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REPORT ON INDIAN BEVERAGE INDUSTRY 1. Beverage Overview------------------------------------------------------3 2. Indian Beverage Industry-------------------------------------------------------------------------------------------------------------------------4 3. Share of Volume by Beverage Category of India------------------------------------------------------------------------------------------------7 4.

Per Capita Consumption In India-----------------------------------------------------------------------------------------------------------------8 5. Key Figures on Indian Beverage Industry--------------------------------------------------------------------------------------------------------9 6. Factors driving developments in the Indian Beverages Sector---------------------------------------------------------------------------------10 7. Packaging of Beverage Industry------------------------------------------------------------------------------------------------------------------11 8 . Beverages for Health and Wellness in the Indian Market------------12 9. The beverage industrys response towards Health andWellness------12 10. Barriers to taking functional beveragesmainstream------------------13 11. Converting Barriers into the Opportunities-----------------------------14 12. Indian Beverage MarketPerspectives-----------------------------------15 13. Indian Beverage Distribution & Marketing Network--------------------15 14. Issues Related to Indian Beverage Market-----------------------------16 15. SWOT Analysis Of Indian Beverage Industry---------------------------18 16. The Leading Beverage Companies And Their Competitive Brands----19 y Coca Cola Company-----------------------------------------------20 2 TABLE OF CONTENTS

PepsiCOIndia------------------------------------------------------23 y UBGroup-----------------------------------------------------------28 y Dabur India Limited-----------------------------------------------30 y Red Bull------------------------------------------------------------32 y Caf Coffee Day---------------------------------------------------34 y Nestle India--------------------------------------------------------35 y Tata Global Beverages Ltd----------------------------------------37 17. Major Markets Under Indian BeverageIndsutry------------------------40 y Indian Non-Alcoholic BeverageMarket---------------------------41 y Indian Soft Drink Market------------------------------------------43 y Indian Tea Market-------------------------------------------------45 y Indian Alcoholic Beverage Market--------------------------------47 y Indian Beer Market------------------------------------------------49 y Indian WineMarket------------------------------------------------52 1 8 . Key risks to the beverageindustry--------------------------------------54 19. Future Projections Of Indian BeverageIndustry------------------------55 3 Beverage Non-Alcoholic Beverages Alcoholic BeveragesNon-carbonated Carbonated Fruit Based GrainFruit Juices,Coffee,Tea,PackagedWater Colas,Soda,Tonic Water Wine,BrandyBeer, Whisky A beverage is a drink specifically prepared for human consumption.Beverages almost always largely consist of water. Drinks oftenconsumed include: Water (both flat or carbonated),Juice baseddrinks, Soft drinks, Sports and Energy drinks,Alcoholic beverages likebeer or spirits ,Coffee, tea ,Dairy products like milk. Commonly,drinks are filled into containers, like glass or plastic bottles, steel oraluminum cans as well as cardboard supported packages, like the"TetraPak" or others. Filling of beverages can be done cold, hot,

ambient andcoldasepticfilling to mention the latest trend of beverage marketing and technology.The beverage is mainly categorized into two major categories based uponthealcoholic and nonalcoholic nature of the drink. Non-Alcoholic beverages arefurther otwo types based upon carbon content. These beverages contain Fruit juices,Coffee,Tea, Soda, Colas. The Alcoholic beverages are based upon the fruit contentand grain.It may be Wine, Brandy, Whisky or Beer. Beverage Overview 4 India has a population of more than 1.150 Billions which is just behindChina.According to the estimates, by 2030 India population will be around 1.450Billion andwill surpass China to become the World largest in terms of population.BeverageIndustry which is directly related to the population is expected to maintain arobustgrowth rate. The price stability throughout the year has contributed to theincrease indomestic liquor sales.The Indian beverage market offers hot options.According to Dabur, the fruit beverages industry in India now stands at Rs1100crores (approx. Euro 180 million) and the market has grown at the rate of 30%where Dabur India, through the new launch Real Burrst, is looking atestablishing amarket share of 4-5% in next 2-3 years.Part of the industry of fast moving consumer goods is also the beverageindustry. Thetotal beverage industry in India is being estimated to grow at 17% this year, according to experts. "Food and beverages segment has not suffered despitetheslowdown in the economy. FMCG in our stores has done very well. In fact,weregistered 10-15% growth in this segment last year," said a spokesperson atSpencer's Retail Ltd.Beverage majors like Coca Cola India, for example, again reported growingsales.Coca-Cola in India reported a solid first quarter 2009 results not onlydespite achallenging economic environment, but also with unit case volumeincreasing by31%. And eight quarters out of the 11 quarters had a double-digit growth.To foreign observers of the market, these figures might sound unbelievable,asWestern markets are saturated and have not seen such figures for long time.But inIndia, various positive factors drive the beverage markets. One is the risingnumberof people in the middle class with extra money to spend on new beverageslike wine,new brands of imported whiskey, or the fancy energy drinks, some of whichare reallygood to enable people to work longer, to listen longer during conferences,and evento party longer and have fun. Leader in this segment is Red Bull, but someothergood and very effective drinks one even very healthy - are already or soonenteringthe market.Another factor is the sheer size of the number of people in India. Even theruralhouseholds, as long as the monsoon is good, get purchasing power and canparticipate in consumer markets. Where ever the purchasing power is stillnot big Indian Beverage Industry 5 enough, companies offer smaller packs for Rs. 10 or Rs. 5, especially to beseen inthe snack market. Hot summers in India also help a bit to sell beverages.The large untapped market potential for store-bought non-alcoholicbeverages, inparticular carbonated beverages, juice based drinks and energy or sportsdrinksamong urban/suburban consumers in India. Approximately 120 billion litres of beverages are consumed by Indians everyyear,but only 5% represent store-bought packaged beverages. The majority of Indianconsumers (75%) still consume non-alcoholic store-bought beverages lessthan oncea day, highlighting a large untapped market opportunity, particularly in thecarbonated drinks and juice or juice-based categories (estimated to be worth$1.5Billion and $.25 billion respectively). In order to increase consumption andpenetration of such beverages manufacturers will have to address the twoprimaryreasons why some Indians abstain entirely, that is, health concerns andundesirabletaste.The study investigates consumption frequency

and habits, the importance of variousproduct attributes, and brand preferences across age, household income,city in Indiaand beverage category. This study has implications for manufacturers,distributors,retailers and investors hoping to capitalize on the growth of these beveragecategories in India and distinguish themselves in the increasingly crowdedmarketplace.India is a booming market for the beverage industry as well. It alreadyaccounts forabout ten per cent of global beverage consumption today. This means thatthecountry has the third-largest beverage consumption after the USA andChina. Butthat is not the end of the road. Market analyses indicate that beverage salesin Indiawill be increasing by more than 60 per cent between 2008 and 2012. SinceIndia is(still) a country of tea and coffee drinkers, packaged cold drinks haveenormouspotential. Packaged water, beer, spirits and carbonated drinks are recordingwhatrates are in some cases high double-digit growth. All in all, annual per capitaconsumption of packaged beverages is supposed to triple from 2.6 litres in2000 to8.7 litres in 2012.Demand for milk and milk-based beverages are also rising. India is theworlds biggest producer and consumer of milk, since milk plays a major role in theIndiandiet. The consumption of milk and milk-based beverages has increased byan annualaverage of 2.7 per cent in the last four years and most of them (65 per cent)are sold loose / unpackaged. The proportion of the market accounted for bypackaged milk 6 and dairy products are increasing, however. In the past four years, forexample,demand for milk filled in pouches has grown by 4.5 per cent annually, whilethe figure for milk in cartons is about 25 per cent. The rising consumption ismaking itnecessary for appropriate investments to be made by the beverage industry.The sector is highly fragmented and 95 per cent of these producers havesmall orvery small operations. Of this, the health beverage industry is valued at$230 million.The Indian beverage industry faces over supply in segments like coffee andtea.However, more than half of this is available in unpacked or loose form.Indian hotbeverage market is a tea dominant market. Consumers in different parts of thecountry have heterogeneous tastes. Dust tea is popular in southern India,while loosetea in preferred in western India. The urban-rural split of the tea market was51:49 in2000. Coffee is consumed largely in the southern states. The size of the totalpackaged coffee market is 19,600 tonnes or $87 million.The total soft drink (carbonated beverages and juices) market is estimatedat 284million crates a year or $1 billion. The market is highly seasonal in naturewithconsumption varying from 25 million crates per month during peak seasonto 15million during offseason. The market is predominantly urban with 25 percentcontribution from rural areas. Coca cola and Pepsi dominate the Indian softdrinksmarket. Mineral water market in India is a 65 million crates ($50 million)industry. On an average, the monthly consumption is estimated at 4.9 million crates,whichincreases to 5.2 million during peak season. 7 0.00% 2 .00% 4 .00% 6 .00% 8 .00% 1

0.00% 12 .00% Share % 2 00 22 003 2 00 42 005 2 00 62 007 Years MilkTeaBottled Water CoffeeDistilled SpiritsCarbonated SoftDrinksBeer Fruit BeveragesWine Share of Volume by Beverage Category of India 8 INDIAN BEVERAGE MARKETSHARE OF VOLUME BY CATEGORYSegment 2 00 22 003 2 00 42 005 2 00 62 007 Milk 10.3% 10.4% 10.5% 10.6% 10.8% 11.1%Tea 6.3% 6.4% 6.5% 6.6% 6.4% 6.5%BottledWater0.2% 0.2% 0.3% 0.4% 0.4% 0.4%Coffee 0.2% 0.2% 0.2% 0.2% 0.2% 0.2%DistilledSpirits0.1% 0.1% 0.1% 0.1% 0.1% 0.2%CarbonatedSoft Drinks0.2% 0.2% 0.2% 0.1% 0.2% 0.2%Beer 0.1% 0.1% 0.1% 0.1% 0.1% 0.1%FruitBeverages0.0% 0.0% 0.0% 0.0% 0.0% 0.0%Wine -- 0.0% 0.0% 0.0% 0.0% 0.0% Subtotal 1 7.3% 1 7. 6 % 1 7.

8 % 18 . 1 % 18 . 2 % 18 .7% All Others* 82.7% 82.4% 82.2% 81.9% 81.8% 81.3% TOTAL 1 00.0% 1 00.0% 1 00.0% 1 00.0% 1 00.0% 1 00.0% Source: Beverage Marketing Corporation PER CAPITA CONSUMPTION IN INDIA 9 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 and25%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 2.7per 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 agrowth of around 7%. The total soft drink (carbonated beverages and juices) market is estimatedat284 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 fromruralareas. Coca cola and Pepsi dominate the Indian soft drinks market. Indian Mineral water market size : 50 million industry. Key Figures on Indian Beverage Industry 10 India is a growing and developing country which is having a very higheconomicgrowth with the drastic increase into the population size. Due to thedeveloping economic condition, there is increase in the competition among themanufacturers,retailers, dealers to promote their products at competitive prices.The increase in the India population has given a high demand of beveragemarketproducts. The Indian beverage market is segmented into the two majorsegments Alcoholic and Non-Alcoholic Beverages.Again these categories of beverages are subdivided into the carbonated andfruitbased drinks. Tea and Coffee also contributed majorly into the BeverageIndustry.Indian Beverage market distribution and marketing channel is highlynetworked andhas a very approach to the customers. Due to the globalization andtechnologicaldevelopments there is highly innovative products are coming into the IndianBeverage markets which are appreciated by the Indian population.In India, here are various forms of beverage market get to be seem in theform of retailers, Restaurants, Coffee shops, Sport events, Hotels etc. There are certain factors which are driving developments into the IndianBeverage sector : y Economic growth

Factors driving developments in the Indian Beverages Sector 11 y Population growth y Competition for Raw materials y Power of retailers y Globalization / Regionalization y Research & Development y Technological Developments y Food safety and regulation y Consumer Demands and trendsThe beverage industry is one among the front-liners where massiveinvestments arebeing made for expansion and technological up gradation. The packaging of beverages both carbonated and non-carbonated, is a complex technologicalbranch inthe Food Processing /Packaging industry. The traditional returnable glassbottle hasgiven way to newer plastic containers as well as cartons. The current trend isto improve the conventional containers, extend their share in the large market,extendthe shelf-life of the products, provide greater consumer convenience andultimately toproduce economic packages. The changing Indian scenario, withimplementation of various technologies and market promotion activities, has changed the scopefor thisindustry exponentially.The Indian soft drink market is worth Rs. 21,600 million a year with agrowth of around 7%. The soft drinks segment had grown to Rs. 1,05,000 million inthe year2005. The production of soft drinks has increased from 6230 million bottlesin 1999-2000 to 6560 million bottles during the year 2001-2002.The alcoholic beverages industry, covers Indian Made Foreign Liquors(IMFL), countryliquor and beer. IMFL includes Carbonated Beverages in PET Bottles wine,whisky,gin, rum, brandy and other white spirits. IMFL industry in India is roughlyvalued atRs. 28,000 crores, growing at a rate of 9-10% per annum in volume terms.TheIndian beer market estimated currently at Rs. 7,500 million a year has beengrowingat the rate of 15% per annum. PACKAGING OF BEVERAGES 12 The packaging requirements for all types of beverages are: Absolutely leak-proof and prevent contamination Protect the contents against chemical deterioration No pick up of external flavours Be hygienic and safe Retain carbonation in the case of carbonated beverages Economical, easy to use and dispose Good aesthetic appearanceThe global health and wellness trends in the beverage sector are beginningto noticean increasing level of activity in India. Economic drivers : With strong economic drivers of consumer spending,Indiais a very different market from that of the 1980s or 1990s.With a GDP of USD800 billion and a GDP growth rate in 2005-06 of over 8 percent, India is

now the third largest economy in Asia. And this has not been the result of somefreak surge in growth. Average GDP growth of the last 10 years has been6.5percent per annum. And most significantly, the stepping up of GDP growth isdriven primarily by domestic demand rather than exports. Demographic drivers : Macro economic factors tell only one part of the story.There are compelling demographic trends in the country that promise newandsustained opportunities for beverage product suppliers who can read rightthesignals.The country boasts an expanding middle class that is currently 350 millionstrong (apopulation larger than the total population of the United States or theEuropeanUnion). Increased urbanization and rising disposable incomes are creatingnew andlarge target markets for beverage products that go beyond commoditystatus and Beverages for Health and Wellness in the Indian Market 13 command higher prices. The rapid growth in the retail sector (over 20percent perannum) is just one confirmation of the increasing buying power of thismiddle class.There is today a growing health and wellness consciousness amongconsumers andan increasing importance given to fitness and healthy lifestyle choices.Changingwork and lifestyle habits leave less time for home cooking and therefore spurdemandfor convenience and complete nutrition from meal replacements. There is agreaterinclination to self-care rather than medicate, a greater awareness of the functional benefits of health beverages and a greater willingness to pay a premium forsuchbeverages.With these strong drivers of growth, it is not surprising that the beverageindustry inIndia has begun to respond with products that are marketed clearly on ahealth andwellness platform However, to set the record straight, health and wellness is not a wholly newplatform for the Indian market. India has, for decades, had a thriving healthfooddrinks market. Market leader, GlaxoSmithKline Consumer Healthcare (GSKCH),has had iconic brands Horlicks, Boost, Viva and Maltova create 'top-of-themind'recall across generations of Indians. Other suppliers, Cadbury (with Bournvita), Nestle (with Milo), Heinz (with Complan) and Gujarat Co-operative MilkMarketingFederation (GCMMF) (with Nutramul and now Amul Shakti) also enjoy aloyalfollowing. In the non-carbonated beverages sector, Parle Agro's Frooti remains thelargest brand in the fruit drink segment, while Dabur's Real Fruit Juice leadsthe juice segment.The fact is that there has all along been a strong multinational presence inbeveragemarket and more recently this has been witnessing the emergence of Indian multinationals across this sector.However, much of the marketing for health food drinks in the past has beengeneralhealth and energy positioning, rather than the focus on specific benefits oringredients that is characteristic of most mature health food markets. This isnowchanging and the specific initiatives of some companies are going a long waytocreating a truly dynamic health and wellness beverage sector in India.Global market leader in Probiotic fermented milk drinks

, Yakult, has teamedupwith Danone to start manufacturing its probiotic fermented milk drink inIndia from2007. Calcium-fortified beverages are a rapidly growing market. The beverage industrys response towards Health and Wellness 14 Some examples of brands that have introduced calcium-fortified productsare AmulShakti , Coca-Cola Indias Mazza , and malted drinks such as Horlicks (GSKCH), Milo (Nestle), Complan (Heinz), Anlene (Britannia New Zealand Foods)and Protinex (EAC Nutrition). GCMMF launched sports drink ' Stamina ' in early2006. Red Bull was launched in India in 2003.Carbonated beverage giants Coke and Pepsi have also planned to widentheir productportfolio with health-based beverages (non-carbonated). Pepsis Gatorade isalready on the market. And in what must be among the most significantrecentcommercialization efforts of a traditional Indian drink, Amul Masti SpicedButtermilk was launched (in a 200 ml tetra pack), marketed on the platformof beingfree of colour, preservatives, acids and sucrose sugar.Despite this flurry of activity, the market is still plagued by low levels of awarenessand a lack of sophistication in consumer choices. Price remains a stumblingblock.Public concerns over safety and quality of beverages have been aggravatedbyresearch findings (and the subsequent controversy) over alarming levels of pesticideresidues in bottled water and soft drinks. Skepticism from the scientificcommunitycontinues to limit product endorsement. Furthermore, there is a lack of detail andclarity in food safety regulation regarding nutraceuticals and functionalbeverages,and regarding health claims.Within the beverage industry there is inadequate understanding of how totaketraditional ingredients into the modern food processing environment. Andthen of course, there is competition from other products such as dietarysupplements.Finally, the retail sector, despite its growth, is still mostly unorganized andthis limitsthe ability to differentiate health and wellness products through theallocation of exclusive shelf space devoted to this category.To overcome these challenges, beverage suppliers need to approach themarket witha multi-pronged strategy for increasing penetration. It can be given asfollow

Price resistance can, to some extent, be overcome by moving from imported to manufactured in India products. For example, imported Gatorade costINR45 per 200 ml bottle. Now, made in India, it costs INR25. Barriers to taking functional beverages mainstreamConverting Barriers into the Opportunities 15 Substitution or modification is in some ways easier to execute thanaddition.(Examples of substitution would be herbal tea replacing regular tea or soymilkreplacing regular cows milk. Examples of modification would be low-fat, nofat, lite variants of established beverage brands). The growing trend towards on-the-go consumption/out-of-homeconsumption(at the workplace, in schools, colleges and gyms) presents suppliers withnewplace and form of consumption options (for example, vending machines fordispensing health drinks at schools). Abandoning the one-size-fits-all positioning and generic selling points of thepast, in favour of targeted and specific messaging based on validated healthbenefits is likely to be more effective to the better informed middle classtoday. Leveraging the intrinsic appeal of traditional Indian ingredients such asayurvedic, herbal or oleoresin ingredients, but delivered in a modern, safe,convenient and consistent form, or packaging and branding traditionalIndianhealth drinks such as buttermilk and lassi, could create whole new marketsthatderive their strength from known and trusted traditional ingredients ordrinks. In the end, beverage suppliers who unlearn many of the long-heldmisconceptions about Indian consumers and respond instead to theirchangingneeds and priorities will be best placed to maximize the health and wellnessopportunity in this large andgrowing market.With the overwhelming successes of the Green and White Revolutions, Indiais nowfervently poised for the beverage revolution. The entry of multinationals,aggressive rise of commodity branding and low cost of technology is changing theeconomics of the Indian food & beverage industry. The rise of aggressive regional playersmakingforays into categories where entry barriers are low and a boom in Indianbeveragemarkets and the rising need for these products are the key reasons for thisgrowth inbeverage business.The soft drinks perspectives the demand is quite high in the category of carbonateddrinks. The market demand of beer, whisky is also quite high in the uppermiddlesegment at restaurant and Hotels.The trend of white spirits like Vodka, Bacardi Rum also preferred over otherdrinks.These drinks are said to hurt less than Indian whiskey, as unlike most Indianwhisky, Indian Beverage Market PerspectivesIndian Beverage Distribution & Marketing Network 16 these white spirits are not made out of molasses.When it comes to Energy drinks,the taste of energy drinks are not liked bymany of people, as for some, these taste like cough syrup. And they are also highlypriced.But there are also people who like to mix it, for example many like Vodkamixes of Vodka with Red Bull. Social Issues For the alcohol industry the social concerns are numerous, ranging fromassociateddisease as well as health and safety impacts from high levels of alcoholconsumption,to under-age drinking, and in

developing country contexts the portion of spending onalcohol versus basic needs. Domestic violence and an exacerbation of poverty have Issues Related to Indian Beverage Market 17 made alcohol abuse the single most important problem for women in India.Thereport points out that as prosperity levels increase across Asia, we canexpect to see increasing levels of alcohol consumption. This presents both an opportunityfor listedcompanies in Asia, but given the potential negative social impacts, it alsopresentssignificant challenges.Soft drink companies are advised to anticipate government regulations,particularlyin relation to their marketing approaches to children. Companies need to beinnovative in creating healthier soft drink products as in the case of PepsiCoand CocaCola focusing on a low sugar, natural sweetner for their products andVietnamese andChinese brands tapping into the demand for alternatives to carbonated softdrinks.Companies should assess their supply chain risks and put in place codes of conduct,monitoring and capacity building initiatives to prevent these. As consumersbecomemore aware of supply chain issues, good supply chain management cancreate acompetitive advantage.Companies that rely on agricultural supply chains, particularly large numbersof smallholding farmers, should look to developing partnerships with government,local NGOsand international agencies to better manage social risks. Governance Issues A typical challenge in the Indian beverage sectors fight against corruption isthecomplex interrelationship between politics and the private sector. Stronggovernanceis clearly vital for companies to ensure the integrity of their organizations,relationships with consumers and government authorities to avoid corruptbusinesspractices.Companies should look to providing more transparency and accountability interms of the selection of board members, remuneration, links between remunerationandperformance, diversity of the board and decision making processes. Alcoholcompanies should ensure a high level of transparency in terms of thefinancialsupport provided for industry groups that in turn lobby national governmentsfor changes in alcohol policiesCompanies should put in place initiatives and get involved in collective actionto raisecorporate integrity, especially in relation to corruption and bribery. Environmental Issues 1 8 Companies need to first assess to what extent they and their suppliersdepend onwater and the associated risks. This should be done in consultation with keystakeholders.Companies should measure their water footprint and look to how they canbestmanage water resources through enhanced processes and infrastructure.Companiesshould implement rigorous water testing and monitoring systems and installtreatingequipment. Water pollution and treatment is already a focus of Asian listedcompanies and with the growing emphasis on regulation and enforcementthis looksset to increase.Companies need to realize that global commitments to improve waterefficiency canonly be implemented locally, requiring versatility and local managementsupport.Companies should disclose water performance and the initiatives that theyareputting in place. Companies need to assess their

contribution to climatechange, putin place measures to reduce emissions and waste and report on progress. 19 STRENGTH y Renewal and investment y Innovation and Technological development y Experience in searching for new markets, niches and partners y Availability of key raw materials, cheaper labour costs and presence acrosstheentire value chain gives India a competitive advantage. WEAKNESS y Old technologies and poor work organization y Insufficient pace of creation and implementation of innovations y Insufficiently effective activities of small and medium-sized businesses y Change in household consumption patterns OPPORTUNITIES y Presence of a favorable market Market globalization y Foreign direct investment promoting knowledge and developing exportchannels y Transfer of production to the countries with smaller labour costs y Well established distribution network THREATS y Unfavorable market trends in energy resources y Increasing competition among exporters and decreasing dependency ononemarket y Intense competition between the organized and unorganized segments andlowoperational cost. y Water scarcity in India y Implementation of Goods and Service tax by 2011

SWOT Analysis Of Indian Beverage Industry 20 There are so many large companies present in India who are leading playersin theIndian Beverages Industry. The companies are having large annualturnovers withwide range of product portfolios which include all kinds of beverage drinksfrom sodato energy drinks. These companies are having a large variety of productslike soda,water, Colas, Fruit based drinks, Lemon based drinks, Milk beverages, andFruitbased wine, beer, Whisky, Coffee, and Tea etc. with so many health andenergydrinks portfolio.These companies have a strong distribution and marketing channel whichsupply thebeverages products to customers through retailers, Coffee shops,Restaurant,Hypermarket and Supermarkets. The segment is highly distributed all overthecountry through a long chain of retailers and suppliers who are providingveryefficient service to the company.The leading Indian Beverage sector players are as follows: 1. Coca-Cola Company 2. PepsiCo 3. UB Group 4. Dabur India Ltd 5. TATA Global Beverages Ltd [TATA Tea] 6. Nestl India 7. Caf Coffee Day 8. Red Bull India Pvt Ltd The Leading Beverage Companies And Their Competitive Brands 21 Company Overview Established in 1886, Coca-Cola is the worlds most ubiquitous brand. Thecompanyand its subsidiaries are present in over 200 countries employing over 49,000individuals and generating revenues to the tune of US$ 21 billion. The Coca-ColaCompany markets four of the worlds top-five soft drink brands; its beverageproducts encompass nearly 400 brands, including non-carbonated beveragessuch aswaters, juices, sports drinks, teas and coffees. The companys net incomeregistereda CAGR of 7.2 per cent over a 10-year period. Till date, Coca-Cola hasinvested overUS$ 1 billion in India and employs over 5,000 people. The Coca- Colasystem in Indiacomprises 25 wholly owned Bottling operations and another 35 franchisee-ownedbottling operations. A network of 27 contract-packers also manufactures arange of products for the company. Latest Update y Coca-Cola net revenue up 5%,July 2010 y India sales jump 22%,July 2010

y Net revenue of $8.26 billion July,2010 Business in India Coca-Cola is a leading player in the Indian beverage market with a 60 percent sharein the carbonated soft drinks segment, 36 per cent share in fruit drinkssegment and33 per cent share in the packaged water segment. Coca Cola Company 22 0 1 0 2 0 30 4 0 50 6 0 Share % CarbonatedSoft drinksFruit Drinks PackagedDrinkingWater Drinks Segment Coca Cola Business In India Share %

Outsourcing distribution and manufacturing Coca-Cola India minimized its capital needs by meeting new manufacturingcapacityneeds through external co-packers, outsourcing its distribution and meetingits inmarket-refrigeration and cooling needs by giving incentives to retailers to self-fundthe same through its Own Your Fridge Scheme. Today, the company hasanextensive rural and urban distribution network. Coca-Cola adopts a hub andspokeformat distribution network ensuring that large loads travel longer distancesandshort loads travel short distances. The company has increased its villagepenetrationfrom 9 per cent in 2000 to 28 per cent in 2004 and covers approximately175,000villages today. Rural India now accounts for 30 per cent of Coca-Colas salesvolumes. Factors for success Coca-Cola has succeeded in spite of an extremely price-sensitive consumerwithentrenched beverage consumption habits tea, nimbu-paani (lemonade)and afragmented and geographically dispersed retail market, and a high taxenvironment.

Diverse product portfolio In keeping with its goal of emerging as the single largest entity in thebeveragemarket, Coca-Cola has a presence in multiple segments. Carbonated soft drinks (Coke, Diet Coke, Fanta, Thums Up, Sprite andLimca) y Fruit juice based drinks (Maaza) y Powdered soft drinks (Sunfill) y Coffee and tea (Georgia) 23 y Bottled water (Kinley) and Bottled soda (Kinley Soda)The company leverages this comprehensive portfolio, which includes a mixof its global brands as well as the locally acquired brands like Thums Up, LimcaandMaaza It sells these beverages in multiple volumes of 200 ml, 300ml, 500ml, 1.5 lbottles, tetra packs as well as through vendors (fountain machines) Explores new markets with the introduction of new drinks (Georgia,coffee and tea segment) and flavours (Vanilla Coke) BrandsCoca Cola The worlds favorite drink. The worlds most valuable brand. The mostrecognizable word across the world after OK. Coca Cola has a trulyremarkable heritage.from a humble beginning in 1886,it is now the flagshipbrand of the largest manufacturer, marketer and distributor of non- alcoholicbeverages in theworld. Availabilty : GLASS PET CAN FOUNTAIN200ml,300ml,500ml,1000ml 500ml,1.5l,2l,2.25l,500ml+100ml 330mlVarioussizes Thumps up It is a leading sparkling soft drink and most trusted brand in India. Originallyintroduced in 1977, Thums up was acquired by the Coca Cola Company in1993.Thisbrand known for its strong, fizzy taste and its confident, mature anduniquelymasculine attitude. SPRITE Sprite is global leader in the lemon line category, is the largest parklingbeverage brand in India. Launched in 1999,Sprite with its cut thruperspective has managed to be a true teen icon.GLASS PET CAN FOUNTAIN200ml,300ml,500ml,1000ml 500ml,1.5l,2l,2.25l,500ml+100ml 330mlVariousGLASS PET CAN FOUNTAIN200ml,300ml 500ml,600ml,1250ml,1500ml,2000ml,2250ml 330ml Various sizes

24 sizes FANTA Fanta has entered in Indian market in the year 1993.Fanta stands for itsvibrant color,tempting taste and tingling bubbles.GLASS PET CAN FOUNTAIN200ml,300ml 500ml,1.5 L, 2L,2.25L,500+100 ml330ml Various sizes LIMCA Born in 1971,Limca has remained unchallenged as the No. 1 sparkiling Drinkin the cloudy lemon segment.The main point in the brand is the Freshness.GLASS PET CAN FOUNTAIN200ml,300ml 500ml,1.5 L, 2L,2.25L,500+100 ml330ml Various sizes PULPY ORANGE The company developed a process that eliminated 80 % of the water inorange juice.forming a frozen concentrate that when reconsititutedcreated orange juice. Available in 400 ml,1 L and 1.25 L and also in PET pack size. MAAZA Mango.It is a fruit associated with good times like no other.Apy called theking o fruits.PET 1.2 L PET 600 ml 200mlRGB.250mlRGB250mlPETPocket200mlRs.45 RS.25 Rs.8 Rs.10 Rs.15 Rs.15 KINLEY Kinley water understands the importance and value of the life givingfore.Kinley water comes with the assurance of safety from the Coca-ColaCompany. Coca-Cola introduced Kinley with reverse osmosis along withlatest technology.Available in 500ml,100ml in PET. 25 GEORGIA GOLD Introduced in 2004,the Georgia gold of tea and coffee beverage is perfectsolution for the office and restaurant needs!It is available at quick servicerestaurant, Cinemas, Airports and in Coporates across all major matros inIndia. Hot Bevarges : Espresso, Americano, Cappucino, Caffe Latte,Machaccino , Hot chocolate, Cardamom Tea Cold Bevarages : Iced Teas,Cold Coffee Company Overview PepsiCo entered India in 1989 and has grown to become one of thecountrys leadingfood and beverage companies. One of the largest multinational investors inthecountry, PepsiCo has established a business which aims to serve the longtermdynamic needs of consumers in India. PepsiCo nourishes consumers with arange of products from treats to healthy eats that deliver joy as well as nutrition andalways,good taste.PepsiCo Indias expansive portfolio includes iconic refreshment beveragesPepsi, 7UP, Mirinda and Mountain Dew, in addition to low calorie options such asDiet Pepsi,hydrating and nutritional beverages such as Aquafina drinking water,isotonic sportsdrinks - Gatorade, Tropicana 100% fruit juices, and juice based drinks TropicanaNectars, Tropicana Twister and Slice, non-carbonated beverage and a newinnovation

PepsiCO India 26 Nimbooz by 7Up. Local brands Lehar Evervess Soda, Dukes Lemonade andMangolaadd to the diverse range of brands.The group has built an expansive beverage and foods business. To supportitsoperations, PepsiCo has 36 bottling plants in India, of which 13 are companyownedand 23 are franchisee owned. In addition to this, PepsiCos Frito Lay foodsdivisionhas 3 state-of-the-art plants. PepsiCos business is based on itssustainability visionof making tomorrow better than today. PepsiCos commitment to living bythis vision

having a combined share of about 67 per cent are McDowell & Company,BalajiDistilleries, Shaw Wallace & Co., Jagatjit Industries, Mohan Breweries & distilleries,Shiva Distilleries, Maharashatra Distilleries, Pearl Distilleries, Herbert sonsand MohanMeakin. The ten major beer manufacturers in the organised sector havingthecombined market share of about 75 per cent are United Breweries, MohanBreweriesand Distilleries, Skol Breweries, Balaji Hotels and Enterprieses, MohanMeakin,Mysore Breweries, Charminar Breweries, Aurangabad Breweries, HindustanBreweries, And Bottling and Mount Shivalik Breweries. Hops is another majorrawmaterial in short supply. Most of the hops used for flavouring beer areimported fromGermany. Indian companies producing IMFL use the molasses route formanufactureof IMFL as against the international pracouraging the use of non-molassesroute in 57 India. The alcoholic beverages industry is one of the few industries that stillrequiredlicence under the Industries Act (Development & Regulation). Through theminimumcapacity has been fixed at 50,000 hectoliters, the government in recenttimes hasissued licences to manufacture 150,000 hectoliters to some units. This hasarousedexpectations of the industry that the minimum economic size may be hikedto thisnewer level. There is an ample scope for future developments in themanufacturingtechnology adopted by advance countries since the demand for alcoholicbeverages isfaster than the existing production capabilities of the alcoholic beveragesindustry.Adequate availability of raw materials, improvements in processing andmanufacturing technologies, decontrol of liquor distribution, tax concessions,andabove all wide publicity of IMFL and beer brands through the media wouldnot only help the industry in enhancing its production but also in competing the worldwith itsproducts of international standards. Key Risks To The Beverage Industry 5 8 As water is the essential ingredient in a beverage product, as wellas vital for cooling and cleaning during the production process. Sowhen one considers that Indias current water supply isapproximately 740 billion m3, but it has been estimated that by2030 demand for water in India will grow to almost 1.5 trillion m 3,the industry will clearly be facing a major problem there. There willsimply not be enough water.Yet China, India and Indonesia are all a focus for beverage companies due totheirlower market penetration. There can be little doubt, however, that watersecurityissues will beone of the biggest threats to developing market potential. Lets first take alook at thealcoholic drinks industry.The market growth for alcoholic drinks is particularly strong in emergingAsianeconomies, driven by a range of

socio-economic factors.These includefavourabledemographics such as the greater proportion of young people reaching thelegaldrinking age and increased per capita income and urbanization in countriessuch asIndia and China.The water bottles market is also booming. The market for bottled water isdevelopingrapidly in Asia. Health concerns of polluted municipal water sources andincreasingwater shortages are expected to be key drivers of this, but wealth and theincrease inAsian middle classes will play the most significant role.Consumer demand for purity, hygiene and convenience is on the increase. InIndiathe market is expected to grow by 100 percent over the next five years andthere arecurrently more than 2,000 bottled water producers. Whilst there has been abacklashagainst bottled water in developed countries as the environmental impact of plastic bottles becomes more apparent, in Asia it looks set to become an increasingtrend. 59 Beverage Industry is projected to have overall growth between8% -8.5 % Indian non-alcoholic drinks market is expected to at a CAGR of around 15%during 2009-2012. India Alcoholic Drinks Market to Grow Over 9% CAGR during 2009-2013 The India Alcoholic Drinks Market Is Expected To Reach The 3 Billion LiterMarkBy 2012 The sectors which are projected to achieve excellent growth of 20% fromwine Fruit/vegetable juice market will grow at a CAGR of around 30 per cent invalueterms during 2009-2012 The energy drinks segment which will grow at a CAGR of around 29 percentduring the same period. All in all, annual per capita consumption of packaged beverages issupposed totriple from 2.6 litres in 2000 to 8.7 litres in 2012. Demand for milk andmilkbasedbeverages are also rising. The estimated INR 340 bn Indian liquor industry is expected to maintainitsCAGR of 15%

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