Ibe Group 8 Soft Drinks

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International Business Environment
Analysis of Soft Drinks Industry

Table of Contents

Executive Summary ........................................................................................................................... 3 Introduction ...................................................................................................................................... 4 Objectives of Study ............................................................................................................................ 5 Data Analysis for Indian Soft Drinks Industry...................................................................................... 6 Industry Analysis ............................................................................................................................... 7 (a) The industry’s response to reform initiated by the government since 1991 ............................ 7 (b) Porter’s Five Forces Analysis of Industry Competitiveness ...................................................... 9 Findings and Recommendations ...................................................................................................... 12 Conclusion....................................................................................................................................... 13 References ...................................................................................................................................... 14

List of Figures
Figure 1 : India: Soft Drinks Market by Category (2008-2010) ............................................................ 4 Figure 2 : Porter's Five Force Analysis................................................................................................. 9

List of Tables
Table 1 : Growth Rates of the Soft Drinks Industry in India ................................................................. 6 Table 2 : Geographic Segmentation of the Indian Soft Drinks Market ................................................. 6 Table 3 : Demand of aerated soft drinks in India ................................................................................ 6

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Declaration

We, Sailendra Kumar, Sruti Pujari and Deepti Singh hereby declare that the report titled “Analysis of Soft drink industry” has been done jointly by us. This is an original work carried out by us and no part of this report is copied from other published or unpublished work/sources.

Sailendra Kumar (PGP28229)

Sruti Pujari (PGP28249)

Deepti Singh (PGP28269)

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Executive Summary
Indian soft drink industry in predominantly dominated by two players namely Coca Cola and Pepsi. With an annual CAGR of 4.5%, the industry is worth INR 60 bn. This industry primarily comprises of concentrate manufactures and bottlers. Concentrate manufactures have the command of the industry, since they are the ones who produce concentrates aligned to the tastes and needs of the consumers and bottlers merely use this concentrates to manufacture soft drinks. Soft drink industry has seen lots of Ups and downs since 1970. Coca-Cola was the first International brand to enter the Indian soft drink market, but due to stringent government tax regime and mandatory disclosure of cola recipe chose to leave the country .This paved a way for the local brand to flourish during that period. Parle took the advantage and launched several cold drinks like Thums-Up. Till 1990, Parle commanded a market share of 70% in the soft drink market. Post liberalization Coca-Cola re-entered the Indian market with acquisition of Thumsup. Post 1991 the PepsiCo and Coca cola took over the market .Despite high growth and attractive market arena, the industry has been marred by stringent government regulations. The high excise duty of 24% levied by the government has prevented the potential of market to grow at an efficient rate and soft drinks are still considered luxury products. In 2003 the carbonated soft drink sector suffered...
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