GROVE FRESH LTD. – MARKETING ORGANIC JUICES

Akshat BadayaAnshul GuptaRonak AgrawalShuchi AryaVishal Singh

Grove Fresh Ltd.

• Founded by John Taylor in 1994.• GFL became first company to market organic juices in UK in 1996• Registered remarkable year-on-year growth of 52% to 3.2 million

pounds.• Operated under the umbrella United Foods International• Admired for High Quality Products & Innovative Marketing• Acquired German based FSP FRISCHE & French FRAICHEUR in

1998.

• Acquired Fruity King and achieved sales growth of 185% and saw a profit of $ 0.9 million in 2000.

• In 2001, UFI (A GFL holding) ranked 3rd in Fast Track 100 survey.• 2003: GFL registered 52% year on year growth in profit.• 2006: Continued to dominate UK organic juice market with market share

exceeding 60%.• But encountered problems like slowing market growth, mounting

competition, supply shortage

GFL’s Customer Segment• Empty Nesters• Younger generation shifts to Organic Juices

GFL’s USP• Pure Organic Juices• Certified to Soil Association Standards• Introduced unique flavour combinations

GFL’s Pricing Strategy• Priced Over normal juices (Others being Non-Organic)• Willingness of Customers to pay higher for Health Advantages• Maintained Price Parity with Premium Segment Competitors

Distribution• Through Supermarket Chains• E-Retailing• Other means, such as distribution channel

Promotion• Prominent trademark• Print media• Free samples• Captivating Posters• Highlighting health and environment

Sales Turnover

UK market for Organic not from Concentrate Citrus Juice

YearVolumes

('000 Litres)Volume Growth

(%)Revenues (US$ mn)

Revenue Growth(%)

1998 822 - 2.47 -

1999 2660 224 6.78 175

2000 3903 47 9.16 35

2001 4500 15 10.35 13

2002 4864 8 11.07 7

2003 5107 5 11.63 5

2004 5362 5 12.21 5

SWOT Analysis

Strength:• High Quality• Innovative marketing• Diversification (Fruit juice to vegetable juice)• Strong customer base

Weakness:• Main source of supply – Florida• Too much dependent on 3rd party distribution channels• Supply and production shortage of fruits in UK

Opportunities:• Market expansion of organic juice.• Increase their market shares in UK by acquiring other competing brands• Come up with exclusive shops.

Threats:• Claims saying that it is not organic.• Low price competitors.• Although the volume is increasing the rate of volume growth is

decreasing.• Growth in no. of players operating in organic segments, such as:

Everfresh juice corporation, Holiday Juice Ltd.

4PsProduct:• Product Category: FMCG• They were having product line with various flavours such as Apple,

Orange, Apple + Orange, Apple + Cranberry, Grape fruits, Traditional lemonade, Breakfast juice.

• Product diversification – Merger with Dutch company “Fruity King” in UK.

• Branding – Strong brand image helped to dominate the UK market.• Brand expansion by starting a sub–brand called “V-juice”.

Price:• They followed a premium price strategy.• As organic products were considered environmental friendly and by using

them customer felt that they were making positive choice to safeguard the environment.

Place:• Through super market chain they dominated the UK market for organic

products as they did not use the agent middle men and wholesalers in their distribution channel. As they further directly contacted costumer through e-retailing.

Promotion:• They used print media like weekend supplements of national news papers

to target youngster .• They did their advertisement through women magazines as it targeted

females for their product. • Promotions by giving free samples as promotion is bit different form

advertisement.

STP Analysis

Segmentation:• Market was segmented by two variables-age groups and income.

Targeting:• GFL targeted middle aged people.• Health conscious people like youngsters.

Positioning• GFL adopted one of the best strategy to position their product by launching

an organic product which is purely an extract of fruit and vegetables and with no extra added preservatives, colour and additives.

• Also the unusual combinations of fruits and vegetables juices has been other unique factor which helped company to differentiate from other competitors in the market.

PEST AnalysisPolitical Analysis:• Political Analysis Fruits and juices imported from USA and other

countries were not examined properly (SOIL standards).• Controversial advertising campaigns which hampered the company’s

image badly.• It created legal problems and ASA accused company for unethical

practices and called for quick action PEST Analysis.

Economical Analysis:• In 2006 due to shortage of fruit and vegetable supply they had to import

the fruits from the USA and other countries which had direct impact on country’s economy.

Social Analysis:• Due to organic farming since 1994 the fertility of the land is preserved

and giving higher yields in the future. • Organic juices rich in nutrition helped the heart disease patient and others

with different health concern.

Technological Analysis:• They used latest technology in the organic farming .• Used e-retailing for distribution of their product .• E-retailing helped product look attractive which added many new

customers.

Promoting the acceptance & usage of organic foods

• Promotional campaign.• Handouts and stalls at leading stores.• News paper cut outs.• Advertising – Celebrity endorsement.• Exclusive shops.• Promotional activity through doctors.• Certification for product.

What does the future have in store for GROVE FRESH Ltd.

• Slowing market growth.• Mounting competition.• Supply problems.• Analyst’s verdict that organic foods aren’t important.

What can GROVE FRESH Ltd. do to address the challenges

• Online promotion of products.• Use UFL’s presence in the market to expand & tackle competition.• Experiment with new packaging technologies to cut down on costs. • Implement more mergers & acquisitions to increase their existing market

share.