On Juice Industry Deals With a Framework

The following sample essay on Juice Industry deals with a framework of research-based facts, approaches and arguments concerning this theme. To see the essay’s introduction, body paragraphs and conclusion, read on. Agriculture and agricultural output are very Important to the Uganda economy. The agricultural Industry Is the largest employer of Gangland’s with 75% of the population earning a living from the industry. Food and agricultural raw materials account for 40% of the total exports from Uganda. Additionally, the sector contributes 22. 7% to the Uganda GAP.

The large contribution of agricultural products to the Uganda economy has led the government to promote value addition as a means of increasing the value of exports.

According to the Uganda Investment Authority (IA), the emend for Agenda’s organic products Is higher than the supply. This Imbalance presents a high opportunity for export of organic fruit Juice from Uganda. Fruits and farm produce are wasted or sold at very low prices during peak seasons due to inadequate storage facilities and lack of effective processing or preservation techniques, leading to high wastage levels.

Juice production not only serves to add value to agricultural export but also serve as a way to prevent wastage of excess fruits. The Juice industry has an opportunity to contribute to the Uganda economy y Increasing the value of the country exports and simultaneously preventing wastage of fruits so high in demand, and creating jobs for Uganda. Industry The Juice making industry in Uganda consists primarily of companies that produce “natural” fruit juices and companies that produce varying degrees of a mixture of fruit concentrate, fruit flavoring, sugar, and water.

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“Natural” Juices in the Uganda market are fruit drinks that consist primarily of Juice extracted fruit flesh or pulp. The table below shows the two sectors and the Ingredients for their Julies_ Industry Sector Description/Contents Flavored Juices Mixture of fruit juice concentrate, water and sugar Mixture of fruit puree, water, and sugar Mixture of flavoring, water, coloring, and preservatives Fruit Juices Juice extracted from flesh or pulp of fruit. The natural fruit Juices are targeted towards the upper and middle Income segment of the population while the fruit flavored Juices are marketed towards children and the low income segment of the population.

The flavored Juice companies are distributed across the country while the natural fruit juice companies tend to be concentrated in the greater Kampala region. A key distinguishing factor of the fruit juice Industry In Uganda Is that companies that make the flavored Juice drinks generally tend to be concentrated In the Informal sector. These companies are usually small, employing between one to six people. The mixing of the flavored juices usually occurs in one of the entrepreneurs homes. The juices are then packed in polythene bags and distributed and sold through roadside kiosks and street vendors. The flavored juice companies are often not able to break into the formal sector because they lack capital to meet the operational and production requirements set y Uganda National Bureau of Standards (NUBS) for Juice producers.

The natural luck producers tenant to De larger organizations employing Trot Detente twenty to two hundred people. The Juices are made in factories and then distributed to grocery stores, schools and other vendors. There are a lot of natural Juices that are imported into Uganda. The table below shows the major players in the Uganda Juice market. It is important to note that a lot of the flavored Juice manufacturers are captured in this table because of the informal nature of those companies. Juice Industry Value Chain and Main Processes Fruit Production Fruit production is the responsibility of farmers. In the Uganda market farmers can be classified in two groups: Small scale farmers The majority Uganda farmers fall into this category.

These farmers are distributed across the country and grow fruits on relatively small plots (a few acres). Small scale farming is also characterized by a low use of fertilizers, pesticides, and other improved farming techniques. As a result, they suffer from low and unreliable production. In addition the harvesting methods employed by these farmers often lead to damaged and bruised fruits. Commercial Large scale farms The commercial fruit farms own very large areas of land.

They use mechanized and technologically advanced processes to cultivate the land for fruit production and as a result are able to obtain very high quality fruits and high yields. Fruit Transportation Once the fruits reach maturity and are harvested they may go to the fresh fruit market, in order to be consumed fresh, or squeezed freshly at home to be consumed as Juice, or it may enter the processing industry, in order to obtain Juice or other by products. Transporters are responsible for getting fruit from the farms to any of actions discussed above.

In Uganda there is an abundance of fruit transportation companies, fruit traders, whose sole business is collecting fruits from firms and delivering them to stores, exporters, and food processors. In other cases one will find that many companies have vertically integrated fruit transportation into their businesses. It is not uncommon to find food processors, exporters and wholesalers who buy directly from farmers and manage the transportation of the fruit themselves. Fruit Processing The fruit processors are responsible for converting the fruits into Juice and other by rodents.

Fruit Juice processing consists of extraction, filtration, iteration, bastardization and packaging. The fruits are sorted, washed and prepared for extraction. There are several methods of extracting Juice, depending on the type of fruit. The filtration phase involves the isolation of the pulp from the Juice. The third process of iteration is performed to remove the dissolved oxygen. It is done by spraying the Juice into the vacuum chamber or allowing it to flow over a series of baffles (a device for checking or impeding the flow of gases) while subject to a high scum.

Oxygen reacts with the Vitamin C causing deterioration of Juice flavor as a result of other chemical reactions. Bastardization is a sterilization process which slows microbial growth in the Juice. Bastardization involves heating the Juice too specific temperature for a definite length of time, and then cooling it immediately. In the packaging stage clean containers are filled with hot Juice from the pastries. They are then immediately sealed and rapidly cooled. Once packaging is complete ten products are ready to De leverage to ten market. Julie Outlanders

Distributors are responsible for delivering the packages Juices from the producer to the retail outlets and in some cases directly to consumers. Like fruit transportation, distribution is another area that is often integrated into the Juice producer’s business. Fruit Juice is often distributed through wholesalers and exporters. Sales The sales outlets are locations where consumers go to purchase the fruit. In the Uganda context they are primarily retail outlets. The retail outlets that I encountered are: Grocery Stores Gas-Station Convenience Stores Kiosks Street Vendors Customer

The fruit Juice industry in Uganda serves both the institutional and household consumers. Suppliers Suppliers to the industry differ for each of the sectors that were defined earlier in this paper. The primary suppliers for the natural Juices are fruit farmers and fruit traders. Suppliers for the flavored Juice sector are the importers of fruit flavors and retailers who sell fruit Juice concentrates. The main supply related challenges for flavored drink producers occur because the main ingredients for their Juices are not produced locally and are imported. The ineffective customs handling of exports often lead to shortages (and associated price hikes) in the supply of concentrates and fruit flavoring. Other than the increase in input prices, the producer may also experience quality/taste degradation. For example a producer may use a particular brand of concentrate in its production process, when the concentrate becomes unavailable the producer now has a choice of shutting down production till the concentrate becomes available or using a different brand of concentrate.

A different brand of concentrate results in the product tasting different. For the flavored Juice sector, suppliers are able to exert significant power over the Juice producers because of the producers need to maintain consistent taste for their products. A retailer or importer may choose to raise prices for a unique concentrate or flavor. Fruit Juice companies may chose to buy directly from farmers and incur the cost of transportation from the farmer to their factories or they chose to deal with fruit traders deliver directly to the factory. When dealing directly with farmers the Juice companies are able to extract profits from the farmers but lose some of this advantage to the cost of transportation. With a lot of the farmers being distributed across the country, transportation costs to the Kampala region (where most Juice companies are located) can be quite significant.

The following table shows the locations of different fruit farmers. The traders are not able to exert any supplier power on Juice producers because of the large number of traders and relative homogeneity of the service provided. The low capital requirements combined with the lack of regulatory enforcement ensure that barriers to entry and exit in the flavored Juice sector are very low. Additionally consumers of Juices in this sector are very price sensitive and not concerned about rand loyalty. Entry barriers for the fruit Juice sector are much higher than that of the flavored Juice sector. The reason is because the entry requirements into this sector require high capital investments. In addition to the high capital investments, brand equity may be difficult to build because of customer loyalty to existing brands.

Market leaders tend to securing supply contracts for primary and secondary school cafeterias. Compared to the flavored juice sector, there are fewer numbers of companies (all are registered) who compete within the fruit Juice sector. Britannic (makers of Splash Juices) appears to be the market leader based on volumes carried in retail outlets . Despite the few number of coal natural Juice producers, competition is fierce within this sector as there are a lot of imported Juices on the market. There is very little competition between the flavored and a fruit Juice sector as the consumer base for each sector is highly segmented. Mall Players Ana contacts A complete directory of business contacts is attached in the appendix.

Industry Fit The table below shows the level of fit for the Juice industry subsection for the common characteristics that PIP is seeking across countries: Priority Characteristic Rationale “Natural ” Juice Companies Fit Flavored Juice Companies Fit Required Many different small firms with 5- 50 employees each Small and medium but not micro enterprises, which will not be big enough to have the same management/labor issues Required Employs relatively low-income or unskilled/semi-skilled workers Want to make sure that Job creation would not be limited to the highly educated or wealthy Preferable A significant role in the Uganda economy, either in terms of employment or GAP Preferable High geographic density of firms To insure that future mentoring interventions will be logistically feasible and affordable