Indias young city-dwellers will help boost the drinks sector

India's young city-dwellers will help boost the drinks sector

Obesity concerns among India's urban youth will see the non-carbonated soft drinks market grow by 35% annually despite its higher unit price, the Indian chambers of commerce has said.

Greater disposable income will also help push the sector's value to INR540bn (US$9.5bn) by 2015 from INR220bn today, according to a report from the Associated Chambers of Commerce and Industry of India (ASSOCHAM).

Carbonated drinks, meanwhile, will continue a decline that has seen their market shrink by ten to 15% in the past three years, the report, published on Monday (25 June) said.

“There has been a strong shift in the consumer beverage demand towards non-carbonated alternatives, creating new opportunities for drinks manufacturers in the country,” it said.

“The key reasons for the shift and rise in demand for non-carbonated beverages is due to health issues, increased standards of living and affordability, need for a better lifestyle, organised food retail and urbanisation.”

On Tuesday, The Coca-Cola Co announced an extra US$3bn investment in India, bringing its total planned investment in the country to $5bn. An analyst said yesterday Coca-Cola was “betting big”, with growth likely to come from non-carbonated beverages such as fortified and “healthy lifestyle” drinks.

ASSOCHAM said juices would likely benefit the most from non-carbonated growth.

“As a refreshing drink, juices certainly win hands down,” said ASSOCHAM secretary general DS Rawat. “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."

The report cited a recent ASSOCHAM survey of 2,500 young urban Indians that found 79% preferred non-carbonated drinks.

PepsicCo's Tropicana leads India's juice market, the report said. Tropicana was released in the country in 2004.