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CavinKare of India moves into drinks
FoodBev Media

FoodBev Media

3 March 2008

CavinKare of India moves into drinks

The CavinKare group of India, manufacturer of personal care and food products, has acquired 100% of beverage maker Maa Fruits for INR300 million ($7.5 million), including INR24 million ($600,000) in debt.

Based in Dharmapuri in the eastern state of Tamil Nadu, Maa produces a range of fruit drinks packed in 200ml and 1 litre PET bottles and 200ml Tetra Pak cartons. The Maa line is distributed chiefly in rural areas across southern India, where it's said to rank fourth in the market with a share of about 5%.

The company’s new owner plans to invest some INR300 million ($7.5 million) in expanding Maa’s production facilities, as well as adding new drinks and extending distribution of the brand to northern India.

“Apart from expanding the portfolio and capacity, we want to take the brand to other geographies in phases over the following months,” CK Ranganathan, Chairman and Managing Director of CavinKare, told a press conference in Chennai. “We propose to spend at least 17% of Maa’s turnover on advertising and marketing during the first few years.”

Ranganathan said Maa has a skilled workforce and a strong raw material procurement system. CavinKare will leverage the strength of its own sales and distribution system to grow the fruit drinks brand. Maa sales are expected to reach about INR400 million ($10 million) this year, contributing around 7% to CavinKare’s group turnover.

Ramesh Vishwanathan, Executive Director of CavinKare, said the total market for juice and juice drinks in India was reckoned to have reached no more than 25% of its full potential. The fruit drinks market in southern India is currently growing about 50% annually.

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