KIT: Indian Market for Aerated Drinks

Strategic tools for the practising manager

Growing at the rate of 6-7 per cent annually, the market for aerated drinks in India is primarily dominated by Pepsi and Coke, enjoying a combined share of 95per cent of the market. The market consists of cola products and non-cola products – of which the cola segment constitutes 62 per cent.

Aerated Beverages is an important sector in the country because it not only contributes to export earnings of the country, but is a revenue driver for other industries such as glass, refrigeration, transport, paper and sugar.

This segment is universal in its demand, catering to all income groups and age-brackets. However, the frequency of consumption is quite low. Taste is the main factor which drives the demand of the product. Urban areas report a dramatically high consumption of aerated drinks as compared to rural areas.

With the increasing preference for healthier beverages and the increase in the availability of packaged juices, the demand for carbonated drinks has fallen in the last few years. Although they still hold a predominant share of the beverage market in India, many of these companies are expanding their product range into non-aerated options and energy drinks.