"How Beverage Market is Enlarging"

The Indian food and grocery market is the world’s sixth largest, with retail contributing 70 per cent of the sales. The Indian food retail market is expected to reach INR 61 lakh crore (US$ 915 billion) by 2020 according to a sectoral report by Indian Food Resourcing.

Beverages have proved themselves to be smart movers and are continually developing innovative marketing techniques to penetrate modern retail.

Retail Market in India is estimated to reach USD 1 trillion by 2020 from beverage market. The Cafe’ market has witnessed an aggressive expansion by established brands, both domestic and international. Over the past five years, the café culture has grown with many new cafés opening across all major Indian cities. According to a report by FICCI, the market size for cafe’s is around INR 25,000 crore and is growing at 10 per cent per year. Newer brands such as Starbucks and Costa have been aggressive with opening new branches all over.

Rational Consumer

"With people inclining towards relaxing and going out more often, they are exploring new products very frequently. As a provider, it's exciting to see evolving trends in the market, being able to fulfil demands and introducing new products”, says Jasmeet Singh Marwah, Chairman and Managing Director at Funbars Hospitality Pvt. Ltd. adding that as a provider, he is excited to bring some of the best International brands to the country. Consumers are keen on trying new brands and exploring their taste buds as well."

India, with its population of 1.2 billion, is one of the largest consumer markets in the world. It is also demographically one of the youngest with around 50% of its population below the age of 25 and around 65% below the age of 35. The majority of Indian consumption of food and beverages is driven by people between the ages of 18 and 40. The appetite of the young Indian population has been a key driver in industry growth. With India’s population skewed towards younger consumers, each of these beverage categories has significant growth potential in the coming years. Indian consumers are now more mindful about what they are consuming. At the same time, it opens the opportunity for manufacturers to come with more varieties. Also they have to keep in mind that India is a price sensitive market and prices will always have an impact on what products consumer buy and how often they buy them. As such, there may be scope for manufacturers to offer beverages at multiple price points to ensure there is accessibility for the nation’s wider audience.

Energy Drinks

Talking of growth, market potential, sales and profitability in the beverage category, the energy drinks segment has been attracting a lot of consumer traction and performed impressively in recent years. Since its emergence in the Indian market, the energy drink category has enjoyed remarkable success, displaying a good growth in sales. “India’s energy drink market was valued at USD 3663.7 million in 2017 and is expected to reach USD 4626.1 million by the end of 2022, growing at a CAGR 4.5 per cent. Increased urbanisation, rising disposable income and growing health consciousness among the Indian youth has increased the demand for non-carbonated drinks. At the same time, long and erratic working hours and the trends of social gatherings are driving Indian consumers towards the consumption of energy drinks. So there exists plenty of demand for the category,” says Abhinav Biswas, Sales and Marketing Head, Goldfogg India. It shows that today energy drinks are no longer confined to bottom shelves of modern retail and have acquired the status of mainstream beverages. 

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