Soft Drinks Industry in India

http://www.euromonitor.com/Soft_Drinks_in_India Executive summary Soft Drinks Bounces Back After a somewhat subdued performance in 2006 due to a recurrence of the pesticides controversy, soft drinks sales bounced back strongly to record double-digit volume growth in 2007. With carbonates growth back on a positive upward curve alongside burgeoning sales of fruit/vegetable juice and bottles water, soft drinks showed impressive growth in 2007. Off-trade volumes grew slightly faster than on-trade volumes, driven by higher consumption of packaged and branded soft drinks at home and on the go. The emergence of supermarkets/hypermarkets, heavy consumer promotions and various new product launches played a key role in driving off-trade volume growth. Bottled Water and Fruit/vegetable Juice Continue to be Star Performers Soft drinks sales in 2007 were propelled by bottled water and fruit/vegetable juice with their healthier positioning helping to drive sales of soft drinks. While carbonates posted single-digit growth in 2007, rebounding from the pesticides controversy of 2006, it was bottled water and fruit/vegetable juice that stormed ahead with high double-digit growth rates. Poor municipal infrastructure for tap water has pushed sales of bulk packaged water to households. Fruit/vegetable juice is growing as a result of increased consumer expenditure on naturally healthy (NH) beverages. While functional drinks and RTD tea also posted impressive growth in 2007, they were growing from a very small base and are yet to achieve a critical mass in terms of establishing a loyal consumer base. Coca-Cola India and PepsiCo India slip in shares With consumers showing a growing preference for healthier soft drinks such as bottled water and fruit/vegetable juice rather than carbonates in 2007, the two carbonates giants suffered a marginal decline in share. Although both players embarked on a change in strategy to focus more on non-carbonated soft drinks in their portfolios, they