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Indian Softdrink Industry Analysis

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1. INTRODUCTION For a number of years the main competition in the non - alcoholic sector was the battle between Coke and Pepsi for the cola market. But as the customer preferences and concerns started to change, the industry's giants have begun relying on new product flavours and looking to noncarbonated beverages for growth. Globally, the market size of this industry has been changing. Soft drink consumption has a market share of 46.8% within the non-alcoholic drink industry. Datamonitor (2005) also found that the total market value of soft drinks reached $307.2 billion in 2004 with a market value forecast of $367.1 billion in 2009. The modern soft drink industry started in 1886, when Dr. John S. Pemberton invented "Coca Cola" in …show more content…

The compound annual growth rate of the market volume in the period 2002-2006 was 11.2%. The market's volume is expected to rise to 17.9 billion litres by the end of 2011, this representing a CAGR of 12.1% for the 2006-2011 period (Datamonitor, 2007).
The major economic drivers for this growth have been market globalisation and the increase in disposable income. According to India Consumer Report of the McKinsey Global Institute (MGI), over the next twenty years Indian income levels will almost triple. Average real household disposable income will grow from 113,744 Indian rupees in 2005 to 318,896 Indian rupees by 2025, creating a 583 million – strong middle class. Rising incomes and changing customer preferences attributed to market globalisation would be a key factor driving the demand for soft drinks. This has been seen in other fast rising economies of South – East Asia where rising income and increased globalisation have contributed to an increasing trend in soft drink consumption.
2.3 Socio – cultural factors
The changing population demographics, societal concerns and lifestyles are important trends affecting the soft drink industry.
Firstly, India’s population growth rate is projected at 1.3 per cent per year over the next twenty years. This will give India a youthful demographic profile (the key segment for soft drinks) as its dependency ratio (the ratio of children and elderly to income earners) drops from 60 today to 48 by 2025. Also, if we look at the

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