market research

Topics: Soft drink, Coca-Cola, Carbonated water Pages: 9 (1906 words) Published: November 3, 2014
Mark Researcher- Paper Boat

Overview of the Industry
Industry Highlights:
Global Soft Drink Industry - $310Billion (2015 Expected)
Indian Beverage Industry - $230 Million of the $65Billion Food Industry Current Growth Rate: 15% & Expected Rate: 16-17%
Coke & Pepsi Co covers 90% of the market.
Juices will surpass carbonate market by 2016
The global soft drink industry is estimated to reach $310 billion in 2015. The soft drink industry spans sparkling drinks, bottled water, smoothies, ready-to-drink tea, concentrates, juices and coffee and functional drinks. In a recent survey conducted by Associated Chambers of Commerce and Industry, consumers are seeking healthier beverages even if they are more costly, due to their positioning. The rising awareness levels with regard to obesity and related health issues, especially amongst teenagers and young adults, have helped push sales of non-carbonates. The report revealed that there has been a strong recent shift in consumer beverage demand towards non-carbonated alternatives creating opportunities for drink manufacturers in the country. The report also pointed out that juice segment is the fastest growing segment with the growth of 3035% annually while the fruit drink industry has been witnessing growth of 10-15%.

Beverages account for $230 million in the $65 billion food processing industry in India. In terms of volume, total soft drink (carbonated beverages and juices) market is estimated at 284 million crates a year ($1billion).

The market is predominantly urban (75%) and (25%) contribution comes from rural areas.

In the year 1990 people got more inclined towards living a healthy lifestyle. Beverages which fit into this category were water, natural beverages (such as tea and sodas) and juice based sparkling waters and drinks. Juice based drinks were the ones which saw sudden growth.

In the latter part of the year 2000, due to the economic slowdown, there had been a negative impact on the food and beverage industry. The beverage sector witnessed a decline of 73.2% in terms of transaction value and 37% decline in the number of transactions.

The consumption of aerated beverages in India has increased from a meager three servings per person, per annum in 1993 to 14 servings in 2013. Given the sheer weight of Indian population this is huge to reckon with for the world's leading food and beverage corporations, even though the global average is 94 servings. The non-alcoholic beverage segment can broadly be classified under three categories: carbonated drinks, fruit drinks and functional drinks.

Some of the highlights of Indian soft drinks market are as below: Soft drinks market of India is expected to be the fastest among all global markets. The companies, both local and global giants are looking to adopt aggressive strategies to expand their business. Coca-Cola and PepsiCo are leaders in this segment. Consumers have started thinking seriously on healthy living. So, products like fruit juice are expected to have good growth in future. Soft drinks manufacturers are also customizing their products to address this change E.g.: Cadbury India, launched juice drink Tang Mango focusing more on the nutritional aspects of the drink.

Consumers were likely to switch to those drinks which are perceived to be healthier in comparison to the traditional carbonated drinks.
Coca-Cola is planning to invest US$5bn into its regional operations before 2020. And PepsiCo is also considering investing US$5.5Billion in its India operations by the end of 2020. The Finance Minister has proposed to levy an additional duty of excise at five per cent on aerated waters containing added sugar seen as a negative decision for the industry.

The Company
The Company behind Paper Boat is Hector Beverages Pvt. Ltd. a beverage company started by a group of 4 Wharton, IIM and MDI alums, all of them seasoned beverage industry professionals. They have already made a splash in the market...
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