Sale of alcoholic beverages manufactured by an MNC contributes to around 374,000 jobs.
Beverages as a business are taking a new shape in India. Over the years food verses beverages ratio has come up forcing industry to do lots of innovation in the segment. And, why not? Indians have always loved drinking their favourite tea, colas and mojitos, but over the last few years there are lots of changes in the beverages market. We see lots of chefs playing around with beverages and cocktails and also new age startups giving more natural and healthy alternative options to the ever demanding Indian customer.
According to a latest report by PwC-FICCI, “The alcoholic beverage segment has contributed significantly to jobs and revenues in the food services industry. Sale of alcoholic beverages manufactured by an MNC contributes to around 374,000 jobs (i.e., around 5% of total jobs in the industry) and around INR4,000 crores in gross value add (GVA) to the retailing industry.”
With over 50% of India’s population below the age of 25 and around 65% below the age of 35, the appetite of the young Indian population has been a key driver in industry growth. With India’s population skewed towards younger consumers, beverages as a business is witnessing significant growth potential in the coming years. Here are 4 Key Beverages Trend ruling 2019:
Gin is Going to Become Big: Gin as a trend is becoming big in India. Bars and restaurants menu is filled with gin and gin-based drinks. Globally, ‘Gin renaissance’ is hitting up the bars and pubs. There's no doubt about just how much gin has grown in the world of spirits, with Scottish gin especially undergoing a massive revival. “But I do firmly believe Gin is going to be really big in coming years. It’s such a huge game changer for the industry and something the F&B Industry could definitely do with,” shared Arpan Gupta, Co-Founder at Detroit Garage Bar.
Iced Tea Will See a New Growth: Globally, Iced tea is 8 per cent of the total market with $65 bn market. But surprisingly, in India iced tea constitutes only 1 per cent of the overall beverages market. Hence, there is lots of exciting opportunities waiting to be unfolded in the segment. If you look at the global market like the US and the Europe, the share for carbonated drinks are going down and the share of iced tea is going up making it the third largest category in the world. “Iced tea would trend in 2019 because that’s been the global trend as well. Also, if you look beyond carbonated drink this is the most easily accessible and understandable option which is natural because people want natural products,” said Siddhartha Jain, MD of Positive Food Ventures.
It will be the year of Craft Beer: There has been a sudden change in the attitude among young Indian consumers towards alcohol consumption lately. The growing middle class society understands the trend of social drinking and there has been a removal of social restrictions and stigma associated with drinking. The beer market in India is at a very nascent stage but has the potential to make it big. The craft beer market is just going to grow from here and it is not going to be one brand or the other, this growing market will be big enough for brands to co-exist and grow collectively. In both restaurants and packaged beverages there is lots of experimentation. We have all become foodies and it is a global trend. It is towards healthier, fresher, artisanal, smaller batches, innovative stuffs. “Every brewery now a days has its own style of craft beers. We are proud to say that Simba is the first home grown craft beer brand as we have our own brewery in comparison to other brands that outsource their beers,” pointed Prabhtej Singh Bhatia, Founder, Simba, adding that with the emerging craft beer culture, appreciation for quality and premium product has been witnessed with the increase in appetite for beer.
The Rise of Energy Drink: Globally sports drink is 4th in number but in India it is 2 per cent. Increased urbanisation, rising disposable income and growing health consciousness among the Indian youth has increased the demand for non-carbonated drinks. The energy drinks segment has been attracting a lot of consumer traction and performed impressively in recent years. Since its emergence in the Indian market, the energy drink category has enjoyed remarkable success, displaying a good growth in sales.
“India’s energy drink market was valued at USD 3663.7 million in 2017 and is expected to reach USD 4626.1 million by the end of 2022, growing at a CAGR 4.5 per cent. At the same time, long and erratic working hours and the trends of social gatherings are driving Indian consumers towards the consumption of energy drinks,” shared Abhinav Biswas, Sales and Marketing Head, Goldfogg India. Hence, we can say that energy drinks are no longer confined to bottom shelves of modern retail and have acquired the status of mainstream beverages.