The Indian Beverage Association, which represents PepsiCo and Coca-Cola, is disappointed for the re-categorization of aerated drinks in the luxury category under the GST rate slabs announced by the GST Council, as per the reports published by the GST Council.
The statement says, "The viability of the industry could be in grave danger because of such an adversarial tax approach."
As the report says, a cola industry official, said, "If there is an additional cess on the category over and above the 28% GST rate, it’s going to have a severe impact, as that will lead to consumer price hikes of as much as 20% and kill the industry."
Statement issued by IBA reads, "At Rs 10 for 200 ml, aerated drinks are neither luxury goods nor do they carry the kind of health hazards attributed to them. Aerated drinks are not ‘sin’ goods as the Union Government itself had accepted earlier and there are observations by the court on the basis of the report of an expert panel that the ingredients present in aerated drinks do not pose any health hazard."
Tonic-water brand Svami has introduced a range of non-alcoholic ready to drink products.
After disrupting the mixer category, it's the next evolution and step in Svami's journey to launch a new product category.
The first three products in this line are; Non-alcoholic Rum & Cola, Non-alcoholic Gin & Tonic and Non-alcoholic Pink Gin & Tonic.
“From day one, Svami has been about great tasting drinks. We have always believed that you do not necessarily need to have alcohol in a drink to make it complex and enjoyable and that’s what we have created with our new range. These are also great options to consume anytime so you are not just limited to sugary colas and packaged juices,” said Aneesh Bhasin, Co-founder of Svami.
Created with impeccable flavors and botanicals, these products offer complexity and great taste but are entirely alcohol-free.
In true Svami fashion, complete R&D was done in house, and it took months to arrive at these products.
“There are a lot of people who do not consume alcohol, there are people who just want to take a break from alcohol and some who might want to stop after their first drink. We are offering a new alternative to all such people,” added Bhasin.
Indian dairies and aerated drink firms are increasingly entering into novel and Western-influenced milk-based beverages that offer significantly higher margins than traditional milk drinks.
Leading Indian dairies Amul and Parag Milk Foods are among the frontrunners in launching nutritional and fruit-based milk beverages, an area where global aerated drink giants PepsiCo and CocaCola also made their entry over the past few months.
Industry representatives and sector analysts estimate more players from diaries, aerated drinks and fast moving consumer goods entering the highly attractive and rapidly growing new segment of the market.
A report by the Tata Strategic Management Group said, dairy beverages as a segment is estimated to post sales of $1 billion (Rs 6,400 crore) in India by fiscal 2021, compared with Rs 1,280 crore in fiscal 2015.
According to Bharat Kedia, chief financial officer at Parag Milk Foods, the milk-based beverages segment has the second highest margin -from 25% to as much as 45% -among the value-added segments after powdered nutrition products like whey and infant food.
Pankaj Gupta, Senior Practice Head, consumer and retail practice at the Tata Strategic Management Group, said, "As dairies enjoy higher margins, they are focusing more on easy-to-consume form of beverages and are launching various products for every category of age."
Shiva Mudgil, Analyst, Rabobank, said, "The growing demand for milk-based beverages indicates a shift in consumer demand with rising purchasing power ... The market is still at a nascent stage in India, but is growing rapidly with newer players entering the fold and expanding rapidly."
Beverages are fast emerging as a big revenue generator for dairies, said Kedia of Parag Milk Foods. According to him, the share of the beverages segment to overall revenue at his company could reach double digits in the next five years from a low single digit now.
While innovations in new flavours are taking place, Gupta of the Tata Strategic Management Group believes that development of newer pack options for consumers will also result in attractive opportunities for packaging providers.
Currently, milk-based beverages are being sold in tetrapaks, metal cans, glass bottles, pet bottles and pouches.
Gupta said, "Dairies' next phase of growth would witness market expansion driven by newer consumption occasions or recruiting newer consumers through products and packaging."
PepsiCo is all set to bring the new diet Pepsi to the market by this week.
The company said in response to customer feedback that it would replace the aspartame in the drink with another artificial sweetener that has less baggage, reported AP.
The rollout will test the theory that the sweetener is to blame for fleeing customers or if other issues might be at play.
Other diet sodas that still have aspartame include Diet Coke, Diet Dr Pepper and Fanta Zero.
Traditional diet sodas sales have been falling. Industry executives blaming the freefall on unfounded concerns people have about aspartame. Two years back, Coca-Cola even tested ads in select newspapers defending the safety of the sweetener.
"It's the No. 1 think that our customers have been calling about,'' said Seth Kaufman, a senior vice president at PepsiCo.
In the short term, Diet Pepsi sales are likely to see bump from the marketing push around the new formula, which will include in-store sampling and discounting in coming weeks.
And in terms of taste, Kaufman said it's not identical but that the drink should still be familiar to fans of Diet Pepsi.
This is not the first attempt by PepsiCo Inc. to lift flagging sales of Diet Pepsi. In 2012, the company tried improving the drink by combining aspartame with acesulfame potassium, often called ace-K, another artificial sweetener that helps prevent the taste from degrading over time.
The newest version of Diet Pepsi will also have ace-K in addition to sucralose, best known by the brand name Splenda. The new cans will be patent with the words ``Now Aspartame Free'' above the Pepsi circle logo.
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