Topicana Marketing

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“out of home consumption” (including restaurants, bars) is also slightly decreasing in France with 166 million liters sold in 2013 (-1.4% vs 2012)

Source : Marketline, 2014

French trends

Orange juice stays the most consumed flavours in France and held 46,49% of the market shares in 2014. Apple seems to be the second favourite flavour of French consumers.

Sources : Xerfi, based on Unijus, Nielsen data, 2013

Regarding the size of the carton, the 1 liter size is the most purchased one. Indeed, in 2014, this format represented almost 6 over 10 juices sold in supermarkets/hypermarkets.

The 1.5 liter size holds the second position, followed by the 2 liters size.

Sources : Xerfi, based on Unijus, Nielsen data, 2013

3/ Environmental analysis

Porter Forces

According to the Harvard professor Michael Eugene Porter, competitive forces must be divided in five agents: rivals, customers, suppliers, new players and substitutes.

The threat of rivalry: the Fruit Juice market presents a high competitive level. The rivalry in this sector happens between medium and big size companies, with high fixed costs. Generally, these companies present diversified areas of production and rarely depend on only fruit juice production. Good examples of these companies are Pepsi (owner of Tropicana) and Coca Cola (owner of Minute Maid). In France, the main rival companies of Tropicana are: Joker, Andros, Vitamont, Innocent, Fruité, Grand Jury, Pressade, Jafaden and distributors brands (like Carrefour, Casino and Auchan).

The power of Customers: A moderate customer’s’ level is observed in the fruit juice market. In this market, 2 kinds of buyers coexist: wholesale and retail customers. It’s possible to say that wholesale companies (like supermarkets and distributeurs) have a big strength and participation on this force, but their power is tempered by retail and local customers. In addition, this market presents a high level of brand recognition and loyal buyers, what can’t be ignored.

The power of suppliers: this market presents a numerous amount of small suppliers, which reduces the supplier power. Also, it’s important to notice that the European Union is the biggest global importer of fruits because its domestic production is not enough. As the raw material of juice are the fruits, if something wrong happens in the foreign suppliers plantations (for example bad climate conditions during the year), it will affect the fruit juice production in Europe. For example, 80% of european orange imports comes from Brazil and USA. If some problem happens to orange harvest in Brazil or USA, it can affect negatively the production of orange juice in Europe. In fact, this strong external dependence represents a risk for this market.

The threat of new players: the rate of entrants in this sector is low due to the big rivalry existent and almost saturation of this market. Most of the companies in this market have a consolidated position and a high level of recognition and loyal customers. With a lot of players, if a company decides to invest in this sector, it must provide products with lower prices or better qualities, but it is extremely difficult because of the large number of existing companies acting in the market. In addition, the market is almost saturated: the small chances of growing discourage potential new competitors. Therefore, new players don’t represent a serious threat for this market.

The threat of substitutes: fruit juices are a specific kind of beverages. Naturally, any other kind of beverage can be considered a substitute of fruit juices. It represents a really high level of substitutes. In addition, the most of the the juice fruit companies produces also other kinds of beverage and it’s common the machinery for fruit juices production be also used for these other beverages’ production. The main threats can be products like bottled water (Evian and Perrier, for example ), soft drinks (Coca-Cola and Nestea are big players on beverage market), energy drinks (RedBull and Monster) or even hot drinks (like Nespresso or Dulce Gusto)

Prescribers

In the market analysis, it is important to define the nature of some prescribers, opinion leaders or others individuals who have a direct impact in the customer’s choice.

On the juice market, we can consider that the main prescriber on the French market is the government which is leading a health campaign through advertising like “eat five fruits and vegetables per days”. This kind of operation is totally in favor of products proposed by Tropicana which are one hundred percent from fruits and drink it can be a way to follow the state recommendations.

On another hand, nutritionist or consumer union (Uniju for example) can also be influent prescribers. They have the power to affect the customer’s purchases by advising a brand to their clients or members through scientific data.

Finally, as the society trend is to consume as healthy as possible, another kind of individuals who has an influence on the customer’s behavior, on a smaller scale, is our close environment. By word of mouth, each person can be directly inspired to change is consumption habits.

4/ Competitive analysis

By competing in the large non-alcoholic beverage market, Tropicana faces two kinds of competitors: directs and indirects.

Indirect competitors

The indirect competition refers to the competition among the suppliers/manufacturers of different products satisfying the same needs.

Concerning Tropicana, customers willing to get refreshment with a non-alcoholic beverage can select substitutes products such as soft drinks, syrups, or even tea and coffee. Indeed, in 2014, while soft drinks represented about two-thirds of supermarkets’ sales (in volume) of non-alcoholic beverages, fruit juices represented about a quarter of the sales.

The following graph shows the respective shares of the most popular products among non-alcoholic drinks in the French market.