Current Status and Future trends

of Beverage Industry

Group : 10
 Beverage Packaging Trends

• Consumers are drinking on the go and are

looking for quick and convenient beverages in
single portion packages that can be consumed
quickly and stored discreetly.
• Consumers are also increasingly aware of
sustainability initiatives, environmentally
friendly packaging and carbon footprints.
 Other trends that will drive packaging innovations in the
long term are the following initiatives to improve package
strength, ease of use and material efficiency, respectively:

• Packaging designs with improved break resistance.

• Packaging designs that substantially reduce spilling.
• Packaging materials and designs that decreases the weight
of bottles.
• In order to effectively make these initiatives a reality,
beverage manufacturers are seeking innovations from
suppliers and packaging vendors.
• A plant manager at a bottled water manufacturer stated
that beverage packaging companies should share the
burden of driving new solutions to market. These
companies should also work aggressively to effectively
produce packaging designs that beverage manufacturers
request.
 Secondary Packaging Trends

• Within secondary packaging, respondents saw

a trend of reducing the amount of secondary
packaging with more effective solutions that
protect beverages and reduce the cost, size
and weight of the packaging.
• Trends in Specific
Beverage Categories
 Trends in Beer, Wine, and Spirits

• Many companies in the alcoholic drink

category are transitioning their brands to
more of a premium positioning through new
closures and container materials.
• Many beer companies are using aluminum
cans as a way to provide more insulation
benefits to consumers while also enhancing
the brand image with a new, innovative and
sophisticated look.
 Trends in Carbonated Soft Drinks

• While many companies talk about shifting toward

green packaging, respondents in carbonated soft
drinks stated that they expect their industry to be
the fastest to move toward green packaging.
• Multiple respondents stated that they expect
carbonated soft drinks to move away from glass
and aluminum to bio degradable/green plastic
packaging as soon as it becomes widely available.
Trends in Non-Carbonated Soft Drinks

• To keep costs low, respondents in the non-

carbonated soft drinks category see a “less is
more” philosophy becoming a packaging
trend.
 Current Status Of Beverage Industry
Focus on Bottled water industry
• Indians currently spending approximately
$330m a year on bottled water.
• The packaged water market constitutes 15 per
cent of the overall packaged beverage
industry, which has annual sales of at least
$2.6bn.
• The per capita consumption of mineral water
in India is a mere 0.5-liter compared to 111
liter in Europe and 45-liter in USA.
 Bottled Water Industry in India
• The Indian market is estimated at about Rs 1,000
Crore and is growing at whopping rate of 40 per
cent. By 2010, it will reach Rs 4,000 -5,000 Crore
with 33 per cent market for natural mineral
water.
• According to a national-level study, there are
more than 200 bottled water brands in India and
among them nearly 80 per cent are local brands.
• India ranks in the top 10 largest bottled water
consumers in the world,
• its per capita per annum consumption of
bottled water is estimated to be five litres
which is comparatively lower than the global
average of 24 litres.
Bottled water top players in India
The top players in bottled water industry in India
are the major international giants :
• Coca cola,
• Pepsi,
• Nestle
National Players
• Mount Everest,
• Manikchand,
• Kingfisher,
• Mohan Meakins,
• SKN Breweries ,
• Indian Railways
• Parle Bisleri continues to hold 40 per cent of
the market share.
• Kinley and Aquafina are fast catching up, with
Kinley holding 20-25 per cent of the market
and Aquafina approximately 10 per cent.
• The rest, including the smaller players, have
20-25 per cent of the market share.
 Bottled water companies earn high
profits
• People are prepared to pay
Rs. 12 for a liter of water-in
India especially when the cost
of material input 0.25 paisa per
liter excluding labors cost.
• PepsiCo sales growing twice as fast as Coca-Cola
August 10, 2011: In the Rs 11,000-crore soft drinks
market, where volume growth is significantly lower
than two years back in any case, PepsiCo reported 17%
volume growth during April-June while Coca-Cola grew
8%. This is the biggest gap in growth between the two
cola rivals in the past 3-4 years when they were
growing neck-to-neck.
• Bisleri looking to enter Middle East countries
NEW DELHI, June 30, 2011: Bottled water major
Bisleri International said it is looking at entering Middle
East countries as part of its strategy to expand its
overseas presence.As part of the plan, the company
said it will consider setting up more manufacturing
facilities outside India.
• Railways hikes capacity of Rail Neer plant at
Khagau
June 8, 2011: The Rail Neer (mineral water)
plant at Khagaul has proved to be a good revenue
earner for the railways. The railways has
increased its production capacity to one lakh
bottles daily to cope with the growing
demand in other zones.
• Railways to set up own bottling plant
The Indian Railway Catering and Tourism
Corporation (IRCTC) are planning to set up their
own bottled water plant in Ambarnath a news on
February 20, 2011.
• Soft-drink major hikes prices on rise in VAT
Mumbai, May 23, 2011: Soft-drink major Coca-Cola has hiked
prices by up to five per cent in at least two major markets such as
Maharashtra and Delhi. This is the second price increase being done
by the company in the last
two months. In April, the firm that sells Thums Up, Sprite, Fanta and
Maaza, had hiked prices of its aerated beverages by up to nine per
cent due to surging packaging and transportation costs.
After the price hike, a 1.25-litre bottle of Thums Up is now
available for Rs 39, up from Rs 37. Prices of 200 ml bottles of Sprite,
Maaza and Limca are up by Rs 1 from Rs 9. The company has also
increased prices of its two-litre bottles of Sprite and Thums Up to
Rs 63 from Rs 60.
The Indian subsidiary of the US cola giant blames increase in the
value added tax (VAT) levied by state governments of Maharashtra
and Delhi for the price hikes. The state value-added tax (VAT) has
increased to 20 per
cent from 12.5 per cent earlier, said senior Coca-Cola India officials.
• Formation of Indian Beverage Association
(IBA)
In July 2010 rivals Coca-Cola and PepsiCo
have come together along with other
beverages makers and bottlers to form the
Indian Beverage Association (IBA), which will
be the industry’s single point of interaction
with the government and help companies
comply with food safety guidelines and other
regulations.
 Other Information
• The Rail Neer opened water manufacturing
unit in Palur.
• This is the third in the country and first in
south India.
• It has capacity to manufacture water bottles
that can hold up to 180000Ltr per day.
• PepsiCo signs up Sharman Joshi as 7UP brand
ambassador
• On March 25, 2011 India has sent 10,000 litres
of bottled water to Japan, reeling under the
devastation caused by disaster of Earthquake,
tsunami and worst nuclear accidents of Japan.
• The World Health Organisation (WHO) has
issued revised drinking water guidelines on
July 26, 2011, urging governments to
strengthen water quality management and
asking water suppliers to improve their faulty
service to consumers, in order to prevent
often fatal water-borne diseases.
Key Figures on Indian Beverage Industry

• Indian Beverage Market CAGR[2007-

2010]:21%
• India ranked 3rd in largest beverage
consumption after the USA and China
• Total Indian Beverage Consumption every
year:120 billion liters
• Fruit Beverages Market size: Rs 1100 crores
(approx. Euro 180 million)
• Fruit Beverage market growth rate: 30%
• Majority of Indian consumers:75% consume Non-
alcoholic beverages and 25%
• Alcoholic Beverages
• Carbonated Drinks Market size: $1.5 Billion
• Juice or juice-based Drinks Market size: $.25
billion
• Health beverage industry is valued at $230
million
• Indian Beer Market Growth Rate: 7 - 8 %
• Indian Beverage Industry is 10% of Global beverage
consumption today.
• Milk-based beverages consumption has increased
by an annual average of 2.7 per cent in the last four
years
• Total packaged coffee market size: 19,600 tonnes or
$87 million.
• The Indian soft drink market is worth Rs. 21,600
million a year with a growth of around 7%.
• The total soft drink (carbonated beverages
and juices) market is estimated at
• 284 million crates a year or $1 billion.
• Peak season soft drink consumption : 25
million
• Off-season soft drink consumption: 15 million
• The market is predominantly urban with 25 per
cent contribution from rural areas.
• Coca cola and Pepsi dominate the Indian soft
drinks market.
• Indian Mineral water market size : 50 million
industry.
 There are certain factors which are driving
developments into the Indian
Beverage sector:
• Economic growth
• Population growth
• Competition for Raw materials
• Power of retailers
• Globalization / Regionalization
• Research & Development
• Technological Developments
• Food safety and regulation
• Consumer Demands and trends
 OPPORTUNITIES
• Presence of a favorable market
• Market globalization
• Foreign direct investment promoting
knowledge and developing export channels
• Transfer of production to the countries with
smaller labor costs
• Well established distribution network
 THREATS
• Unfavorable market trends in energy resources
• Increasing competition among exporters and
decreasing dependency on one market
• Intense competition between the organized and
unorganized segments and low operational cost.
• Water scarcity in India
• Implementation of Goods and Service tax by
2011
 Bibliography
• http://www.chem.info/Articles/2010/03/Plant
-Operations-Beverage-Industry-Trends/
• http://gits4u.com/water/water16.htm