Indian Softdrink Industry Analysis

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Indian Softdrink Industry Analysis

By | October 2008
Page 1 of 11
1. INTRODUCTION
For a number of years the main competition in the non - alcoholic sector was the battle between Coke and Pepsi for the cola market. But as the customer preferences and concerns started to change, the industry's giants have begun relying on new product flavours and looking to noncarbonated beverages for growth. Globally, the market size of this industry has been changing. Soft drink consumption has a market share of 46.8% within the non-alcoholic drink industry. Datamonitor (2005) also found that the total market value of soft drinks reached $307.2 billion in 2004 with a market value forecast of $367.1 billion in 2009.

The modern soft drink industry started in 1886, when Dr. John S. Pemberton invented "Coca Cola" in Atlanta, Georgia. This was followed by the invention of "Pepsi cola" in 1898 by Caleb Bradham. In India the two major player Coca cola and Pepsi made their entries in 1977 but then the market was not that much friendly to the foreign companies. More over the political situation was also not conducive for the foreign companies. But later on the situation post reforms began to look up for these two giants. In 1990 Pepsi-Cola went on sale in India for the first time in 28 years after a six-year battle to sell the US soft drink in India. In 1997, to ensure fast re-entry, Coca Cola paid $40 million to buy the biggest Indian soft-drink brands, including ThumsUp, from a family-owned business. In recent years the soft drink industry in India has been hit by the concerns over health and environmental aspects.

2. MACRO ENVIRONMENT INFLUENCES
2.1Political Factors
The entry of the global soft drink giants in India was possible following the liberalization policies initiated by the government in the 1990s. This was ironical in the case of Coca – Cola Company considering that it was government policy that had been responsible for its exit from the Indian market earlier. For any industry the government regulatory...
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