Stalwarts of Indian Soft Drink Industry face the heat from Local Brands

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Indian-Soft-Drink-IndustryThe 65,ooo crore (INR) soft drink market in India has several categories that provide wide spread choices to its drinkers and hike up the competition level for the companies in the industry. Carbonated drinks segment is the primary kind that stricks our minds which is worth a whopping 25,000 crores INR and is undoubtedly the dominating segment of the core industry. It is followed by the packed fruit juices segment that accumulates to a worth of 8,000 crores INR. The energy drink section is an emerging category that is growing fast and currently has a share of around 700 crores INR. The reminder of the industry is captured by the bottled water industry along with other unorganized soft drink brands that hold notable markets on the local level.

Potential Growth: Lots to be captured:

The Indian soft drink industry is poised to have a 28-30% annual growth for the next 30 years, this is what reopwned sources from the industry are saying about the business. Consumption wise India is found to be at a lacking position even from Pakistan. This gap turns wider when compared to developed western countries, the per capita consumption of soft drinks according to a research report in India is extremely low when compared to its explosive population growth. In the US, the per capita consumption is almost crossing 90 liters, it is 16 liters in Pakistan; wherein India only has achieved a volume of 3 liters which is relatively low. However, the market is fast changing as there are aggressive promotional actions along with increased production capacities undertaken by popular brands in India.

According to the experts, Indian consumption is set to double up in a few years and by then it is going to tough for the manufacturers to serve the accelerated market demands.

Fight between Multicrore brands vs. Small home-grown names:

The Indian soft drink market for years been a fight between multinational brands ( the are dominating the market since years) and the small time names which have an non-ignorable local dominace. These are mainly known as local brands that have a market share of a maximum of 10% that itself pegs up to a smashing 14,000 crores INR. This massive coverage is because these brands concentrate of particulars areas and have segregated pockets in which they have managed to construct their strong holds.

Small Names making Big Impact:

Hajoori & Sons of Gujarat, Jayanti Beverages of Alwar, Shri Brahm Shakti Prince Beverage and City Cola of Delhi along with Boss Beverages of Bareily, Uttar Pradesh are few names that have created headache to the Coca-Colas and Pespis in the past few years. This contest actually wasn’t seen as a serious one during the initial stages. However, today these small brands together put-up a strong 30% market share in Indian soft drink industry. These manufacturers are able to capture and maintain their share of markets without spending huge investments as promotion unlike the massive brands. Accroding to the research studies this is mainly because of the rich quality and affordable price in which these products are provided. All of these brands are very popular in their respective markets and world famous players are actually finding it tough to even put up a decent fight.

Forced to pull the prices down:

As a result of stiff competition from several states the multinational brands are forced to bring a dip in their prices. There is almost a dip of Rs.2 in the 200ml segment in regions such as Uttar Pradesh, Haryana and Delhi. Pespi and Coca Cola both have tried the tick of offering free bottles (one free on two, etc) yet haven’t been completely successful. They are also hit by unusual promotional methods used by these big manufacturers, one of them provided their drinks for free at a political rally which receieved massive reactions in the form of awareness.

Business analysts believe that big brands cannot afford to drop their prices beyond a cetain limit due to multiple reasons and this is seen as the biggest advantage favoring the lesser known brands as it provided them the chance to market their product as a cheaper alteranative.

Presence of local brands is effecting global brands in India and other markets such as China and Sub-Saharan Africa

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Small names present in all parts of the market:

Big Cola of the global brand of RC Cola is another strong contender in several parts of India which is playing the market with its volume sales at half the prices of Pepsi and Coke.

Similarly, the Kalimark brand has an alike story with a rich traditional taste and color in the southern parts of the country. The company recently has revamped it packaging and uplifted its marketing activities which has worked well in catching the eyes of the current generate effectively. There is a percentage of consumers in southern India who only drink this brand as they are hooked up to its taste and do not want to try anything else irrespective of their brand values and massive range of promotion. This is one region of India where again famous soft drinks brands find it extremely stressful to maintain their stride.

Hence, reading the situation it doesn’t look any easy for the multi-crore global soft drink brands insprit of their strong clout of stars promotions as they are somewhat insufficent in stopping the troop of small names and their strapping march towards the market.