| Make foodmate.com your Homepage | Wap | Archiver
Advanced Top
Search Promotion
Search Promotion
Post New Products
Post New Products
Business Center
Business Center
 
Current Position:Home » News » Beverages & Alcohol » Beverages » Topic

Non-alcoholic drinks segment has been growing rapidly for past few years

Zoom in font  Zoom out font Published: 2012-07-17  Origin: fnbnews
Core Tip: The Indian beverage market has observed strong growth over the past few years.
Economic liberalisation and rising income of middle-class population have had a positive impact on consumer spending and consumption in both rural and urban areas. Indian consumer now spends a significant proportion of disposable income on food and other essential commodities. Several other factors like demographic and macro economic conditions have also given fillip to expenditure on food and beverages in the country. 

The non-alcoholic drinks market has witnessed rapid growth over the past few years in India. Increasing middle-class population, rapid urbanisation and rising disposable income are some of the major factors fuelling this growth. The industry is broadly classified into soft drinks and hot beverages. The carbonated drinks market is close to Rs 6,000 crore and is growing by 10-12 per cent annually. The fruit-based beverage market stands at Rs 5,000 crore and is growing at 35-40 per cent annually. The fruit-based beverage market is divided into three segments - fruit drinks, nectar and 100 per cent juice. Coca-Cola, PepsiCo, Parle Agro Pvt. Ltd, Dabur and Godrej are among the leading players in the domestic non-alcoholic beverage circuit, highlights a certain study. 

Carbonated or aerated drinks account for about 30 per cent of the total non-alcoholic beverages market in the country. The size of the segment is currently estimated at about Rs 1,800 crore, while the value of the fruit drink segment is estimated at about Rs 1,200 crore and the energy drinks market is worth about Rs 600 crore. The functional drinks segment is dominated by energy drinks. The current market size of energy drinks in India is around Rs 500 crore and it is expected to grow at a CAGR of 25 per cent. Within the hot beverages category, India is the largest producer of tea with a total turnover of around Rs 8,500 crore, growing at a rate of 1-2 per cent annually. India is the world's fifth largest producer of coffee, accounting for 4 per cent of the world's production. The fruit / vegetable juice segment is expected to grow at a CAGR of 30 per cent in value terms, followed by the energy drinks segment at a CAGR of around 25 per cent in value terms.

Non-alcoholic beverages 

Soft drinks constitute the third-largest packaged food segment in India after packaged tea and packaged biscuits. But the penetration level of carbonated soft drinks in India is still low compared with other developing markets, a sign that this market has potential for rapid growth. The market size for bottled water in India had an estimated value of US$570 million in 2008. With annual growth of 14.5 per cent, sales of bottled water are set to increase rapidly over the next five years. The market for juice will also grow dramatically in coming years with an annual growth rate of almost 15 per cent. 

Milk

Unlike most other Asian countries, dairy products are a well-established part of the national diet in India. With an annual output of more than 100 million tonnes, India is the largest milk producer in the world. Currently, only 13 per cent of the milk is processed. The unorganised sector distributes 85 per cent, however, the organised sector is growing rapidly. Demand for packaged milk and milk products will increase because the growing middle-class, health-conscious consumer segment - especially in towns and cities - is adopting Western lifestyles and consequently buying more and more processed and packaged food. The availability of fresh / pasteurised and long life / UHT milk is increasing nationwide.

The Untapped Market

The large untapped market potential is for store-bought non-alcoholic beverages, particularly carbonated beverages, juice-based drinks and energy or sports drinks among urban or suburban consumers in India. Approximately 120 billion litres of beverages are consumed by Indians every year, but only 5% represent store-bought packaged beverages. The majority of Indian consumers (75%) still consume non-alcoholic store-bought beverages less than once a day, highlighting a large untapped market opportunity, particularly in the carbonated drinks and juice or juice-based. In order to increase consumption and penetration of such beverages manufacturers will have to address the two primary reasons why some Indians abstain entirely, that is, health concerns and undesirable taste. The study investigates consumption frequency and habits, the importance of various product attributes, and brand preferences across age, household income, city in India and beverage category. This study has implications for manufacturers, distributors, retailers and investors hoping to capitalise on the growth of these beverage categories in India and distinguish themselves in the increasingly crowded market place.

India is a booming market for the beverage industry as well. It already accounts for about 10 per cent of global beverage consumption today. This means that the country has the third-largest beverage consumption after USA and China. But, that is not the end of the road. Market analysis indicates that beverage sales in India will be increasing by more than 60 per cent between 2008 and 2012. Since India is (still) a country of tea and coffee drinkers, packaged cold drinks have enormous potential. All in all, annual per capita consumption of packaged beverages is supposed to triple from 2.6 litres in 2000 to 8.7 litres in 2012. Demand for milk and milk-based beverages are also rising. India is the world's biggest producer and consumer of milk, since milk plays a major role in the Indian diet. The consumption of milk and milk-based beverages has increased by an annual average of 2.7 per cent in the last four years. The proportion of the market accounted for by packaged milk and dairy products are increasing, however. In the past four years, for example, demand for milk filled in pouches has grown by 4.5 per cent annually, while the figure for milk in cartons is about 25 per cent. The rising consumption is making it necessary for appropriate investments to be made by the beverage industry.

Key Risks to the Indian Beverage Industry

Water is the essential ingredient in a beverage product, as well as vital for cooling and cleaning during the production process. So when one considers that India's current water supply is approximately 740 billion m3, but it has been estimated that by2030 demand for water in India will grow to almost 1.5 trillion m3, the industry will clearly be facing a major problem there. There will simply not be enough water. Yet China, India and Indonesia are all a focus for beverage companies due to their lower market penetration. There can be little doubt, however, that water security issues will be one of the biggest threats to developing market potential. Let's first take a look at the alcoholic drinks industry.

The water bottles market is also booming. The market for bottled water is developing rapidly in Asia. Health concerns of polluted municipal water sources and increasing water shortages are expected to be key drivers of this, but wealth and the increase in Asian middle-classes will play the most significant role. Consumer demand for purity, hygiene and convenience is on the increase. In India the market is expected to grow by 100 per cent over the next five years and there are currently more than 2,000 bottled water producers. Whilst there has been a backlash against bottled water in developed countries as the environmental impact of plastic bottles becomes more apparent, in Asia it looks set to become an increasing trend.

Innovations and Trends in the Beverage Industry
" Coffee has been a big mover over the last year, particularly in the Horeca sector, with caramel and vanilla syrups, nuts and Fairtrade products all adding to consumer loyalty and profit margins. This is likely to transmute further into ready-to-drink products in cans, bottles and cartons - with indulgent, creamy textures running alongside an increase in cappuccino and espresso pods for home use.
" Natural energy looks like being a growing trend in 2012. Consumer awareness of ingredients is now at its highest level ever and 'natural' is a strong lever when it comes to beverage purchase. There is greater awareness, too, of terms such as 'antioxidant' and 'contains vitamin C', with consumers looking for dual functionality from their drinks. Added value in terms of being 'more than just hydration' is popular when it comes to meal replacement drinks such as smoothies.
" Carbonated soft drinks have seen resurgence in popularity over the last year as 'the affordable treat' for many families cutting back in difficult economic times. Diet and zero CDSes are now selling on 50:50 ratio, with full sugar carbonates in developed regions.
" Citrus-flavoured juice-enhanced drinks have found a good following during the past year, with some more exotic juice blends finding new favour, such as lemon and acerola cherry, coconut and pineapple and grapefruit and elderflower, to name just a few.
" Clear beverages are increasingly popular, with consumers seeing them as 'hydrating' and natural. More sophisticated alternatives for non-drivers and those watching their weight are appearing on the pub and club scene.
" Ready-to-drink teas are still growing in popularity across the globe, especially in 50 cl formats.
" Better quality drinks for children. Half-juice and water drinks are easier to drink and win parental approval.
" Packaging is improving its sustainable credentials in leaps and bounds, with biopolymers such as Coca-Cola's PlantBottle concept, increasing demand and use of rPET and brown paper cartons, and recyclable labels emphasising end-of-life planet awareness.
" Music festivals are now recognised as an important forum for beverages, not only for sampling, sales and marketing of drinks, but also for education regarding recycling on a grand scale.
 
 
[ News search ]  [ ]  [ Notify friends ]  [ Print ]  [ Close ]

 
 
0 in all [view all]  Related Comments

 
Hot Graphics
Hot News
Hot Topics
 
 
Processed in 0.396 second(s), 17 queries, Memory 0.86 M
Powered by Global FoodMate
Message Center(0)