Familiar Western megatrends drive India's beverage industry

By Beth Newhart contact

- Last updated on GMT

A growing population, competition for resources and environmental pressures are changing the Indian consumer. Pic: Getty/Arindam Ghosh
A growing population, competition for resources and environmental pressures are changing the Indian consumer. Pic: Getty/Arindam Ghosh

Related tags: Soft drinks, Juice, Juice drinks, Premium brands, Sustainability

India’s economy is shifting to a strong middle class, giving rise to more premium, ethical and personalized products. Beverage brands are adapting to these trends similar to what’s popular in Western markets.

The megatrends shaping India’s beverage landscape are set to be long-term transformative forces that represent consumer attitudes and behavior, according to Amulya Pandit, senior research analyst at Euromonitor.

The middle class is growing and strengthening in India, and urbanization, migration and aging are combining to shape new purchasing decisions and consumer mindsets. More women are also joining the workforce in India, which is changing the way companies market to consumers.

India’s 1.3 billion people represent about 17% of the world’s total population, and by 2030, 61% of all humans are projected to live in urban areas. About 995 million people will be older than 65, changing priorities for consumers as they age.

Growth in conscious consumption

With population growth showing no signs of slowing down, the competition for resources and environmental pressures are having an effect on India, driving behavior similar to Western shoppers.

Indian consumers are increasingly engaging in ‘meaningful consumerism’ and ‘conscious consumption’ when they shop, supporting small-scale, local businesses. They want their purchase decisions to reflect their values, focusing on ethical production processes.

India is set to ban single use plastic by 2022, including plastic bags, cups, plates, small bottles, straws and certain types of sachets, according to Pandit. However, per capita consumption of plastic is still expected to double in the country between 2015-2022.

Premium products are also getting a big share in India, thanks to a growing disposable income of 12% CAGR until 2025. There will also be $120bn worth of consumer expenditure on durable goods in India by 2025, and a 45% increase in discretionary spending, Pandit said.

Specific categories of premium products popular in India include those that calm the stressed out consumer and simplify their life. Quest for time is also a high priority, so any products and services that streamline tasks and create time tend to fare well.

Clean label, personal health benefits

Health is the new wealth in India, Pandit said, as consumers look to their food and beverage products for added value and to help reduce risk of ailments. A focus on self care has consumers willing to spend more on items that promise specific health benefits.

Many companies are leaning into the trend, investing in initiatives and supporting personalized health nutrition. For example, a demand for 100% juice is on the rise in India, and growing faster than lower-concentrated juice drinks and nectars.

The upswing in 100% juice purchases shows that Indian consumers want natural and clean label products, particularly ones that are cold pressed to retain nutrients.

Pandit said these products are about 2.5% more expensive than regular juice, but the new Indian consumer with a disposable income is willing to pay the premium to stay in line with the ‘health is the new wealth’ trend.

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