Starting a Fruit Juice Business
Starting a Fruit Juice Business
Fresh fruit juice business or shop is a great opportunity for entrepreneurs trying to start a new business with low investment. Changing lifestyle and demand for hygienic and clean fruit juices is creating a growing demand for fresh fruit juices in India. The fresh fruit juice industry in India is a largely unorganised and untapped industry. Hence, many new entrants have now been able to quickly create large business and brands like RAWpressery and PaperBoat. The investment in capital equipment and raw material could be low or high depending on the scale of business. But, overall the fruit juice business has low capital investment required to quickly break-even, owing to high-profit margins.
Industry Overview
According to the business experts and market research, the current market size for the fresh fruit juice business in India is around 3200 crore. The market is estimated to grow at the rate of 25%-30%, owing to factors like urbanization, increasing disposable income and entry of organised players into the market. Majority of the fresh fruit juice business in India is still unorganised and dominated by roadside shops, run by sole proprietors. However, organised players have begun penetrating Tier 1 and Tier 2 cities in India by establishing fresh fruit juice chains and distribution of pre-packaged fresh fruit juices.
Business Model
Entry into the organised fresh fruit juice business can be made in two ways viz. establishing a fresh fruit juice shop or by distributing pre-packaged fresh fruit juice. Each of the models has its own pros and cons.
Establishing Juice Shop
Establishing a juice shop or a chain of juice shops requires minimal capital requirement. Typically a small juice shop with a seating capacity of about 10 – 20 can be established with an investment of about 10 – 15 lakhs. There are also various options available to open a franchise unit of an established chain of juice shops.
The advantages of establishing a juice shop are that it would require minimal capital investment, can serve as a source of income and would have good demand in areas like canteens, fitness centres, malls and airport. Further, in addition to selling fruit juices, snacks and food items like sandwiches, snacks and other beverages can be sold at a juice shop to create additional sources of revenue.
However, the scalability limits for a stand-alone juice shop and success would largely depend on the location of the juice shop.
Establishing a Pre-Packaged Juice Business
Bottled or pre-packaged fruit juices are beginning to replace the traditional unorganized juice shops in India. Development in food processing technology, cold chains and packing methodologies has created an environment wherein fresh fruit juice can be manufactured, transported and distributed over wide geography while remaining fresh. Also, the current trend of eating healthy and fresh is driving a change in lifestyle globally with many finding an alternative in fresh fruit juice to bottled or fizzy drinks. This has led to the creation of various businesses that are highly scalable.
However, the creation of a successful pre-packed juice business requires high investment in equipment, bottling plant, raw material, branding and distribution network.
Registrations and Licenses
Business Entity
The requirement for registration and license would vary based on the format of the fresh fruit juice business. Unorganised fresh fruit juice shops seldom have any registrations except for an FSSAI registration. However, large-format juice shops that have plans for creating a franchise model are typically established as a private limited company with FSSAI license to accommodate future scaling up of the business.
Pre-packaged fresh fruit juice businesses are almost always created as a private limited company to have easier access to bank or equity funding. Further, establishing a business as a corporate entity will also ensure its easily transferable, provides limited liability protection and has perpetual existence.
Trademark Registration
It’s highly advisable for a new fresh fruit business or an existing fresh fruit juice business which has a unique name/brand to obtain a trademark registration. Trademark registration will ensure the brand original by competitors and the business is franchisable in the future.
FSSAI Registration or License
Registration or licensing with the Food Safety and Standards Authority of India is a must for all juice shops or juice businesses. The requirement between FSSAI registration and FSSAI license would vary based on the type and scale of the fruit juice business. In addition to the FSSAI license or registration, testing of bottled juices for various parameters and compliance with food labelling regulations it would be mandated by FSSAI to ensure the product is safe for consumption.
