 "Sweet-tooth Indians leave a bitter taste in sugar-free sellers' mouths")
Sugar-free products, present in the market for four-five years, account for around Rs 400 crore in the Rs 34,000-crore food products market (beverages, juices, chocolates, biscuits and ice creams). In soft drinks, for instance, Coke executives say the share of diet products is less than one per cent of the total carbonated drinks market. More important, experts say its share in the total volume of carbonated beverages is actually coming down, simply because it is growing slower than the category.
Last year, while the carbonated beverage industry grew 18 per cent in volumes, the carbonated diet category grew only nine to 10 per cent. This is also despite the fact that just a year before, the prices of diet Colas and that of the normal product was brought at par by Coca-Cola India to attract more consumers. So a Diet Coke can of 330 ml is priced currently at Rs 25, which is the same price for, say, a Thums Up can. Says Atul Singh, deputy president, Coca-Cola Pacific Group, which also looks at India: “Diet Coke has a miniscule share of our total volumes. And, while we have it in our portfolio, people seem to like the real thing.” It was the same reason why PepsiCo, which launched Max, a sugar-free drink, two years ago in some markets with fanfare, was forced to withdraw it because consumers were not looking for another sugar-free drink.
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Cola company experts say there are two reasons for this: one is that the taste of a diet cola is different from the one with sugar and that dissuades consumers. Two, it is positioned as a premium product and not as a necessity for consumers who want to keep their sugar levels in check. “It’s perceived as a premium product which makes a statement that you are a senior executive. That’s why the market is no niche,” says a senior executive of a leading cola company.
In ice creams, too, the price difference, as well as the taste issue, has kept consumers away. Take Amul, which says sugar-free ice creams constitute for less than one per cent of its ice cream sales. R S Sodhi, managing director, Gujarat Co-operative Milk Marketing Federation, owner of Amul, says: “The market for these products remains small. There is a huge difference in taste between sugar and sugar-free products, which is why the latter has not worked in India.” There are other challenges, too, in terms of marketing sugar-free products. Sodhi says sugar-free ice cream is priced 10 to 15 per cent higher than a regular one. “You have to have a separate line to manufacture sugar-free products. If you don’t have sufficient volumes, you have to depend on your existing production line to manufacture these products. This can be a cumbersome process because you have to clean the line first before you utilise the line for getting out your sugar-free products,” he adds.
Biscuit manufacturers are also not looking at expanding their sugar-free portfolio. Parle Products, the largest biscuit maker in the country, has just one sugar-free product--a cream cracker under the Actifit brand name. Mayank Shah, general manager of Parle, says it does not want to add more. “Taste matters in a market like India unlike the West, where the functional benefits count more than taste. Sugar-free is not exactly tasty. So, marketing it to the masses in India is a challenge, which is why its usage is restricted to those afflicted with a problem.” Chocolate makers also admit Indian habits have come in the way of making sugar-free not a very successful product. It is because of the country’s colonial heritage, which is linked to the British who prefer their chocolates sweet unlike the Americans, who like it bitter.
Lindt, a premium chocolate brand, also does not have a sugar-free niche brand in India. Jeevan Verma, business head of the company, says dark chocolate, which consists of more cocoa and less sugar, is becoming popular in modern trade among consumers. “Indians can make do with less sugar but are not comfortable with sugar completely out of their chocolates. So, we don’t have a market here.”
Even in fruit juices, sugar additive juices are growing faster than those where sugar is not added. Dabur, for instance, sells juices of Rs 600 crore a year and only a sixth of it is sold without additives. Industry experts say while overall sugar additive juices grew at 16-17 per cent in volumes, that of natural juice moved up by around 10 per cent.
DOESN'T TASTE GOOD
Indians won’t lap a food item without sugar
* Sugar-free products account for only Rs 400 crore in the Rs 34,000-crore food products market
* Taste and higher prices keep demand low
* Coca-Cola’s diet products contribute less than 1% of the total carbonated drinks market
* Amul’s sugar-free ice creams constitute for less than 1% of its ice cream sales
* Parle has only one sugar-free product under the Actifit brand and says it does not want to add more