RESEARCH: Indian summer drives soft drinks forward
Although still drinks remain the largest single sector - a position held for some considerable time - and packaged still drinks grew strongly, the sector as a whole was held back by almost flat consumption of unpackaged or loose alternatives. Helped by strong sales through roadside vendors, loose or unpackaged still drinks account for over 90% of total still drinks consumption.
Carbonates, though, paint an altogether different picture. Thanks to an excellent 20% increase in consumption, the sector strengthened its position as the second largest and greatly eroded the differential with still drinks. This performance is even more impressive given the fact that Indians do not tend to consume carbonates with meals and home consumption is low.
The major carbonate producers reverted back to offering 20cl refillable glass - a move that enabled affordable pricing to be implemented and one that resulted in sales of the pack size more than doubling. This has also helped the major brands compete more effectively with their traditionally less expensive local rivals. PET is the fastest growing type of packaging, its use increasing by some 36% in 2002 alone. PET's share of total soft drinks packaging also increased from 20% to 24% with further inroads expected in 2003.
Enjoying a share of almost 60%, cola dominates the carbonates market. Furthermore, cola continues to flourish, increasing total consumption by over 20% and its share of the sector. Water is the third most popular sector in India with both the Packaged and Bulk/HOD sub-sectors increasing sharply.
Canadean said it believes that India's soft drinks market will continue to grow apace in 2003, overcoming the obstacles presented by the difficulty in marketing to such a large and diverse population and the relatively high cost of packaging as a proportion of selling price. Much of this continued growth is likely to come from Bulk/HOD water with demand for carbonates and packaged water remaining strong but increasing a little more slowly.
The report said: "Imported brands in general are becoming more readily available on store shelves offering consumers greater choice. There is also considerable scope for the introduction of new flavours in response to ethnic preferences. The tremendous success of smaller pack sizes in the carbonates sector is likely to provide fresh impetus for low cost packaging particularly as the major producers look for ways of competing with lower priced local suppliers."
Weather permitting, the overall market is expected to continue growing in 2003, but with a predicted increase of around 8%, this will be far less frenetic than in 2002.
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