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Preference for health-conscious and convenient options like RTD teas
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Monday, 03 November, 2025, 15 : 00 PM [IST]
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Dr Priyanka Kale & Dr Ganesh Gaikwad
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The beverage industry is the sector that manufactures, processes and distributes a wide range of drinks, including both non-alcoholic and alcoholic beverages such as soft drinks, water, juice, coffee, tea, beer, wine, and spirits. This includes all steps from initial formulation and ingredient sourcing to final packaging, filling, and distribution to consumers. The beverage industry is a global market focused on producing and selling alcoholic and non-alcoholic drinks, which includes a vast range of products like soft drinks, juices, coffee, tea, and alcoholic beverages. It is a highly dynamic sector influenced by technological advancements, changing consumer tastes, and supply chain complexities, facing challenges such as inflation, labour shortages, and competition. Key trends include a growing demand for functional and health-conscious drinks, driven by innovation and rising global consumption.
The Indian beverage industry is experiencing robust growth, driven by a rising middle class, urbanisation, and a demand for both traditional and innovative products like health drinks and packaged juices. Both alcoholic and non-alcoholic sectors are expanding, with strong growth in bottled water, carbonated drinks, and flavoured beverages. Key trends include a shift towards convenience (single-serve packaging, e-commerce) and increasing consumer awareness of health and sustainability.
The Indian beverage industry is experiencing significant growth, driven by a youthful population, rising disposable incomes, and a greater focus on health and wellness. The market is projected to grow at a CAGR of 6.8% to 7% over the next five years and is expected to expand to over $24 billion by 2027. Key trends include increased demand for bottled water and juices, a shift towards healthier options like functional and plant-based beverages, and a growing demand for convenience and single-serve packaging.
The Indian non-alcoholic beverage market was valued at approximately Rs 1.37 trillion in 2023 and is projected to reach Rs 2.10 trillion by 2029, growing at a CAGR of about 7.06%. The alcoholic beverage market is estimated to have been around $60.48 billion in FY2023 and is expected to reach $103.37 billion by FY2031 with a projected CAGR of 6.93%. Key growth drivers include rising disposable incomes, urbanisation, and a growing consumer preference for health-conscious and convenient options like ready-to-drink teas, juices, and bottled water.
Industry segments
Non-alcoholic
This segment includes soft drinks, bottled and packaged water, fruit juices, coffee, and tea.
Alcoholic
This category covers distilled spirits, wine, and brewing (beer and cider).
Market and growth
• The non-alcoholic beverage market is a significant part of the industry and is forecast to grow at a CAGR of around 7.06% from 2024-2029.
• It is projected to grow from an estimated $17 billion in 2025 to over $24 billion by 2027.
• The alcoholic beverage sector is also growing rapidly, with a forecast of reaching $54,82,85,130 crore by 2027.
• The global market is experiencing significant growth, with projected figures reaching over $80 billion by 2032. India's beverage market is also poised for substantial expansion.
Non-alcoholic beverages
• Market size (2023): ~Rs 1.37 trillion
• Projected market size (2029): ~Rs 2.10 trillion
• CAGR (2024-2029): ~7.06%
• Key growth drivers: Increasing health-consciousness, preference for functional and natural ingredients, and the expansion of modern retail and e-commerce.
• Dominant segments: Bottled water, ready-to-drink (RTD) teas, fruit juices, and energy drinks are experiencing robust demand.
Alcoholic beverages
• Market size (FY2023): $60.48 billion
• Projected market size (FY2031): $103.37 billion
• CAGR (FY2024-2031): 6.93 %
Other estimates
A separate analysis suggests the alcobev market is around $47 to $48 billion with an annual growth of 8% to 10%.
Major players
Dominant global players like Coca-Cola and PepsiCo are major forces, alongside large domestic companies such as ITC Limited, Nestlé India, and Amul.
Overall market trends
The non-alcoholic segment has seen exponential growth due to increasing health- consciousness and demand for convenience. Consumers, especially younger demographics in urban areas, are driving a shift toward health-aligned and functional beverages. The market is expanding beyond traditional beverages, with increasing popularity in segments like fruit drinks, which are also benefiting from new product formulations (e.g., low-sugar options).
Key trends
• Health and wellness: There is a strong shift towards healthier options such as functional beverages, plant-based drinks, and organic products, with the health-focused segment growing at a CAGR of 11.7%.
• Urbanisation and convenience: Busy lifestyles in urban areas are driving demand for convenience and ready-to-drink products, especially single-serve options.
• Product innovation: Companies are innovating with products like low-sugar, organic, and plant-based drinks to meet evolving consumer preferences.
• E-commerce: The growth of e-commerce makes it easier for consumers to access a wider variety of products, further boosting the market.
• Sustainability: The industry is increasingly focusing on sustainability, particularly regarding PET packaging.
• Technological advancements: Technology is crucial for both production efficiency and navigating the market. The industry relies on advanced machinery and is exploring automation to streamline processes and reduce costs.
• Consumer demand: There is a significant and growing demand for both non-carbonated and carbonated soft drinks, with a strong influence from millennials.
• Supply chain and operational efficiency: Companies are focused on optimising their supply chains and using strategies like direct store delivery (DSD) to stay competitive and navigate challenges like rising costs and labour shortages.
Challenges
• Competition: The market is highly competitive, with major players facing threats from new entrants and increased competition.
• Raw material costs: Fluctuating prices of raw materials can impact profitability for manufacturers.
• Water scarcity: Potential water scarcity issues could pose a challenge for the industry, especially for bottled water.
(Kale is assistant professor, MIT College of Food Technology, Chhatrapati Sambhajinagar, and Gaikwad is assistant professor, School of Food Technology, MIT Art, Design and Technology University, Pune, Maharashtra. They can be reached at priyankakale665@gmail.com)
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