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Pakistan’s large cold beverage market (approximately 2 million tons) offers a huge opportunity for Nestlé. Though the market is dominated
by colas, strong growth has been witnessed within the juices, nectars and still drinks (JNSD) category, which can be divided into two segments.
The still drinks/bellywashers segment is large but fragmented.
Over the years it has commoditized resulting in low brand equity, high dependence on trade push, huge trade margins and low profitability. On the other hand the juices and nectars segment is fast growing and offers immense potential to increase share of throat. It is brand driven and offers premium pricing and high profitability.
In the year 2000, Nestlé faced a fundamental business issue: most of its beverage portfolio comprised of still drinks/bellywashers. This had resulted in eroding profitability and increased trade dependence. NESTLÉ 100% Pure Orange Juice was performing well but had limited marketing support.
At that point a strategic decision was taken to increase focus on the premium juices and nectars and slowly phase out bellywashers from the portfolio. In line with this increased focus, the taste of NESTLÉ Orange Juice was tuned to the local palette through use of local fruit (Kino- hybrid of Orange) resulting in greater consumer acceptance.
Encouraged by the strong consumer response to NESTLÉ Orange Juice the category of Nestlé Juices was expanded with the introduction of Mango and Mango-Orange in 2000, followed by Apple Nectar in 2002, Pineapple Nectar in 2003, Red Grapes Nectar in 2005, Chaunsa Nectar in 2007 and finally Guava Nectar in 2008.
This created a range of premium quality, superb tasting juices and nectars, with each flavour positioned for a specific consumer taste palette. The idea was to cater to diverse need-states through specific variants, thereby capturing a larger share of throat, and growing the category with a focused thrust.
In the last few years NESTLÉ Juices have experienced strong growth, and the business has now reached over 2.0 billion rupees in sales. Moreover, NESTLÉ is the market leader with over 60% share of the juices and nectars segment despite the entry of various local and foreign competitors.
The success of NESTLÉ juices has recently attracted several players to this category. This growing trend is also due to increased consumer awareness and preference towards healthy beverage options.
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