Theres no making lemonades out of this !!

The Indian snack and cold drinks industry is something that has always fascinated me. Probably an industry that has a tremendous and forever potential for growth in a tropical country full of foodies.

Being a tropical country, India is probably one of the biggest markets of cold drinks in the world. By cold drinks I also mean the plethora of options at your discretion like nariyal paani, nimbu paani, kala-khatta, lassi etc. Soft drinks are a big part of this industry but in India they are just a part of it. “Nimbu paani” also known as “shikanji” in north india is still the highest consumed drink in this country.Also lemon drinks form a good 11% of the soft drink industry by sales and this is set to grow since Indians do know how to squeeze lemons!

Do they actually prefer squeezing lemons to having Mango Milk shakes? Well the truth is that lemon drinks are popular because they are cheap. And price is the single most factor determining the popularity of a drink in India.

Milk drinks though healthy, form only 2% of the entire beverage industry. Also the milk industry has been able to reach a figure of 2% thanks mainly to the smart pricing of “Amul chaas” at Rs.5 which forms a big chunk of the milk beverage sales.

Those urbanites prefering soft drinks to roadside nimbu paani is mainly because of the hygiene factor. This gives a wonderful opportunity to corporates to come up with a packaged/bottled drink offered at somewhere around Rs.4-5. How they will manage this and how will they handle a pan-India distribution network would be interesting to see.

As the development status of a country improves, Pepsi and Coca Cola are two companies that start getting the jitters, for across the world whenever a country has started progressing and reached a certain level, the market shares of both these companies have started reducing due to the entry of local players who have the capability to build proper distribution systems. And I believe India has reached that stage now. And with the retail boom, soon this industry could get flooded with many different packaged drinks at various prices to suit every consumer segment. Whether someone is able to come up with a 250 ml bottle for Rs 4-5 remains to be seen. Perhaps after the 1 lakh car the next big news could be “ the 4 rupee drink”.

Till then when dealed with a lemon make lemonade. Leverage the beverage market!

Aditya Khandekar