BEVERAGE MARKET IN INDIA

Table of contents
Key Highlights ...........................................................................................................................................................................2
Various br ands and concepts emerging recently ..............................................................................................................3
Growth of Beverage m arket ..................................................................................................................................................4
Naturally healthy beverages..................................................................................................................................................5
Non-alcoholic Beverages Mar ket..........................................................................................................................................7
Hot Beverages .................................................................................................................................................................7
Carbonated Drinks..........................................................................................................................................................8
Powdered drinks, energy drinks and juices ..............................................................................................................9
Market size of the food and beverages industry across India from 2015 to 2020 ................................................. 13
Market value growth of the beverage industry in India from 2012 to 2016 with a forecast for 2021............... 13
Non-Alcoholic Drinks st atistics........................................................................................................................................... 14

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Beverages market to grow 3.5 times of its present size by 2020

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List of few start-ups in the beverages market (refer to the excel sheet for an indicative list):

Brand Name Category

Bounce Super Drinks Flavoured Vitamin based drinks
Eten Craft Ready to drink tea
Juicemaker.in Healthy juices, salads and breakfasts
Yose Detox drinks
Drink Goodness Cold brewed coffee and smoothies
Drunken Monkey Smoothies
Sleepy Owl Cold brew coffee

Naturally healthy beverages

Naturally health beverages for the purpose of this report consist of 100% fruit juice, natural mineral
water, green tea and malt-based hot drinks. For all categories in this high-growth segment, the most
important growth drivers are awareness about health benefits of consuming these products,
increase in disposable incomes and urbanization.
Urban India is the key growth driver for naturally healthy beverages. With lifestyle diseases and
conditions, such as hypertension and diabetes, experiencing an exponential rise in the country, an
increasing number of Indians are opting for healthier options, such as naturally healthy
fruit/vegetable juice, fruit-based drinks and nectars.

The Indian bottled water industry has witnessed an unprecedented boom in recent years, again
owing to the improvement in living standards of the middle class and a significant increase in their
disposable incomes. With the increase in awareness about health benefits of natural mineral water,
this segment of bottled water industry is also going to be promising. Further, increase in tourism and
also increase in consumers visiting hotels, restaurants, fitness clubs and air ports is driving growth in
this segment. The key consumers would therefore be the tourists and high-profile customers who
demand only premium products or Indians who have travelled abroad and have tried natural
mineral water. Further, the increase in the expatriate population as well as the increasing consumer
awareness and brand consciousness amongst Indians is increasing the demand.

In India, malt-based beverages are also called health drinks as they are fortified with nutrition and
used to enhance the taste of milk. Malt has always been a part of the diet of growing children and
the elderly as a nutritious supplement. While marketers have positioned such beverages as
nutritious drinks, these are also widely consumed as taste enhancers to encourage drinking of milk
among growing children. Greater health consciousness, aspirations for higher standards of living and
comfortable disposable incomes become the main drivers of consumption patterns.

More and more tea makers are adding green tea in their portfolio as consumers in India are
developing a taste for the beverage for its many health-promoting effects.

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Naturally healthy beverages categories for the purpose of this report

The naturally healthy beverages market in India could be divided into:

► 100% fruit/vegetable juice or superfruit juice, e.g., ceres orange juice has no preservatives,
artificial color or flavor; Tropicana cranberry delight

► Natural mineral water, spring water

► Cereal/pulse-based drinks, other Asian specialty drinks

► RTD green tea, herbal tea, other naturally healthy tea

► Malt-based hot drinks, other plant-based hot drinks

Naturally healthy beverages: Comparison with global markets

The Indian natural healthy beverages recorded a robust 22% growth rate in 2016. If compared with
countries like China, Indonesia, Brazil, Mexico, Singapore and Thailand, the only country that had a
double-digit growth rate in 2016 was Brazil, which recorded half the growth rate of India, i.e. 10%.
With India’s demographic advantage over the other global countries, this high-growth segment
clearly advantageously stages India to the most important market for the industry players globally .

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Naturally healthy beverages - Key players in India

Dabur led the category and also achieved a strong increase in sales in naturally healthy beverages in
2016. This was mainly due to the popularity of its Réal brand and its wide distribution, which further
helped boost the brand’s performance.

(Source: https://foodprocessingindia.co.in/pdf/high-growth.pdf)

Non-alcoholic Beverages Market

According to a report, the beverage category contributes 8-9% of the Indian FMCG market. The
market is growing at 20-23% and is expected become three times the current size by 2020. The
recent liquor ban could turn the game in the favor of non-alcohol beverages and can fuel further
growth than the estimated projection.
The non-alcohol market is divided into three main categories:

• Hot beverages
• Carbonated drinks
• Powdered drinks, health drinks and juices
• Mineral and flavored water

Hot Beverages
The coffee & tea industry is expected to reach Rs41,800 crores by the end of 2017 as the domestic
consumption is rising swiftly. There is no denying the fact that the Indians love their tea and coffee
when it comes to something garam. India is the largest tea producing and consuming country and
still rules over coffee. However, the coffee has gradually evolved i nto a lifestyle beverage with the
mushrooming of branded coffee outlets as a popular hangout with friends or colleagues.

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Carbonated Drinks
Coca Cola introduced Indians to the taste of cola in 1970, before exiting the country in 1977 due to
changes in the government policies. Parle which was facing stiff competition from Coca Cola then
took over the reins by launching new carbonated drinks such as Thumbs Up, Gold Spot and Limca.
However, Parle’s supremacy lasted only until 1990 when Coca Cola and Pepsi forayed into the Indian
market. Today, Coca Cola and Pepsi together contribute to more than 60% of the carbonated drinks
market. The rest is controlled by Parle, Dabur, Bisleri and other local brands.
However, over the past few years, non-cola aerated drinks, especially those with fruit content has
gained traction. Hence, these brands are keen to explore this new market as well. For example:
• Parle has recently introduced Frooti Fizz, a fizzy version of its popular mango drink.
• Earlier this year, Bisleri International launched Bisleri Pop, an aerated fruit-based drink.
• Dabur has also launched a range of fruit juice based aerated drinks under the brand Real Volvo.

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However, cola based carbonated drinks are reeling under stagnation and sales have dipped as an
increasing number of people are switching to juices and other health drinks. People around the world
are becoming health-conscious and understand that carbonated beverages are high in sugar and lack
nutritional content.

Powdered drinks, energy drinks and juices

Remember Rasna, the soft drink that every home served in the 80s? Rasna has evolved over the
years but has lost its market share to other non-alcoholic beverages and its only competitor Tang.
There isn’t much product innovation in this category, so its growth potential is not very optimistic.
It is the juice market, which are flourishing extremely well in India. It is valued at Rs 1,100 crore
($200 million) and is projected to grow at a CAGR of 15 per cent over the next three years. The key
drivers of growth of juice market are rise in the disposable income, people adopting Western
culture, health awareness and import of fruits to India.

In fact, juice and juice-based drinks are growing 2.5 times faster than aerated drinks. As per the sales
figures of 2016, juices and juice drinks such as Real, Slice, Tropicana, Rooh Afza, and Tang toppled
Pepsi and Coca-Cola out of the top 5 highest sold brands across modern retail chains.

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The phenomenal success of Manpasand Beverages which from a Rs 400 million revenues in FY 2010
has grown to revenues of Rs550 crores in FY 2016 and has a market cap of greater than Rs3500
crores is strong testimony to the changing juices sector India. Sequoia invested in Paper Boat and
recently in cold pressed juices, RAW. The market for juices and health drinks has tremendous
potential and will continue to attract strong interest from the private equity and venture capital
community.
Energy drinks are still an urban phenomenon and at nascent stage, but its opportunity is huge. The
energy drinks market, which was estimated to be worth Rs120-130 crores in 2010, has grown in
excess of 40% year on year during last 4-5 years.

The brands in this segment are mainly targeting school kids, college students, health freaks, sports
professionals and young working adults who are looking for stamina boosting beverages. Red Bull is
the market leader and continues to enjoy the first mover advantage, however, other the presence of
others brands like Monster, Mountain Dew, Cloud 9, Cafe Cuba, Xtra Power and Burn indicates the
potential of this segment.

Mineral and flavored water

This particular category has created its unique place in the beverage market because it is growing
much faster than carbonated drinks.
This market is expected to grow at a CAGR of 22 percent, to reach Rs160 billion in 2018. Nearly 67
per cent market share of the sector is held by the top five players such as Bisleri, PepsiCo, Coca-Cola,
Parle and Dhariwal. Mineral and packaged water bottles which were considered a lux ury and that
too, only during travelling are now commonly available at every nook and corner of the country. The
rise in the consumption of mineral water has been mainly due to increasing awareness about health,
increase in tourism and easy availability of bottled water.
There is a new variant called flavored water that has taken over the luxury tag from mineral water
bottles. The target market is the people who prefer healthy lifestyle on the go and love to drink
water infused with vitamins, natural flavors or nature identical flavoring substances such as basil,
lemon, mint, orange, hibiscus, fruits, etc. O’cean, Blue and Qua are some brands in this category.

The Indian beverage market is witnessing an interesting transformation. On one hand, we have the
liquor market, which is trying to pull itself out of the SC ban shock. On the other hand, we have non -
alcoholic market, where the traditional tea & coffee still retains its unique position, while the earlier
popular carbonated drinks are now giving way to juices, health drinks and flavoured water.
With so many players in the beverage market, it is definitely a war of the brands worth watching.

Source: http://www.aurumequity.com/the-indian-beverage-market-story/

Energy Drinks
Talking of growth, market potential, sales and profitability in the beverage category, the energy
drinks segment has been attracting a lot of consumer traction and performed impress ively in recent
years. Since its emergence in the Indian market, the energy drink category has enjoyed remarkable
success, displaying a good growth in sales. “India’s energy drink market was valued at USD 3663.7
million in 2017 and is expected to reach USD 4626.1 million by the end of 2022, growing at a CAGR
4.5 per cent. Increased urbanisation, rising disposable income and growing health consciousness
among the Indian youth has increased the demand for non-carbonated drinks. At the same time,
long and erratic working hours and the trends of social gatherings are driving Indian consumers
towards the consumption of energy drinks. So there exists plenty of demand for the category,” says
Abhinav Biswas, Sales and Marketing Head, Goldfogg India. It shows that today energy drinks are no

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longer confined to bottom shelves of modern retail and have acquired the status of mainstream
beverages.

Source: https://www.franchiseindia.com/restaurant/How-Beverage-Market-is-Enlarging.9741

The global energy drink market grew 14-15% in 2011 to ~USD 4.1 billion, accounting for 8-9% of the
global soft drinks industry. In the US, the energy drinks segment continued its strong success
reaching ~USD 700 million, growing at a CAGR of 6-7%. Red Bull, Hansen Natural’s Monster energy
drink and Rockstar remain the top 3 brands in the US. In the UK, energy drinks sales grew to ~USD
159.1 million at a CAGR of 6-7% as energy shots continue to expand the consumer base for energy
drinks. This growth is also witnessed in volume and is fuelled by the increasing emphasis on
packaging convenience and design to attract consumers. Although the US and Japan are considered
to be the key markets for energy drinks, the most dynamically growing markets are India, China and
Brazil

The Indian energy drinks market is currently estimated at ~USD 154.5 million and is expected to
grow at a CAGR of 28-30%. This growth was mainly driven by an extraordinary performance by Red
Bull, which has been the most dominant player in the caffeinated energy drink segment, and
Gatorade, which is the leader in the sports drink segment. In order to offset the increasing raw
material price, fluctuation in foreign exchange rates and rise in electricity costs, the current unit
prices have increased for energy drinks.

The energy drinks category is still at a nascent stage of development with existing players competing
for a bigger slice in the market. Gatorade (PepsiCo) is spearheading the sports drink segment and
has captured a significant share of the market. Other notable brands in this segment are Amul
Stamina (GCMMF), Powerade (Coca-Cola), Glucon D Isotonik (Heinz) and Lucozade (GSK)

(http://www.technopak.com/Files/energy-drinks.pdf)

The Indian Fruit Juices Market (Technopak)

Within the beverages market, the fruit-based beverages category is one of the fastest growing
categories and has grown at a CAGR of over 30% over the past decade. At present, the Indian
packaged juices market is valued at INR 1100 crore (~USD 200 million) and is projected to grow at a
CAGR of ~15% over the next three years. The packaged fruit juices market can be divided into three
subcategories, viz. fruit drinks, juices, and nectar drinks. Fruit drinks, which have a maximum of 30%
fruit content, are the highest-selling category, with a 60% share of the market. Frooti, Jumpin,
Maaza, etc. are the most popular products in this category. Fruit Juices, on the other hand, are 100%
composed of fruit content, and claim a 30% market share at present. In contrast, nectar drinks have
between 25-90% fruit content, but account for only about 10% of the market.

Some of the other brands of fruit juices and drinks include Frooti, Appy, Mazza, Minute Maid, Slice,
Fresh Gold, and Del Monte. Considering the attractiveness of the segment, such diversified consumer
food companies as ITC are working towards a foray into Packaged Juices

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Market size of the food and beverages industry across India from 2015 to 2020 (in
billion U.S. dollars)
This statistic depicts the market size of the food and beverages industry in India in 2015 with a
forecast until 2020. In 2020, the market size was forecasted to amount to approximately 46 billion
U.S. dollars, up from about 20 billion U.S. dollars in 2015.

Market value growth of the beverage industry in India from 2012 to 2016 with a
forecast for 2021
This statistic displays the market value growth of the beverage industry in India from 2012 to 2016,
with a forecast for 2021. In 2016, the market value of the non-alcoholic beverage industry in India
was approximately 16 percent greater than the previous year and was estimated to grow at about
17 percent between 2016 and 2021.

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Non-Alcoholic Drinks statistics
Highlights:

• Revenue in the Non-Alcoholic Drinks market amounts to US$10,370m in 2018. The market is
expected to grow annually by 12.8% (CAGR 2018-2021).
• The market's largest segment is the segment Bottled Water with a market volume of
US$7,062m in 2018.
• From an international perspective it is shown that most revenue is generated in the United
States (US$132,199m in 2018).
• In relation to total population figures, per person revenues of US$7.64 are generated in
2018.

Market Definition:

The Non-Alcoholic Drinks market includes bottled water, soft drinks and juices. Globally significant
producers are Coca-Cola Corporation, PepsiCo and Nestlé. This market does not include hot drinks,
milk mix drinks nor powdered drinks and syrups for post-mix production on-site. The market for
Non-Alcoholic Drinks is structured into off-trade sales (in stores) and on-trade sales (in bars,
restaurants etc.). Statista values off-trade sales at retail prices (including sales taxes or VAT) and on-
trade sales at wholesale prices (excluding sales taxes or VAT). Additional mark-ups for hospitality
services are therefore not taken into account.

Scope:

• IN-SCOPE
o Mineral Water
o Soft Drinks
o Fruit and vegetable juice
• OUT-OF-SCOPE
o Hot Drinks
o Powdered drink mixes and syrups (e.g. Post-Mix Drinks)
o

Statistics:

Revenue

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 Revenue Growth

Other statistics: https://www.statista.com/outlook/20000000/119/non-alcoholic-

drinks/india?currency=usd#market-volumePerCapita

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