Hector Beverages trims losses as consumers shift to healthier drinks
Hector Beverages, the manufacturer of Paper Boat brand of juices, witnessed 66 per cent growth in revenues and narrowing of losses for the financial year 2018 as consumers shied away from aerated and carbonated sugary soft drinks.
The Sequoiabacked company posted revenue of ₹123 crore during FY18 compared to ₹74 crore in the year ago period. Its losses during the fiscal came down by 21 per cent to ₹61 crore compared with the ₹78-crore loss in the previous fiscal, according to financial data sourced from business intelligence platform Tofler.
The company, founded by Neeraj Biyani and Neeraj Kakkar, has been rapidly growing the fruit juice market in the country by catering to the different and diversified local tastes of consumers. The company, which entered the market with an energy drink Tzinga in 2010, shifted its focus and pivoted itself as a juice and ethnic drink brand on the back of rising awareness among the consumers about the disadvantages of carbonated drinks.
Paper Boat has been able to create a niche for itself by making drinks such as buttermilk for South Indian consumers to thandai for the Hindi-speaking consumers along with diabetic-friendly jamun juice. The company manufactures about nine flavours of juices including sugarcane, coconut, mango, guava and pomegranate. The overall juice market in India is at ₹1,500 crore and is growing at a faster rate, according to consulting firm Technopak.
Industry experts are of the view that the segment is likely to get a further boost following a proposal from the government asking all drink companies in the country to have at least two per cent of fruit content in their drinks to improve the nutritional value of the drinks and productivity of farmers.
Changing consumer preference around fizzy drinks in India has forced beverage majors such as PepsiCo and Coca-Cola to to launch more health-based drinks in the Indian market.