Changing habits: Cold beverages in free-flow mode in Indian homes

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Tossing the warnings of the health brigade out of the window, Indians are guzzling soft drinks like never before. A Times of India report quoted a recent Kantar Worldpanel survey to reveal that in-home penetration of soft drinks rose by 47% in May this year compared to a rate of growth of 38% in 2019. Quantity wise it translated to 7 litres in place of 6.5 litres in 2019.

The category of drinks included in this survey were soft drinks, packaged juice, squash and ready-to-dissolve powdered drinks.

Significantly, the rise in consumption was found despite declining demand in this category across large parts of north India this summer due to unseasonal rains that drove down temperature and also adversely impacted sales of AC machines, coolers, fridges etc.

Interestingly, even in the rain-interrupted summer of 2023, penetration this year rose to 37% — a good 8 percentage points higher than 29% that was observed in the period between March and May in 2019.

“Whatever struggle the sector faced in the summers of 2020 and 2021 was wiped out by strong performance in 2022 and a reasonably good 2023. There have been important strides that the category made from a purchase standpoint, with increasing trips and quantity signifying a deepening habit,” said K Ramakrishnan, MD, South Asia, Worldpanel division of Kantar.

Households are not only gulping more soft drinks but also family members are making more trips to the stores to buy them, the survey noted. While families, on average, bought products from this category 5.5 times in 2019, they are doing it 6.5 now, an indication that the habit is taking deep roots.

A significant shift in buying behaviour since 2019 was also corroborated by Nadia Chauhan, joint MD and chief marketing officer of Parle Agro, that emerged as the country’s top FMCG brand in the Brand Footprint survey by Kantar. She said the change has been driven by the pandemic and prompted people to buy bigger packs that can be shared inside the home.

Parle witnessed a surge of 45% in sales of bigger packs compared to 2019 figures. “One of the prominent drivers behind the preference for larger packs is the increasing emphasis on value for money in purchasing decisions. Consumers are now seeking optimal spending and enhanced value, leading them to favour mid-sized packs that cater to various needs while also being budget-conscious,” said Chauhan.

The report also said that the soft drinks category constituted 42% of the volumes of the cold beverage sector (moving annual total in May this year). Before the pandemic the months of March-May constituted 40% of the annual volumes.

Incidentally, squash constitutes 6% of the cold beverages while juices form 5%.

In March-May 2023, the average purchase of cold beverages declined to 3.8 litres from 4.1 litres in the comparable time window in 2022, a phenomenon linked to the unseasonal downpours in large parts of north India. The decline was largely reported from Delhi and Punjab, two of the guzzler states. The southern states kept on gulping the system coolants, said Kantar’s Ramakrishnan.