Consumers prefer non-carbonated over carbonated drinks

25 June, 2012

Growing at a compound annual growth rate (CAGR) of about 35% annually, Indian non-carbonated drink market is likely to touch 54,000 crore rupees by 2015 from the current level of 22,000 crore rupees including fruit drinks, nectars and juices etc.

AS PER a report by the industry body ASSOCHAM factors that have fueled this industry’s growth are greater disposable incomes, particularly in urban areas; consumers are seeking healthier beverages even if they are relatively more expensive, due to their positioning. The report clearly says that metropolitans are the largest consumers of non-carbonated drinks and are going to be the biggest consumers.

Also raising awareness levels with regard to obesity and other weight related health issues, especially amongst teenagers and young adults has helped push sales of non-carbonates, says an industry specific analysis of The Associated Chambers of Commerce and Industry of India (ASSOCHAM).

ASSOCHAM findings indicate that a strong shift in consumer beverage demand towards non-carbonated alternatives, creating new opportunities for drinks manufacturers in the country. The most traditional Indian beverages comprise Lassi, Chach, Sharbat, Thandai, Kanj, or milk shake, nimbu pani (lemonade), badam doodh and coconut water.

The juices market in India is dominated by Dabur’s Real fruit juices and PepsiCo’s Tropicana has a 45% market share. Real is the market leader in the packaged fruit juices category with over 50% market share and a turn division for fruit juices and plans to focus on this high-growth segment.

“As a refreshing drink, juices certainly win hands down. A segment that is growing at incredibly high rates, the juice market is seeing an explosion of sorts with the entry of new brands, variants and innovations,” said D S Rawat, Secretary General, ASSOCHAM in a release.

The report says that the non-carbonated market is growing at a double-digit growth rate. On the other side, Indian carbonated drinks market has declined by 15-20% in the last three years as consumers are becoming more health conscious.

In a recent survey by ASSOCHAM on “Rising demand of non-carbonated drinks among young Indians”, based on responses from 2,500 representatives in metros like Delhi, Mumbai, Kolkata, Chennai, Bangalore, Ahmadabad, Hyderabad etc. over 79% of respondents preferred non-carbonated drinks.

The key reasons for the shift and rise in demand for non carbonated beverages is due to health issues, increased standard of living and afford ability, need for a better lifestyle, organized food retail and urbanization etc.

The industry body's survey claims that the Juice category is the fastest growing segment at present, estimated to be growing at 30-35% per annum. The fruit drinks category has also been witnessing growth of around 10-15% per annum.