With early heatwaves and strong expectations of a prolonged season driving volume growth across categories, beverage makers across India have entered a strong summer-led demand cycle. Companies are doubling down on capacity expansion, cold chain infrastructure and deeper distribution to ensure last-mile availability, even as they target double-digit growth on the back of higher consumption and wider market penetration.
The strategy this year blends scale with sharper portfolio play. Companies are leaning into affordable price points such as Rs 10 and Rs 20 packs to drive mass volumes, while also expanding into desi and functional offerings, from traditional flavours like jeera and nannari to coconut water, RimZim Rose Sharbat and sports hydration.
At the same time, investments are being directed towards proven categories, selective innovation, and alternative channels like quick commerce, as players balance rising competition and cost pressures with the need to sustain growth and consumer relevance.
“Together with our bottling partners, we ensure our beverages remain widely available across retail, on-the-go outlets and emerging channels at accessible price points. A key part of this readiness is expanding the network of visi-coolers across retail outlets. Innovation continues to shape the portfolio, with introductions such as Powerade in sports hydration and the first-ever ready-to-drink RimZim Rose Sharbat that brings a traditionally home-prepared beverage into a convenient and affordable format for younger consumers,” Sundeep Bajoria, Vice President, Coca-Cola India and Southwest Asia, told BW Businessworld.
Desi Flavours And Smaller Packs
Regional and traditional beverages are seeing a strong resurgence this summer, as companies tap into shifting consumer preferences for familiar, functional and refreshing options. Key players are scaling up production and strengthening distribution to ensure availability during peak demand, even as erratic weather patterns disrupt early-season momentum.
“The Indian beverage market is currently very dynamic… traditional Indian beverages are witnessing strong growth, as many consumers show a preference for familiar, ‘desi’ flavours over Western colas,” said Nikhil Doda, Co-founder and Chief Operating Officer (COO), Lahori Zeera. Doda added that the company has scaled up its bottling capacity from five million bottle per day to 10 million bottles per day. “This expansion is aimed at improving market serviceability, increasing retail reach, and ensuring better availability across shelves,” he added.
In addition to launching novel indigenous flavours, both legacy players and newer entrants are targeting impulse purchases through popular price points such as Rs 10 and Rs 20 bottles. As a result, their market share has increased to an estimated 6 to 7 per cent last fiscal, from around 2 per cent in fiscal 2024, as per a report by Crisil Ratings. Beverage brand Rasna is targeting 18 to 20 per cent growth in India this summer, driven by expanding distribution, a sharper push into ready-to-drink (RTD) beverages through its Jumpin portfolio and rising demand for Rs 2, Rs 5 and Rs 10 price-point packs.
“Our powdered beverages will continue to remain the core engine in the in-home consumption category, while the RTD portfolio is expected to drive faster growth as the juice drinks market is significantly larger,” Piruz Khambatta, Group Chairman, Rasna, told BW Businessworld earlier in an interview.
Khambatta described the approach as a “double-engine strategy”, with Rasna leading in powders and Jumpin targeting the expanding ready-to-drink segment. Companies are also leaning on regional strengths and affordability to drive consumption at scale.
“Demand across our portfolio, especially fruit-based drinks and refreshing traditional formats, is witnessing healthy momentum,” said Megha Shankar, Director, Marketing and Strategy, House of Bindu. She added that the company is focusing on “deepening distribution… and driving higher consumption through affordability and accessibility,” while also exploring low-sugar formats and convenient packaging to cater to evolving, on-the-go consumption trends.
Health, Value and Experimentation
Beyond scale and distribution, the companies are aligning portfolios with evolving consumer preferences around health, functionality and experimentation. The shift is evident in rising demand for low-sugar, natural and functional drinks, alongside growing interest in differentiated and premium offerings that still remain accessible to the mass market.
“The shift today is clearly towards healthier, more mindful consumption… There is increasing demand for low-sugar, natural, and functional beverages, alongside a growing interest in premium and differentiated offerings,” Shankar added.
However, the companies are not leaning on introducing entirely new formats and are focusing more on strengthening what has already proven successful. The players pointed out that they are doubling down on existing portfolio by expanding production capacity, increasing distribution, entering new geographies and deepening penetration in current markets.
“The strategy is to scale proven winners rather than diversify prematurely. The low-calorie segment is expanding rapidly and is no longer confined to premium positioning. Established players are now introducing low-sugar variants at more accessible price points to remain competitive,” Doda explained.
Bajoria added that the expanding Schweppes range of sparkling waters also signals a clear demand for more contemporary choices for the discerning consumer. Khambatta explained that “nearly 50 per cent of Rasna’s products now contain reduced sugar, while 20 to 30 per cent of the portfolio has no sugar, allowing consumers to add sugar as per preference.”
Bottlers Scale Up as Volumes Surge
After subdued sales growth last fiscal, soft drink bottlers are poised to see revenue rebound to their long-term average growth of around 15 per cent this fiscal, driven by hotter and deeper penetration into untapped domestic territories, the Crisil Ratings report pointed out.
Over the past two years, bottlers have significantly ramped up capacity and infrastructure, expanding bottling lines by 30 to 35 per cent while investing in wider distribution and chilling networks. The report noted that this will drive a healthy double-digit volume growth. The higher volume, coupled with 2 to 4 per cent price hike in a competitive environment, will help players revert to their long-term revenue growth trajectory.
“We are fully prepared to meet the demand and have been making strategic investments in our manufacturing footprint, with the most recent state-of-the-art bottling facility in Buxar, Bihar, which is our largest bottling plant in South Asia,” stated Paritosh Ladhani, Managing Director, SLMG Beverages.
Rucha Narkar, Associate Director of Crisil Ratings, added in the report that intensifying competition, leading to reduced pricing flexibility amid rising crude-linked packaging costs (20 to 22 per cent of overall cost), will cause a moderation in profitability this fiscal. However, marginal price hikes and increasing focus on zero-sugar variants may limit the overall impact to 200 to 250 bps, keeping margins healthy at 15 to 16 per cent.
Cash flows will remain healthy for the players, allowing them to continue spending on expanding bottling capacities and increasing visi-coolers at outlets, keeping capex intensity elevated. The capex intensity, which had surged last fiscal owing to acquisitions, will, however, be lower this fiscal, as per the report.
"We undertook targeted initiatives to drive volumes and strengthen our domestic portfolio, including pack upsizing, selective price-point launches in identified markets to onboard new consumers, and new launches in the energy and juice-based drink segments. The facilities commissioned over the last year have stabilised well and are expected to support growth and enhance operating efficiencies going forward,” Ravi Jaipuria, Chairman, Varun Beverages, stated while commenting on the company’s Q4FY26 results on Monday.
A sharp rise in crude prices due to the conflict in West Asia has also driven up packaging costs. These will negatively impact the industry’s profitability by up to 250 bps. However, the impact will be lower for bottlers with nationwide presence, due to their higher pricing power and better economies of scale, Crisil Ratings report added.
While mass-priced packs and desi flavours are driving volumes, investments in capacity, cold chain and last-mile reach are ensuring companies stay competitive in a high-growth yet cost-sensitive market. With health-led innovation, RTD expansion and deeper rural and urban penetration in focus, the season is shaping up well for the companies. |
