Introduction:

Parent Company
By the calendar, the advent of existence of Paper Boat can be dated back to August, 2013, but its foundation, was
laid way back in 2009, in the form of its parent company-Hector Beverages. In October, 2009, Suhas Misra and
Neeraj Kakkar, both ex-Hindustan Coca-Cola employees, joined hands to build Hector Beverages, with the first
product being Tzinga, an energy drink. Later on, James Nuttall an ex-employee of Dow Chemicals and Neeraj
Bayani joined the venture. However, James Nuttall and Suhas Misra quit the company in 2013.
Investments
In March 2011, Hector Beverages raised 6 Crore through funding from Narayan Murthys VC firm Catamaran and
Bangalore-based Footprint Ventures. In May 2013, Hector Beverages managed to raise a second round of funding of
$ 8 million from Sequoia Capital in which existing investors also took part. In August 2013, Paper Boat was
launched. The original purpose of launching Paper Boat was to support Tzinga, but, the growth rate of Paper Boat
was startling, consequently, the decision of turning it into a niche product was taken. The first plant was set up in
Manesar, NCR. Through Paper Boat, Hector Beverages forayed into the virgin market of traditional Indian
beverages, with its initial flavor variants being-Aamras and Jaljeera. Currently, it offers ten variants, namely, chilled
rasam, sattu drink, ginger lemon tea, tulsi tea, aamras, jaljeera, kokum, jamun, aam panna and golgappe. These
drinks do not contain added flavor and preservatives. In July, 2015 Hector Beverages raised another 183 Crore
investment from its current and new investors, which is currently being used to create more flavors of Paper Boat.
By October 2014, Paper Boat had almost reached the break even point.
At this point of time Paper Boat is unable to meet the market demand, as a result, it is setting up a new plant in
Mysore, with the focus of this plant being on meeting Southern Indias demand. The Manesar plant will continue to
serve NCR and neighboring regions.
Distribution
Retail Stores: Consumption via retail stores is the highest in Bangalore and NCR. Chennai and Hyderabad Due to
discrepancies in the distribution, they havent been able to capitalize on the Mumbai-Pune market. They view Goa
and the seven sisters as huge potential markets.
Bars/Cafes/Airlines: Paper Boat drinks are used in many a cocktails and mocktails, hence they have tied up with
cafes like Barrista Lavazza and many a bar. Also, they have an arrangement with airlines like Jet Airways and
Indigo.
e-Commerce: The term is self-explanatory, recently it has also started the supply of Paper Boat through e-tailing.

The Life is still Beautiful Campaign

In July, 2013, Paper Boat launched a social media campaign in order to advertise itself. The primary objective of the
social media campaign was to make the youth reminiscent of their childhoods. The campaign struck a chord with
the target audience, which led to the growing organic fan base and arguably amongst the highest consumer generated
engagement on a beverages Facebook page. This campaign brought viral a reach of 40 million to Paper Boat.
Recently, it launched a video on Youtube with the similar background, and this video is now being turned into 30
second snippets, in order to turn it into television commercials.

Segmentation, Targetting and Positioning

Segmentation:
Segment: Fruit based beverage
Basis of Segmentation:
1. The functional, non-carbonated drinks market in India is projected to cross Rs 1,000 crore by end-2015,
according to industry estimates.
2. Consumers are seeking healthier beverages due to rising awareness levels with regards to obesity and
health issues, especially amongst teenagers and young adults.
Target Markets:
1.
2.

Youth of age 25-35, from all income groups in Tier 1 and Tier 2 cities.
Diaspora in US, UK, UAE and Canada.

Positioning:
1.
2.

A Brand synonymous with traditional Indian taste.

A Brand for the health conscious Indian Consumer.

Positioning Strategies:
1.

Social Media campaign- Life is still good, started in 2013 which involved posts and blogs invoking
nostalgia in 80s and 90s kids led to higher consumer generated engagement. Within ten months of the
launch of the campaign, close to ten thousand people wrote to Paper Boat. Their posts garnered over
100,000 likes and nearly 15,000 shares. This led to Paper Boats organic reach of 5.2 million unique

users and a viral reach of about 40 million users. It has recently launched a video on YouTube which is
2.

set to be converted into short snippets in order to be used as TVCs.

It continually stresses that it is a beverage brand sans preservatives and additives, which is made to
appeal to the health conscious Indian consumer.

Evolution of STP strategies:

The brand is fairly new and for the past two years, it has been following the same strategy as its tagline-Drinks and
Memories, the only difference is that now it has progressed from only social media campaign to other media such as
videos and TVCs.
Influence of Environmental factors and Consumer behaviour:
1.
2.

India is a hot country, therefore the need for cold beverages is always high.
They are targeting the youth from 25-35 years of age. These are the people who have moved out of
their homes and have started leading an independent life, hence they immediately strike a chord with

3.

the nostalgic positioning of the brand.

The youth is currently averse to carbonated soft drinks hence Paper Boat becomes a much better
alternative.

Analysis of Industry attractiveness:

Using Porters Five Force Analysis:
1.

Bargaining power of buyers: The product is placed in departmental stores where consumers
can access it. As these outlets buy in bulk hence they have Medium Bargaining Power. Also,
Tuck shops inside corporate do buy in large quantities. Thus, as a mix of all the consumers,
bargaining power of buyers is Medium.

2.

Bargaining power of suppliers: The basic pre-mix of the drink is supplied by just one
company and thus supplier of this material has High Bargaining Power.

3.

Competitive Rivalry: There are a number of existing rivals in the industry like Minute maid,
Slice, Maaza and Nimbooz. However, price differential reduces the power of the rivals. Still, on
the whole competitive rivalry for Paper Boat is Medium.

4.

Availability of Substitute: The availability of substitutes for the juice drinks is high and hence
threat is High.

5.

Threat of new Entrants: India is considered to be an unexploited market for juice drinks with
high growth potential for competitors to enter the market and thus, the threat of new entrant
is High.

Estimated PLC of the Product:

As Paper Boat doesnt reveal its sales and market share, this is our estimate:
1.

The product is in its growth phase, as, it is setting up new plants in order to meet the increasing

2.

demand.
Despite having so many variants, a few years down the line, the product would reach the maturity state
as, other companies like Dabur are entering the market with similar products.

References
http://www.foodnavigator-asia.com/Markets/Indian-non-carbonated-beverage-market-to-boom-says-report

http://tarunguptaspeaks.blogspot.in/2014/10/indian-beverage-industry-market.html

http://www.paperboatdrinks.com/hopefloats

http://www.ft.com/cms/s/0/9910d832-bdca-11e4-9d09-00144feab7de.html#axzz3ku7hBShR

http://www.paperboatdrinks.com/p/why-paper-boat-

http://www.livemint.com/Companies/xxtaAZ7l4Wq1ayNDFrnGMP/Paper-boat-surprises-its-makers-withbuoyant-sales.html