Cold beverages, such as soft drinks, squashes, powdered mixes, and bottled juices, are now more prevalent at home than they were in May of 2019 when the percentages were just 38%. According to the marketing data analytics company Kantar, this growth rate is noticeably higher than in any annual year prior to the outbreak of the pandemic.
According to a poll, the in-home consumption of cold beverages, such as soft drinks, squashes, powdered mixes, and bottled juices, increased by 47% in May compared to 38% in 2019. The percentage of homes in the study that consumed the product is known as in-home penetration.
According to sources, the average household consumption of soft drinks has gone up too, to just over 7 litres annually from 6.5 litres in 2019.
The sector’s struggles in the summers of 2020 and 2021 were completely erased by its robust success in 2022 and a respectable 2023. From a purchasing perspective, the category has advanced significantly, with rising travel and quantity indicating a growing habit, according to K Ramakrishnan, MD of Kantar’s Worldpanel division for South Asia.
Families are also buying soft drinks more regularly. In contrast to 2019, households now purchase bottled soft drinks 6.5 times (on average) a year, indicating that the practice has become ingrained.
The majority of the industry is made up of bottled soft drinks, which have a 45% penetration rate in families that consume cold beverages. Juice penetration is 5%, whereas squash penetration is 6%. According to Kantar, the cold beverage industry, which is highly reliant on the seasons, had a penetration of 29% from March to May 2019. However, despite the heavy rains, the penetration rate from March to May of this year—37%—is about the same as the yearly in-home rate in 2019.
The pandemic’s effects, according to Nadia Chauhan, joint MD & CMO of Parle Agro, the company that creates Frooti, have caused a substantial shift in consumer behaviour since 2019. Larger SKUs (stock-keeping units) and shared packs have seen a noticeable rise in demand as a result of this change, mostly for use at home and for on-site meetings.
According to Chauhan, sales of larger packs of Frooti have increased by roughly 45% year-to-date in 2023 compared to 2019. The demand for larger packs is mostly due to the rising importance of value for money when making purchases. Consumers increasingly choose midsized packs that meet a variety of purposes while still being cost-conscious since they are looking for the most value and optimal spending options, according to Chauhan.
The summer, however, and the bottled soft drink segment continue to be important elements in the cold beverage sector. Before the epidemic, the months of March through May made up 40% of the yearly volumes. The contribution has increased to 42% volumes this year (pushing the yearly total to May 2023).
The typical amount of cold beverages purchased fell from 4.1 litres in March to May of last year to 3.8 litres in March to May of 2023.
A portion of this slowdown is attributed to an unseasonably mild summer and showers in the north, a region with heavy consumption. Coca-Cola, a beverage manufacturer, had previously stated in its worldwide results statement in July that unseasonal rains in the April-June quarter “unfavourably impacted” its India business. With close to 40% of yearly sales, the April-June quarter is the largest contributor to the annual sales of beverage firms.
In fact, Delhi and Punjab, two areas with significant consumption levels for the category, appear to be the main sources of the fall in purchasing. Ramakrishnan, however, said that southern states “continued to buy into the category more.”