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Rediff News  All News  » Business » Beverage cos to flood market with health drinks

Beverage cos to flood market with health drinks

February 28, 2008 12:00 IST
This summer, the beverages market will move a little more away from its carbonated drinks. Stretching the health and wellness plank, beverage makers have lined up five-six new health drinks in the coming months, more than in any other category.

Health drinks such as Ribena, Lucozade and X-35 Body fuel may soon become the household names, as PepsiCo, Coca-Cola, Amul and GlaxoSmithkline are planning to introduce these drinks.

"The penetration levels of aerated drinks in India are quite low compared with other developing and developed markets. Carbonates are expected to register relatively moderate volume and value growth as consumers are increasingly opting for healthier beverages such as fruit juices and fruit-based drinks, and even bottled water," said Harminder Sahni, managing director of Technopak Advisors, a retail consultancy.

Thus, the Rs 7,200-crore (Rs 72 billion) carbonated drinks category are expected to face the heat of the rising competition this summer from categories falling under the health umbrella. At present, these categories are juice and juice-based drinks, energy and sports drinks, malted beverages, probiotic drinks and bottled water.

PepsiCo India is eyeing a larger share of the Rs 1,200-crore (Rs 12 billion) juice and juice-based drinks market. "These drinks are the fastest-growing category in the beverages market and over 50 per cent of the volume is to come from the category this year," said Sanjiv Chadha, chief executive officer, PepsiCo India.

The company is also planning to expand its juice drink Tropicana Twister in three more flavours this year. It is also working towards increasing its share of the drinking water market.

Coca-Cola too is widening its portfolio. "Our entire brand portfolio has been designed to satisfy the various needs of the consumers -- be it hydration, energy, enjoyment or simply having fun. As part of the same endeavor, we are exploring a wide variety of beverage opportunities such as juice and juice-based drinks, energy and sports drinks, flavored water," said Atul Singh, president & CEO, Coca-Cola India.

According to an industry analyst, the gross margin in the fruit beverages and the bottled water categories are high, which is incentive enough for beverage makers to strengthen their portfolios.

GlaxoSmithKline Consumer Health Care is tempted to enter the category. Zubair Ahmed, managing director, said: "We plan to bring in Lucozade Sport for athletes and Ribena - a Vitamin C-based fruit drink into the market soon. However, there are regulatory challenges at present and the stability of products is to be tested."

Home-grown FMCG company Dabur has launched a malted food drink, Chyawan Junior, and plans to expand its Real juices and Real Twist portfolio.

Yakult Danone India is busy nurturing the newest kid on the beverage block, probiotic drinks. The nascent category has already struck a chord with the Indian consumer to become a Rs 200-crore market. Dairy company such as Amul and Mother dairy too have entered this segment with probiotic lassi.