Fruit beverage maker Manpasand Beverages will invest ₹600 crore to set up four new plants.
Apart from doubling existing capacities to 30 lakh litres a day, the focus will be on ramping up presence in the eastern and southern regions, through new facilities. It also intends to consolidate its position in key markets of North and West India.
According to Abhishek Singh, Whole-Time Director, Manpasand Beverages, the company is yet to take a call on the location for the plant in the eastern region. A probable location could be along the Jharkhand-Odisha border.
In the South, it is setting up a plant at Sri City in Andhra Pradesh; while plants will come up at Varanasi in Uttar Pradesh and Vadodara in Gujarat, respectively. These three plants will be operational over the next 12 months.
The Gujarat-based company, which owns brands like ‘MangoSip’ and ‘FruitsUp’ has five manufacturing facilities across Gujarat, Uttar Pradesh, Haryana and Uttarakhand with a combined capacity of 15 lakh litres per day. “About ₹400 crore for the expansion will be funded through proceeds from a qualified institutional placement that was issued recently. The remaining ₹200 crore will be through internal accruals,” Singh told BusinessLine.
At present, Manpasand is the fourth largest player in the ₹5,000-crore mango beverage segment with a 10 per cent market share. Maaza, Slice and Frooti continue to be the major players.
Nearly 80 per cent of its ₹717-crore revenues (as in FY17) is from the mango drink, while another 20 per cent is from its carbonated fruit drink beverage.
According to Singh, Manpasand will look to ramp up distribution across key markets. Smaller cities and towns have been its strongholds with small-value cartons of ₹5-10.
Better offerings at the lowest price points — at ₹5 where majority of the multi-nationals are absent — has worked in its favour. Better cost dynamics — of having own bottling plants and lower costs — has also helped the company tap the ‘pet bottle’ phenomenon at the ₹10 price-points.
“Although the company has products ranging from ₹5 to ₹99, around 55-60 per cent of the sales are in the ₹5-10 range,” he said.
Market sources say Manpasand also pays its retailers 5-7 per cent better margin than competitors.
“The target is to reach a turnover of ₹5,000 crore by 2020,” Singh maintained.