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Sarah \n Jacob, The Economic Times<\/i><\/p>\n Sarah \n Jacob, The Economic Times<\/i><\/p>\n
Bangalore, \n 14 June 2012<\/i><\/p>\n
![](\"..\/images\/suntory.jpg\")
Japanese \n conglomerate Suntory, known for its whiskies and beers, has picked \n up majority stake in a subsidiary of Mumbai-based Narang Group \n to enter India’s non-alcoholic beverage market.
\n <\/p>\n
Suntory Beverage and Food Asia, which manages the M&A strategy \n and administration of group companies of the ¥1,802.8-billion \n (approx Rs 1.3 lakh crore) Suntory Holdings in Southeast Asia, \n has bought 51% stake in Narang Connect. <\/p>\n
"The joint venture (Narang Connect is rechristened Suntory \n Narang) is focused on premium, healthy, coffee-based and carbonated \n beverages," Rahul Narang, founder and chairman of Narang \n Group, said.<\/p>\n
This is the group’s second joint venture with a multinational, \n having partnered French giant Danone for Qua and B’lue water in \n 2010. <\/p>\n
"In the next 3-5 years we will be a major player in India, \n right under Coca-Cola and PepsiCo, and the largest players in \n the premium beverage segment," Narang said. <\/p>\n
He did not divulge the valuation of Narang Connect, which provides \n coffee solutions for the Horeca segment and markets Lindt chocolates, \n Illy Coffee and in-house brand Karma coffee in India. <\/p>\n
Established in 1899, Tokyo-based Suntory is one of the oldest \n liquor firms in Japan. In India, it began marketing Hibiki blended \n whisky and Yamazaki single malt last year through a tieup with \n Radico Khaitan. <\/p>\n
Suntory also makes brands such as Oolong tea, Boss coffee, recently-launched \n Espressoda and zero-calorie drink Pepsi Nex, which was created \n as part of its three-decade-old partnership with PepsiCo. <\/p>\n
Narang said the venture will launch low sugar or vitamin-infused \n drinks priced around Rs 30-35 for a 330 ml bottle. <\/p>\n
"We would look at creating localised products, which is \n where Suntory’s research and development and manufacturing expertise \n will come into play," he added. <\/p>\n
Suntory Narang has begun locally manufacturing citrus-soda Orangina \n through third parties and will roll it out across markets by October. \n Brands CC Lemon and Boss coffee will be launched after that. <\/p>\n
Independent manufacturing was not on the immediate horizon, but \n the company did not rule out extensions into food categories in \n the future. Narang has been named the executive chairman of the \n firm. Avik Sanyal has been internally promoted within Narang Group \n to the post of COO of the JV, which is targeting sales of 700 \n million Japanese yen, or about Rs 50 crore, in the first year \n of operation. <\/p>\n
Narang Group has a distribution network covering around 1.5 lakh \n points of sale across India, Narang said. Having entered the beverage \n segment by distributing premium bottled water Evian and energy \n drink Red Bull in 2003, Narang struck a joint venture with Danone \n in July 2010.<\/p>\n
Analysts say there is significant room for growth as the Indian \n packaged beverages market. "Although there is intense \n competition in the beverage segment in terms of retail and advertising, \n the Indian per capita consumption of branded drinks is still very \n low," Devangshu Dutta, chief executive at consumer goods \n and retail consultancy Third Eyesight, said. <\/b><\/p>\n
The total value sales of packaged soft drinks (including on-trade \n and off-trade) was Rs 35,150 crore in 2011, up 21.4% from 2010, \n market research firm Euromonitor International said. It added \n that value sales will increase 19.5% a year to reach Rs 85,500 \n crore by 2016.<\/p>\n
Narang has ruled out a conflict of interest between the two joint \n ventures. While Danone is focused on products in the still water \n segment, the Suntory JV will focus on the sparkling or carbonated \n drinks segment. <\/p>\n
Instead, he said there are synergies between the two ventures. \n "This deal gives us scale and we can share support functions, \n logistics, warehousing and IT. This helps build the businesses \n for all and joint benefits of costs, including for Danone," \n Narang said.<\/p>\n","protected":false},"excerpt":{"rendered":"
Sarah Jacob, The Economic Times Bangalore, 14 June 2012 Japanese conglomerate Suntory, known for its whiskies and beers, has picked up majority stake in a subsidiary of Mumbai-based Narang Group to enter India’s non-alcoholic beverage market. Suntory Beverage and Food Asia, which manages the M&A strategy and administration of group companies of the ¥1,802.8-billion (approx […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"content-type":"","footnotes":""},"categories":[3],"tags":[],"class_list":["post-3353","post","type-post","status-publish","format-standard","hentry","category-press-quotes"],"yoast_head":"\n