Soft Drinks India

Topics: Soft drink, Coca-Cola, Juice Pages: 5 (1723 words) Published: September 4, 2011
Soft drinks in India – Huge Potential Ahead
According to the ‘Product Insights: Soft Drinks in India’ report, The global soft drinks market grew at a compound annual growth rate (CAGR) of 3.45% from 2005 to 2009 and was valued at $494.5 billion in 2009. New product launches in the global soft drinks market increased by 8.59% in 2009. The US was the top country by retail sales as well as by number of new product launches, followed by Japan which ranked second in both categories. Globally, India ranked 25th in terms of retail sales and 13th in terms of the number of new product launches in the soft drinks market in 2009. In spite of India’s huge population and the fact that around 47% of the population is composed of persons below 30 years of age, the per-capita consumption of soft drinks in India remains very low, at approximately at 5.2 liters against the world average of nearly 85.22 liters. Developed countries such as the US, Germany, Italy and Spain all have per-capita consumption in the range of 280-400 liters, showcasing the huge potential for market growth in India. Coca-Cola remains the market leader in the carbonates category with a market share of more than 60% in the Indian market, followed by Pepsi with around 35%. In the bottled water category, Parle’s Bisleri and Kinley from Coca-Cola are the leading players. The packaged juices market in India continues to be dominated by Maaza and Frooti, followed by brands such as Slice, Tropicana and Real which have registered good growths in their market shares in the past few years. Red Bull with its strong dominance of the energy drinks’ category, which is the largest segment in the functional drinks category, is the market leader in the functional drinks market. Considering the overall development of the Indian soft drinks market, a comparison can be drawn between various soft drink categories based on the major consumer segment for each category using age and economic status as the two judging criterion. For instance, while carbonates are consumed by consumers from almost all economic segments and ages in the India, considering the various packaging sizes and price points for these products, segments such as energy drinks and sports drinks are mainly consumed in the age group of around 24 years who are on the higher side in terms of economic status, i.e. working executives and the affluent class. Based on these trends, a comparison chart can be drawn between the different soft drink categories in India as given below:

60 years Juices 40 years Carbonate Nutraceutic al Drinks Carbonate X-Axis: Consumer Economic Segment Y-Axis: Consumer Age Group

Juices 24 years Carbonate 15 years Middle Working Executives/Upper Middle Class

Energy Drinks and Sports Drinks


Current Situation: According to the ‘Product Insights: Soft Drinks in India’ report from Datamonitor, With improving literacy rates, consumers have become increasingly aware of health and fitnessrelated issues. Additionally, due to greater disposable incomes, particularly in urban areas, consumers are seeking healthier beverages even if they are relatively more expensive, due to their positioning. Raising awareness levels with regard to obesity and other weight related health issues in the last decade, especially amongst teenagers and young adults, has helped push sales of non-carbonates. Sales of noncarbonated drinks also got a boost from the pesticide controversy which led some consumers to switch loyalties from carbonates to juices, functional drinks etc. Products such as Juice are now fast becoming as an essential part of breakfast table with urban families. Leading beverage corporations such as Cocacola and PepsiCo have identified this trend and are adopting strategies to benefit from this development. Previously, product strategy of these large corporations was largely Cola based; given that a large part of their product volumes would come from the carbonates segment. However, in the last...
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