Coca-Cola sales down in India

Consumption patterns show shift towards healthier options

Business & Politics

October 28, 2016

/ By / New Delhi

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Sales of soft drinks in India is following a different trajectory than in other markets

Sales of soft drinks in India is following a different trajectory than in other markets

Even after the summers were harsh and long in India, Coca-Cola experienced a downfall in sales of fizzy soft drinks as people in India switch to healthier alternatives.

As widespread availability of health-based traditional drinks like lassi (buttermilk), aam panna (mango drink) and soya milk among others have affected the growth of fizzy beverages in India, resulting in soft drink companies losing consumers eventually.

The American carbonated soft drink producer, Coca-Cola, witnessed a decrease in the sales by 4 pc in July-September quarter this year, while during the same period last year, its sales in India had grown by 4 pc.

“The company needs to diversify into more categories other than sugary carbonated beverages, as sales of soft drinks in India is following a different trajectory than in other markets,” Arvind Singhal, founder and chairman of a retail consultancy Technopak, informed an Indian daily.

Young adults in India are gradually switching to healthier beverage options in the market and the youth is also following the trend. As more and more people, especially the young generation, are becoming health conscious, there is a decreasing demand for soft drinks in India.

“Many people of my age are under fitness regimes and we prefer fresh juice or coconut water instead of soft drinks. We do consume it once in a while but generally try to stay away from them,” says Abhinav Kapoor, 25, a resident of New Delhi.

Along with the increasing notion of sweetened beverages being unhealthy, the rise in taxes on sugary drinks in India may also be the reason for a decline in the consumption. Meanwhile, Japan and China have registered a unit case volume growth of 4 pc and 2 pc, respectively.

Festive pipes

As the festive season arrives in India, from August till January, beverage companies such as Coca-Cola and PepsiCo have made elaborate plans to cash in on the festive demand, after the crucial downfall period.

Earlier this month, PepsiCo Inc., an American multinational food, snack and beverage corporation, informed of their willingness to execute plans to reduce the amount of sugar in its beverages, to tap the health-conscious segment of consumers.

Apart from widening the range of its juice portfolio and promoting Coke as a drink that can be consumed on any occasion, Coca-Cola is also introducing a range of gift packs under the Utsav (festival) umbrella, which are priced between INR 100-500.

PepsiCo India, on the other hand, is focussingon its ‘Tropicana festive packs’ by offering a wide variety of price and product options this year through traditional, modern trade and e-commerce. The firm is also launching a onelitre pack of Tropicana Slice Alphonso mango drink, in response to consumer demand at a special price of INR 99 during the festive period.

“Flavoured milk is what best sells nowadays. However, the demand for soft drinks has slightly increased because of the festive season. It is still little in comparison,” says Manoj, a retailer in south Delhi.

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