Beverage industry: non carbonic

Market for Beverages in IndiaIndian Food Industry to be 54000 Crore by

2015 About 25% in organised and 75% in

unorganised Non-alcoholic beverages market around $5

billion Health beverages market is $300 million and

is the fastest growing

Non alcoholic beverage sector growing (product variety and markts)

India is a small player in terms of of manufacturing,foreign investment inflows, research & development (R&D) base and exports, but also in terms of percapita consumption of non-alcoholic beverages.

(R&D) base and exports, but also in terms of percapita consumption of non-alcoholic beverages. India,

With its large consumer base and availability of raw material and cheap labour, thus has huge untapped potential to develop the non-alcoholic beverage sector.

Non alcoholic beverage industry

Carbonated drinks

Energy and rejuvenationEG: Red bull

Health and wellnessThis segment is about the health conscious people. So they have introduced less sugar and less caloric beverages to target this segment.

Weight managementVarious calorie burning beverages, metabolism boosting effect, fat burning beverages are launched by companies that go well with people convenience to reduce the weight.

HydrationAntioxidants, vitamins and fruit extracts are the ingredients with hydration proprtiesB vitamin: For energy metabolismE vitamin: Has antioxidant propertyC vitamin: To activate peopleGatorade is well known hydration drink for athletes.

Indian beverage industry(in terms of numbers)

Non corporate manufacturers

(75 %)

•But corporate manufacturers dominate in terms of value, volume of sales, investment, employment generation and percolationand use of technology. •The non-alcoholic beverage sector accounts for over one per cent of India’s GDP and its share in the GDP is rising

GROWTH DRIVERS1. Consumers are interested in natural ingredients and beverages

which are free from artificial ingredients. As a result this market has huge attraction for people who are concerned about health. Basicaly factors such as increase in disposable income and living style is a major driver.

2. Energy drinks are good source of energy without providing excessive calories and sugar. A majority of Indians are now becoming aware about malnutrition and under nutrition. They are looking for convenient source of energy and functional drinks are fulfilling their need.

3. Urbanisation and increased visibility of such products is also an important growth driver.

CONSUMER PROFILE

•Typical consumer of such beverages could be a person, having good amount of disposable income, belong to upper middle and middle class. •These consumers are willing to try something new. Companies are trying to surprise them by coming up with new products. Surprise can be in form of color, taste and aroma of product. By surprising customers the purpose of companies is that consumer wont get a chance to compare product with cola or juices. •Large consumption of fruit contained beverages is due to perceived health benefits of product.

CHALLENGES BEING FACED1. Energy drink segment still remain a new category with only few established players such as Red Bull, Cloud-9, Power Horse and Sobe.2. High price of these drinks are concern for the company.3. Food and drug administration (FDA) regulation due to high amount of caffeine in some of the drinks.4. Health concerns are associated with drinks. As some of these drinks contain large amount of sugar and caffeine which thus increases caloric intake and further increase the case of heart attack, blood pressure and other heart risks. As heart rate automatically increases after exercise, so consumption of energy drinks may further increase it. High sugar content increase the chance of dental carries. Concern is there about consumption of these drinks in large amount. Some of these drinks are even found to contain carcinogenic substances. Various health experts claim adverse reaction using these energy drinks.5. There is consumer distrust on the claims made by the beverages.6. Competition from carbonic beverages which are much lower priced .

THREAT ON NEW

ENTRANTS(MEDIUM)

BARGAINING POWER OF CUSTOMERS

(HIGH)PRICE SENSITIVITY

AND VARIOUS OPTIONS

THREAT OF SUBSTITUTE

S(HIGH)

BARGAINING POWER OF SUPPLIERS

(LOW)VARIOUS

SUPPLIERS

INDUSTRY RIVALRY

(HIGH)

NON CARBONATED VS CARBONATEDHealth concernsIncreasing disposable incomeUrbanisationChange in lifestyleAffordability and visibility