India’s soft drink market has witnessed strong growth in recent years. The double-digit growth in this market has attracted the attention of both consumers and industry players. However, the significant contribution of energy drinks makes this growth even more interesting. Over the past two years, energy drinks have emerged as a driving force behind expanding the industry’s footprint and reshaping the beverage landscape in the country.
What accounts for the increasing popularity of energy drinks among Indians?
How are beverage companies positioning themselves in the energy drinks market? Let’s delve into the details.
What’s Happening?
According to the Economic Times, market research firm Euromonitor International predicts that India’s soft drink market is expected to reach up to $10 billion by the end of this calendar year, with an anticipated annual growth of around 18%.
Traditionally dominated by carbonated beverages and fruit-flavoured soft drinks, the Indian soft drink market has seen some changes. In this market, energy drinks have carved out a significant space. Several factors contribute to the growth in demand for energy drinks, including shifting consumer priorities and the increasing need for instant energy boosts in today’s fast-paced lifestyle.
Companies’ Stakes in Energy Drinks
Speaking of companies, PepsiCo is making a significant bet on its energy drink brand ‘Sting,’ according to the Economic Times. Coca-Cola, on the other hand, re-launched ‘Charged’ in the same category earlier this year. The brand was initially launched in 2017 but failed to gain traction then. Additionally, alcoholic beverage company AB InBev entered this category in 2021 with the launch of its Beats energy drink.
According to a report by Statista, the energy and sports drinks market in India reached a revenue of INR 5.7 billion USD in 2023. The demand for energy drinks in India is steadily increasing, with new pricing strategies being a significant factor.
Aiding Growth with New Pricing
Red Bull has been the market leader in the energy drink category in India for over 20 years, with its 250ml can priced at Rs 125. The high cost of energy drinks has been a deterrent to their growth in the Indian market. However, times are changing. PepsiCo India, which launched Sting in 2017, has consistently expanded its product across the country with the help of its pricing strategy. The 250ml can of Sting is currently available at Rs 35. This move has sparked a pricing war in the market.
Coca-Cola India, the country’s second-largest carbonated beverage company, re-launched ‘Charged’ this year, pricing it at Rs 20 in direct competition with Sting. This move directly contributed to an increase in the company’s revenue.
Youth Appeal and Marketing Strategies
A significant factor driving growth in the energy drink market in India is the youth demographic. Energy drink brands have leveraged targeted marketing strategies to capitalise on this. Companies have enlisted several prominent faces and athletes as brand ambassadors, making energy drinks trendy and playing a crucial role in the success of these companies.
What’s Next?
India, with a population of over 1.3 billion, has a significant percentage of young people. The energy drink market is expected to continue growing in the future. However, balancing the appeal of energy drinks with regulatory considerations will be crucial to sustaining this growth. Nevertheless, it is clear that the energy drink market has injected a new vitality into India’s soft drink landscape.
That’s it for today. We hope you’ve found this article informative. Remember to spread the word among your friends. Until we meet again, stay curious!
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