in addition to good quality. Finally, Euromonitor’s research shows that growth in sales has also been boosted by continued promotional campaigns by manufacturers for private label, fortified NFC juice and organic variants.

NFC juice a value booster

As NFC juice is a premium juice, unsurprisingly, its consumption is mainly concentrated within developed soft drinks markets, with the US, the UK, France, Canada and Australia accounting for nearly 70% of global total volume sales, according to Euromonitor International. Australia has the highest consumption level in the world, at 11 litres per head and Canada comes second at 9.6 litres per head.

In developed markets, where the level of disposable income is higher than that of their developing counterparts, consumers are more likely to pay a premium for high quality juices and this has resulted in higher consumption levels in these markets. The total juice consumption is also generally high in developed markets, and close to saturation point in countries such as the US (44 litres per head) and Germany (41 litres per head), which compares to the world’s average juice consumption of only 8 litres per head. From the manufacturers’ perspective, NFC juice is used to target health conscious consumers and maintain the market demand for overall juices.

With regards to retail selling prices, NFC juice stands out as a high-end juice category among all juice categories in both developed and developing markets. In the UK – the second largest market for NFC juice by volume in the world according to Euromonitor – the retail selling price for PepsiCo’s Tropicana is around US$4.82 per litre, while a typical Tesco’s reconstituted juice retails at US$1.13 per litre. The price disparity is also noticeable in developing markets. In Poland – the single Eastern European market with sizeable volume sales of NFC juice – the retail selling price for an average NFC juice is twice as high as that of reconstitutes.

In fact, the high selling price of NFC juice coupled with the strong growth in volume sales over the past few years has effectively pushed up value sales of the fruit/vegetable juice category globally. In other words, NFC juices have worked as a value booster for the juice category. Euromonitor’s research shows that the UK recorded growth rates of 90% for retail value sales and 112% for retail volume sales of NFC juices between 1997 and 2004. German consumers also spent five times more on NFC juices in 2004 than they did six years ago.

Private label dynamism

NFC juices as a value booster suggest huge potential revenues and it has generated strong interest not only from mainstream manufacturers but also from leading supermarkets. The growth in sales from supermarkets has formed an interesting theme in certain markets. Private labels have gained significant market shares in for instance the UK and Germany, where they account for 49% and 48% of retail volume sales respectively within the NFC juice category. In these two countries, the retail markets are highly consolidated, which enables major supermarkets to command the supreme power of shelf space, and their own brands are given priority in terms of shelf visibility.

In the UK, Tesco – the largest supermarket – accounts for 20% of retail volume sales of NFC juices, while Sainsbury’s accounts for 16%. Interestingly, unlike the price positioning of other food and beverages, the price gap between branded and NFC juices is not markedly different, according to Euromonitor’s research. A typical Sainsbury’s NFC juice costs around US$4.53 per litre, a Tesco’s NFC juice costs around US$4.67 per litre and Tropicana costs about US$4.82 per litre. However, it is noticeable that private labels are mostly freshly squeezed juices with only seven days shelf life and it is perceived as being healthier than those NFC juice with a longer shelf life. The health aspect of freshly squeezed juice is perhaps the principle priority for UK consumers.

In Germany, discounters have been the main driving force for selling NFC juices in recent years. Following the entrance of Aldi into this category at the beginning of 2002, other discounters such as Lidl and Penny extended their ranges of NFC juices in 2003 and 2004 by adding a variety of flavours.

The improved quality of private label products coupled with the sluggish performance of the economy in Germany has diverted consumers’ attention from branded products to private labels. This consumer switch has helped increase sales of private label juices as well as other private label beverages. In this context, Tropicana has experienced a devastating slide in market shares and Euromonitor’s research shows that over the past five years, Tropicana’s retail volume shares have been cannibalised by private labels, dropping from 20% in 2000 to 2.3% in 2004 in the NFC juice category in Germany.


Private label NFC juices have however not had the same success in all countries. In the US for instance (the largest juice market in the world), PepsiCo’s Tropicana juice occupies the supreme position in the NFC juice category. In fact, Tropicana’s dominance in the US (making up almost 70% of retail volume sales of NFC juices) has strongly underpinned its global position, with Tropicana accounting for 40% of retail volume sales and 37% of retail value sales within the NFC juice category globally.

With regards to product coverage, Tropicana benefits from a wide range of juice products including NFC juices, 100% reconstituted juices and juice drinks, although the typical Tropicana brand is a NFC juice in most countries. Tropicana is available in both NFC juices and reconstituted juices categories in some countries, such as Argentina. In terms of brand portfolio, the brand has a broad extension and Tropicana Pure Premium Orange Juice is the most popular flavour in the US among the Tropicana family (including Tropicana Pure Premium Grapefruit Juice, Tropicana Pure Premium Blended Fruit Juice and Tropicana juice drink). The variety of flavours and wide product categories Tropicana offers fit well with the diverse needs of different consumers groups and raised consumers’ brand awareness and loyalty.

Another contributing factor to Tropicana’s success is its broad geographic coverage across the globe. Euromonitor International’s research shows that Tropicana has achieved sizeable sales in around 15 major countries, while its rival NFC juice brand Florida’s Natural (owned by Florida’s Natural Growers) is only present in the US, Mexico and Singapore. Also, Tropicana has been acting as an educator about NFC juices in many Western European countries for health conscious consumers. So far, the brand has achieved considerable market shares in the UK, Sweden, France and Belgium. In early 2005, PepsiCo further consolidated its strength in the fruit-based beverage category by acquiring the leading smoothie player Pete & Johnny (which owns the popular smoothie brand PJ) in the UK.

Nevertheless, Tropicana is facing growing competition from other juice beverages and the challenges from various sources remain. In the US, for example, the emergence of POM Wonderful juices (introduced by POM Wonderful LLC) in April 2003 is offering increasing competition to NFC juices, even though they are reconstituted. Many consumers are apparently not able to differentiate NFC juices from reconstitutes. In fact, the focal point of the war between Minute Maid (a typical reconstituted juice brand in the US) and Tropicana has centred on the functionality of ingredients such as vitamins fortifications. Low carb beverages have also cast a shadow on NFC juices and volume sales of NFC juices declined marginally during the period of 2003-2004 in the US, according to Euromonitor’s research.

Opportunities in developing markets

Considering future growth potential – Euromonitor International forecasts that developing markets, which are trailing far behind developed markets in terms of product penetration, should offer long term growth opportunities for NFC juices. Major developing markets such as China, Russia and Mexico are among the biggest juice drinkers in the world, however, sales of NFC juices are either insignificant (China 15 million litres, Mexico 3 million litres) or negligible (Russia). Even the developed Mediterranean region has a tiny market for NFC juices. In Spain, the per capita consumption of NFC juice stands at 1.7 litres and sales in Turkey remain negligible.

There are several factors contributing to the low consumption level of NFC juices in these markets. In the Mediterranean countries, this is chiefly due to the diet pattern in countries with hot weather, where there is an ample supply of cheap fruits and vegetables. The hot climate promises fresh fruits and vegetables in all seasons. Mediterranean consumers tend to opt for fresh produce instead of a commercially packaged version. Euromonitor’s research shows that in the medium term, NFC juice marketers may well have a hard time to convince the locals to sample NFC juices as consumers are expected to carry on their traditional diet patterns in the years to come. But as the demand for convenience increases, with increased busy lifestyles, the demand for NFC juices may well increase too.

By the same token, NFC juices have generated little interest among Latin American consumers so far. Brazil has the largest NFC juice market in the Latin America region, with sales at only 106 million litres; however, volume sales grew rapidly at 151% between 1997 and 2004.

In developing markets, some consumers are migrating from carbonates to juice drinks and nectars, whereas NFC juices have not yet been given full attention by both manufacturers and consumers alike. In Russia, the driving force for the juice market is reconstituted 100% juice, while China is experiencing a boom for juice drinks. In China, the Coca-Cola Company’s massive marketing support for its Qoo juice drink and the subsequent influx of copycat products has categorically attracted all juice consumers’ attention in recent years. There is a clear indication that major juice players show little desire to invest in premium products such as NFC juices at this stage of the juice market development in China. The market conditions such as supply and retail infrastructure are not developed well enough yet, in order for manufacturers to get an immediate profitable return from the NFC juice category, although manufactures may feel differently about the long-term potential of NFC juices.

On a positive note, with changing consumers lifestyles, improving levels of disposable income and progress in infrastructure for cold chain supply, NFC juices certainly offer a great deal of potential in most major developing markets. In China, for example, increasingly hectic lifestyles have already pushed young consumers to sample convenience beverages such as ready-to-drink tea. NFC juices as a nutritious and convenient drink will certainly attract young and affluent consumers’ attention in the medium term, when high levels of marketing activity is dedicated to this category. Euromonitor’s research predicts that total volume growth of NFC juices will grow by 181% between 2004 and 2009 in China.