When it comes to quenching thirst anywhere or welcoming any guest, the first convenient option comes in mind is that of soft drinks. Because for decades in India, carbonated drinks or say fizzy drinks (largest category of soft drinks) were a hot favorite among young adults and ruling the entire beverage market of India. However, with the advent of health consciousness and increasing prosperity among Indians led to possibly avoid the sweetened beverages having high calories. The Indians are now in search for some healthy drinks, which can bridge the gap between thirst quenching and nutrition. The result is a change in the drinks consumption pattern, witnessing a rise in consumption of Non carbonated drinks viz. Fruit juices, bottled water and milk based dairy drinks.
No one can survive without basic food material like milk, vegetables and drinking water. Food processing companies will not be affected much and rather will earn profits by increasing the prices. These are the basic needs which we as a common man cannot produce by our self.
Interestingly, in the past decade the Indian Food Processing and HORECA industry have achieved many notable milestones. Until the end of the 20th century, in India, Fruit Juices considered as a luxury drink or for sick people and not a primary nutrient need. From the beginning of the 21st century, the Indians turn to be more health conscious, have understood and realized the importance of nutrient contents of Fruits and Fruit Juice. Traditionally juices freshly squeezed at either home or processed in front of consumer by street-side vendors. Indians were reluctant to try packaged fruit juices just before a few years back, because of the taste and quality issues. However, with the advent of Tetra pack and increased urbanization, there has been a gradual positive shift towards the preference of packaged juices. The convenience of storage and hygiene factors worked very well for packaged juice over freshly squeezed juices by street vendors. Indian market for fruit juice can be segmented based on three broad varieties of fruit based beverages, viz. - fruit drinks, nectar and 100% juice based on the percent of the fruit pulp it’s contained.
The “fruit juice” in India remain limited to the word “Fruit” associated with any cold beverage hence many fruit based beverages proclaim to be fruit juices. However, technically the juice with fruit pulp content more than 85% and ideally 100% without added sugar or preservatives classified as 100% fruit juices. The remaining fall under either fruit nectar or ready to drink fruit based beverages depending upon the pulp content. According to IKON Marketing Consultants, in real terms the market can be classified between the freshly squeezed juices which are 100% pure fruit juice without added sugar and preservatives and packaged juices claiming to be 100% fruit juice without added sugar and preservatives, manufactured and marketed by leading FMCG and Food & Beverage companies.
With pan India presence, the players like Dabur and PepsiCo with their Real and Tropicana brands respectively, are the market leaders in packaged 100% juice market among more than 20 other players in the branded packaged juice. As per IKON’s estimates, the consumption of fruit based beverages in India is nearly 2500 Million liters, which is growing at a healthy double digit CAGR of 16%.
Along with the increased globalization the Indian consumer become more of an experimenter and willing to try out new options breaking the traditional clutters. In case of fruit juice, it is not the regular fruits like orange, apple, mango, pineapple or grape, which seen as preferred choices, but consumers are willing to experiment with variety and off seasonal and imported fruit juices even. Thanks to the organized players who have successfully managed to serve consumers with a variety of off-season and imported fruit juices round the year, though mango based drinks remain the hot favourite. The classic example of “Maaza” which become the synonymous with “Mango” among Indian consumers. Currently Maaza from Coca-Cola leads the fruit based drinks category and directly competes with “Slice” brand from Pepsi and “Frooti” from Parle Agro. Maaza remain highly popular among Indians due to its distinct pulpy taste as compared to Frooti and tastes slightly sweeter than Slice.
Apart from the fruit juice category, bottled water has emerged as one of the fastest growing category in case of non carbonated drinks during the current decade. In India, it has taken place besides the energy drinks, sports drinks and Colas, thanks to the organized retail format in India. The organized players’ book self-space at major selling points like shopping malls, grocery stores, corner shops and even at medical stores boosting the consumption of bottled water. According to IKON’s estimates, the market of bottled water is growing at a healthy double digit CAGR of 19% and is likely to touch Rs 20,000 Cr by the end of current fiscal 2016-17. The factors such as an increase in per capita consumption in tier II and tier III cities along with growing market segments for bulk water are driving the market in a positive direction.
The late entrant, although growing in leaps and bounce is the dairy drinks category in India. The huge untapped market now getting attention by national players. With the recent launch of “Vio” flavoured milk by Coca-Coal in India is a move towards cashing in million dollar opportunity. The Indian consumers’ need of healthy, hygienic and convenient drink is being rightly addressed by the branded dairy drinks players. The present status of dairy drinks remains on-the-go consumption with in-home consumption limited to traditional milk based drinks like buttermilk and Lassi. Still the bigger share occupied by Carbonated Soft Drinks and fruit juices and fruit based beverages in case of in-home beverage consumption. However, there has been a noticeable consumer shift from Carbonated Soft Drinks due to health concerns which is altering the in-home beverage consumption pie and gradually shifting towards non fizzy healthy drinks.
Today’s Indian consumer has rather become a value seeker and ready to pay premium for value added products, resulting in dramatic changes in the consumption pattern of food and beverages. This behavioral shift witnessed among not only urban consumers but also their counterparts residing in semi urban and prosperous rural areas who started acting in the same manner, giving a boost to consumption of non carbonated drinks.