Rawpressery Porter Five Forces

1. Threat of New Entrants

• In the beverage industry, barriers to entry are moderately high, as consumers

prefer to select brands that are more popular and less harmful to the body.
• Companies requires big investments in the supplies used in the final products
at the initial stage
• New entrants should be consistent with the recipes to join the beverage
industry, and need too much testing after implementation.
• Economies of scale at the initial stage tend to be high but the cost per unit
decreases as time passes.
• Hence, it would be tough for new entrants to join the beverage industry with
less capital.
1. Threat of New Entrants (Continued)

• New entrants who are not key fruit juice drinks face a significant challenge
• Some major competitors in the fruit drinks market are Minute Maid, Slice, Maaza.
• Also, exotic fruit juices like Rani have started making an entry and are branded as premium
brands.
• With relatively low fixed costs and low cost of producing and processing fruit juices, the
challenge faced by new entrants in the packaged fruit juice industry is moderately large. The
procurement and distribution platforms can be easily used by a new MNC or a domestic player
to challenge existing participants.
• Nevertheless, due to high value chain costs for imported as well as domestically produced pulp,
supply side economies of scale is another consideration because the existing beverage brands
can easily leverage pre-developed networks of production , marketing and distribution.
Demand-side economies of scale are easy to create, as fruit juices are a mass commodity.
However industry growth rates are fairly high to absorb new competition.
1. Threat of New Entrants (Continued)

• Barriers to entry:
• Brand positioning and value in consumers ' minds as health products – a new
player would need to cultivate a brand image similar to that.
• Major players like Dabur-Real and Pepsi-Tropicana enjoyed economies of
scale in procurement , processing, distribution , and marketing.
• For a large MNC player entry barriers are largely negligible.
2. Supplier Bargaining Power

• Number of manufacturers of raw materials in beverage industry are more compare to the
number of companies that are willing to buy from it.
• Products are characterized by its flavours not with the process.
• Hence, Supplier's bargaining power is moderately low as many brands are established locally
and internationally to serve the clean label market.
• Globally-China is rich in fruit resources and the majority of the juice producers are located in
China
• Low cost , high quality, highly competitive juices from China are prepared for entry into the
international market. Indian businesses are forced to cut production costs in order to drive up
the purchases.
• The bargaining power of Indian suppliers in this respect is therefore low globally.
2. Supplier Bargaining Power (Continued)

•Suppliers include fruit vendors, importers of fruit pulp, suppliers of fruit pulp, suppliers of sugar and sellers
of packaging & bottling. At this level, fruit availability and pricing is not an issue, owing to the surplus
production. Fruit pulp suppliers are closer to the fruit juice industry, as they are largely dependent on the
fruit juice for purchase.The raw material being perishable, quality of fruits supplied, and proximity of
suppliers from the manufacturing plant is a major factor.

•In some cases, the fruit juice industry has a moderately high supplier bargaining power, because the
indispensability of the supplier's product (bottling, fruit pulp, etc.) can be critical to the production of the
company. China's surplus domestic fruit / fruit pulp production is a problem that reduces Indian suppliers '
bargaining power.
3. Threat of substitutes

•Customers can quickly shift to other brands, as many brands are available locally & internationally.
•One of the reason of consumers moving from product to product can be price. Another reason can be quality.
•Different flavors which are available with our competitors can also be the reason to shift preferences
•Hence, Threat to substitute is high.
•The following products threaten the market of packaged juices directly:
• Fresh fruit juices
• Energy drinks
• Tea, coffee
• Aerated drinks
• Alcoholic drinks
3. Threat of substitutes (Continued)

•Although the packaged fruit juices do not have a direct substitute, fresh fruit juice (loose juices – perceived to be
healthier and preferred) is a widely available option that Indians prefer over packaged fruit juices. However,
packaged fruit juices have proliferated throughout India's retail markets through efficient distribution channels,
and are more accessible than fresh fruit juices in many places.The packaged fruit juices are gaining over the fresh
juice market because of this kind of factor. Fresh fruit juices (loose juices) are also in large part an unorganized
market.
•Synthetic juices are another possible substitute for packaged fruit juices-depending on the sensitivity and
preferences of customers.
•Nevertheless, niche products such as fruit-flavored carbonated drinks, milk derivatives (milk, shakes, smoothies
and buttermilk), coconut water, vitamin and flavored water, lemonade, sugarcane juice, Aam Panna, Kanji, Jal-
jeera, Sharbat and other traditional and local drinks are ready to replace fruit juices as a commodity for POS
consumption.
4. Customer Bargaining Power

•There are far fewer customers who are health conscious

•Product, quality and different flavors of the rivals are the key reason why the buyer switches to another specific
brand or company.
•Since it’s a huge market, consumers have different options to choose from and hence the ball is in the consumer’s
court.
•Specific discounts or incentives to the customer will benefit Raw pressery directly to move customers to their side.
•Hence, we can say that Bargaining power of buyer is high.
•In the first line cities, the distinction of the commodity is smaller.
•Distributors have relatively large bargaining power.
•Companies in Tier 2 cities depend on distributors for market access; the earnings of the dealers suffer, leading to
lower bargaining power
 4. Customer Bargaining Power (Continued)

•Buyers ' bargaining powers in the packaged fruit juice industry are at moderate levels as most sales are driven
by retail store purchasing decisions. Potential consumers are spread across Indian demographics, and they are
more educated and aware of their health.
• The business sets the selling conditions on the basis of market positioning and the unorganized retail sector
has little bargaining power.
•The threat of a few consumers purchasing large-scale bulk is small but is likely to increase with the emergence
of organized retail chains and brands with immense negotiating power over juice marketing firms.
• The rise of online grocery retailing will pose unique threats to the margins of juice marketing firms with the
enormous bargaining power the few online retailers (BigBasketeer, etc.) and aggregators like Flipkart, Amazon
enjoy. Bargaining power of distributors is very large due to high switching costs.
5. Internal Competition (Rivalry)

• There are many companies in the market which provide consumers with such similar type of products.
Such companies serve various products and target almost similar audiences.
• Rawpressery's revenue comes only from juices and cleanses but competitors generates revenues from
many different products which are vegetarian, non- vegetarian & vegan.
• There are significant brand identities among the firms in the industry, which is why brand names are an important
competitive edge amongst new businesses. Not much new can be done in the segment, so various brands are trying
out different opportunities.
• Hence, internal competition (rivalry) is high in beverages market.
• The packaged juice industry entered a constantly developing phase.
• Consumers are more aware of their options, and are also aware of their wellbeing-demand for packaged
juices has risen.
• Two leading competitors-Real and Tropicana fight for dominance
5. Internal Competition (Rivalry) (Continued)

•With increasing numbers of competitors – Tropicana, Real, Harvest, B-natural – existing rivalry
in the Indian markets is very high.

•In the fruit juice industry the overall degree of competition is moderate. All leading brands enjoy
moderate to high margins based on their positioning, the rivalry only adds to the positive growth
of the market and increasing the overall size of the pie. Indian fruit beverage market currently
has a net value of 275 crores and is rising at a rate of 35 percent to 40% per annum. Tropicana
and Real Fruit juices have more than 40 per cent of market shares each. Increasing customer
expectations and tastes is contributing to more competition.
Thank You
Meet Shah