‘Non-alcoholic beverage market to hit ₹1.47 trillion’

India’s non-alcoholic beverages market may expand at a compound annual growth rate of 8.7% to reach 1.47 trillion by 2030, according to a new report.

In 2019, the size of the overall beverages market that includes carbonated soft drinks, juices, bottled water, and fruit-based beverages was 67,100 crore, the report from economic policy think tank ICRIER said.

While carbonated soft drinks (CSDs), ready-to-drink teas (RTDs), energy drinks, and sports drinks accounted for more than 60% of the global market, in India, carbonated beverages are the most popular, followed by bottled water, fruit beverages, and juices.

However, the report pointed to a shift in consumption patterns, indicating that CSDs are growing at a lower rate, while consumption across segments such as packaged water, sports drinks, and tea and coffee-based drinks is increasing.

“While the market share of CSDs is the highest, the highest socio-economic class A is moving away from the consumption of CSDs,” the report said.

Between 2010 and 2019, India’s non-alcoholic beverages market grew at 14.5% in terms of total sales volume, and 13.72% in terms of total sales value. The market size was valued at $12.15 billion in 2019 compared to $3.5 billion in 2010.

“Existing companies are diversifying their product portfolio and many startups and small and medium-sized enterprises have entered this sector in the last 10 years. The survey found that 35% of the companies have introduced new products in the Indian market, which include zero-sugar or sugar-free products and other products like tea and coffee-based drinks, and organic drinks,” the report said.

However, despite the size and scale of the market, India’s per capita annual sales at 21.36 litres in 2018 is much lower than per capita sales in other developing countries like the Philippines that stood at 111.89 litres and Vietnam at about 69.75 litres in the same year. Meanwhile, India’s revenue per person from sale of such beverages was estimated at $8.89 in 2019, much lower compared to markets such as $1,030 in the US and $67.05 in China.

The sector is also heavily taxed to deter consumers from excessive consumption of sugary beverages. Most non-alcoholic beverages are taxed at a standard rate of 12-18% or at the highest rate of 28%.

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