Abstract
Why buy this report
- Get insight into trends in market performance
- Pinpoint growth sectors and identify factors driving change
- Identify market and brand leaders and understand the competitive
environment
Product coverage
Asian speciality drinks; Bottled water; Carbonates; Concentrates;
Fruit/vegetable juice; Functional drinks; RTD coffee; RTD tea
Executive summary
Soft drinks buoyant due to sales of fruit/vegetable juice and bottled water
Soft drinks experienced another good year in 2006. The positive growth in soft
drinks in India was primarily driven by the increased demand for
fruit/vegetable juice and bottled water. With rising disposable incomes and a
preference for healthy and natural products, fruit/vegetable juice was in
great demand in 2006. Bottled water also continued its fast growth, with
demand stemming from the rising populations in cities and the crumbling public
infrastructure for tap water.
Carbonates' growth limited by the pesticides controversy
The concerns about the safety of carbonates were renewed in the wake of the
pesticides controversy in August 2006. Similar concerns were voiced in 2003.
The alleged harmful effects of pesticide residues in carbonates affected the
image and consumption of carbonates negatively. Within carbonates, consumers
increasingly preferred non-cola carbonates to cola carbonates. The pesticides
controversy resulted in an increasing number of consumers shifting towards
perceived healthier beverages.
Consumers slow in taking to emerging soft drinks
Indian consumers were slow to accept new soft drink options such as functional
drinks and RTD tea, although these beverages produced dynamic growth rates
from a low base in 2005 and 2006. On the other hand, carbonates, bottled water
and fruit/vegetable juice have long been popular beverages in India. The
relatively low consumer awareness of functional drinks and RTD tea stems
mainly from the lack of promotional activity. Manufacturers have marketed and
positioned these products in large metropolitan cities. Thus, the combination
of high prices, restricted product availability and a lack of promotional
activity led to the slow uptake of emerging soft drinks.
Coca-Cola India Pvt Ltd maintains its leading position
Coca-Cola India Pvt Ltd maintained its leading position in soft drinks in
India, followed by PepsiCo India Holdings Pvt Ltd in 2006. Whilst the retail
volume shares of Coca-Cola India and PepsiCo India slipped in 2006, as a
result of the growing health concerns caused by the aftermath of the
pesticides controversy, both maintained a comfortable lead over the other
manufacturers. Parle Bisleri Ltd has steadily gained shares from the
carbonates giants over the review period, to emerge as the third ranked
company in 2006. The battleground for beverages has moved from carbonates to
bottled water and fruit/vegetable juice, with manufacturers turning their
attention towards these healthier beverages, as consumer interest continues to
surge forward. A number of new players have entered fruit/vegetable juice and
bottled water, vying for a slice of the growing pie.
Future soft drinks growth to come from healthier beverages
Soft drinks is expected to grow at a healthy pace over the forecast period.
Much of the demand for soft drinks is expected to be for healthier beverages.
With consumer preferences shifting towards healthier options worldwide, India
is following suit. A growing consumer awareness about healthier soft drinks
and the effects of the pesticides controversy mean that consumers are likely
to opt for healthier alternatives over the forecast period. Thus, sales of
carbonates are expected to stagnate over the forecast period while
fruit/vegetable juice and bottled water are projected to experience robust
growth. Functional drinks and RTD tea are expected to reproduce the dynamic
growth of 2005-2006, albeit from a low base.
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