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Beverages in India - Something creative beyond colas
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Tuesday, 31 December, 2019, 15 : 00 PM [IST]
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Ankur Gattani
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The beverage industry in India has seen modest action over the last few years. While the soft drink segment has massive headroom for growth when being compared to the per capita consumption levels across markets, it's also said often that India's a food country than a drink country culturally.
Cola majors have struggled owing to a few key factors. News floating on obesity woes in the West has reached the remote corners in India painting colas as the villains and while one might contest the contribution of colas to the country's waistline, given the low per capita consumption overall, there seems to be no coming back for them.
Another challenge facing the cola majors is the plethora of small regional brands nibbling at the fringes, offering similar products with better channel margins eating away market share in their own pockets, specially during peak consumption season when anything sells and the consumer is not as brand conscious.
Paper Boat showed promise with their nostalgia pitch and was everywhere rather quickly perhaps that's what hurt them - their price point was not as mass-market as their distribution reach. Now they are doing everything from apple to santra and that seems to have helped their topline growth. Would be interesting to see how their Rs 10 play with Swing pans out, given the competitive nature of that price point and the plethora of local brands in the 10 rupee segment.
Increase in competition
Juice drinks and nectars have been under stress due to increase in competition within the category.
Real's attempt with mocktails didn't take off and was withdrawn in favour of a couple of masala drinks, which are still to prove themselves worthy of advertising exposure.
ITC sought to differentiate itself with an NFC based pitch to consumers, but the majority of the beverages contain 15-25% fruit pulp and their "100% Indian fruits" is borderline misleading - the fruits are 100% Indian, but the drink is not 100% juice. Yet to really dent the space.
Coolberg, a startup in the non-alcoholic beer space is expanding distribution reach and has been creating the category aggressively. It will have an interesting time as Heineken and Budweiser are wanting to take the 0% alcohol market in India seriously along with coke's Barbican.
Kingfisher sought to aggressively build out a non-alcoholic play with Radler, which has been advertised heavily and distributed widely, but has so far got a muted response from the consumers. while the packaging and price point are attractive and Kingfisher has all the cool-brand attributes, the product taste missed the mark with respect to consumer appeal.
Parle Agro experimented with Frooti Fizz, painting the town yellow with Alia as the brand ambassador, but was as quick to disappear after just one season. Of all the products it could launch - it decided to do a jeera masala in cans to place in premium retail at airports and the vodka + Appy Fizz campaign to mimic the hit vodka + Red Bull, while ingenious, would struggle to drive up the Appy Fizz can, with its price bumped up to Rs 75 from the earlier 25.
Energy drinks with lower margins
Coke is now distributing Monster and it remains to be seen if the Red Bull loyalists are willing to pay the same price for a different drink - while tens of other lesser known brands have attempted and failed in the energy drink segment. Factories from Poland are willing to offer cans in India for as low as Rs 15, but it' a tricky affair to market energy drinks with lower margins, as Hell would know. The Hungarian brand, while being close to the Red Bull taste profile has had its challenges in ensuring shelf availability owing to the lower absolute margin its 45 rupee can offers compared to Red Bull's 99 rupee can. No doubt, packaged fruit juice is a better choice in any circumstances than aerated drinks. The higher income growth of consumers has motivated them to expose themselves to all variants of fruit juices and then decide their preferences for future consumption. Everyone is willing to experiment and explore the market and then satiate the taste buds.
Nourishing Drinks
Apart from this, the kids are fed with nourishing drinks like Boost, Horlicks, Complan, Bournvita, Powervita, Pediasure and Protinex. The market for such health drinks also has great and enormous share in non-alcoholic beverages. Mother gets a feeling of satisfaction when they feed their child with such health drinks added in milk. Generally, tea and coffee are drinks which are not served to kids even in their teenage, but later in their adulthood. In teenage period, milk is the most consumed beverage all across India.
So, without exaggeration, India is a land of varied non-alcoholic beverages which comprise of tea, coffee, fruit juices and nourishing drinks like milk added with malted products, apart from lemonade, coconut milk and so on. All drinks have created niche in the market and have generated tremendous demands and acceptability among Indian consumers and that too with utter sense of delight and inclination. The coming years would witness the flourishing of its business as well.
(The author is senior faculty (culinary arts) at Institute of Hotel Management, Kurukshetra. He can be contacted at singhocean@yahoo.com)
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