The fruit-based beverage industry in India is set to register massive growth in the coming years due to several factors driving the market such as fast paced modern lifestyle, an increase in disposable income of consumers, and rising temperature in India. Currently, The Indian packaged fruit juices market is valued at INR 1,200 crore and is expected to grow at a CAGR of 20% in the next 5 years. The fruit-based beverage industry is under constant product innovations as there is growing health consciousness among consumers. Manufacturers are trying to fit their products under the health and wellness category. Continuous innovations are happening to develop a wide range of products with different flavors and tastes with healthy propositions.
1. By Product Type:
The fruit beverages segment is divided into real fruit drinks and synthetic drinks. Real fruit drinks contain natural fruit pulp or juice. Synthetic drinks contain ingredients that are prepared synthetically such as flavoring and coloring materials.
Based on the fruit pulp content, the real fruit drinks are again subdivided into fruit juices, nectars, and fruit drinks. Fruit juices have more than 80% pulp content while nectars contain 20% to 80% pulp. Fruit drinks typically contain less than 20% pulp.
Fruit drinks are the largest selling category with a 60% revenue share of the market. On the other hand, fruit juices acquire about 30% of the market share.
2. By Flavors:
Based on flavors, fruit-based beverages are classified as Mango, Orange, Apple, Mixed fruits, etc. Among These, orange flavors hold the largest market share as they are rich in vitamin C, vitamin A, iron, and calcium.
3. By Packaging type
Based on packaging type, fruit-based beverages are classified as tetra packs, metal cans, plastic, and disposable cups. Beverage industries are coming up with new packaging solutions focusing on sustainability and hence innovations are happening at a rapid pace.
4. By distribution channel:
Supermarkets, convenience stores, specialty food stores, and online retails are the major distribution channels. Growth in the number of retail establishments has made beverages easily accessible to consumers.
- Rising per capita income and improved lifestyle of people are contributing significantly to the growth of the industry.
- The rapid expansion of organized retail establishments such as supermarkets, hypermarkets, and departmental stores are further facilitating the growth.
- The rise in temperature in India plays a vital role in increasing the sales of beverages drastically.
- Online deliveries have made beverages easily accessible. Industry experts have estimated that online sales will make up 20% of overall beverage industry sales by 2027.
- Consumers are preferring health-based beverages over carbonated drinks due to health concerns.
1. Fortified Beverages:
Fruit juices fortified with functional ingredients offer new opportunities to beverage industries to capture health-conscious consumers. Omega-3, probiotic bacteria, bioactive compounds, fiber, and vitamins offer immense product opportunities for fruit-based beverages manufacturers. Vitamin A, vitamin D, vitamin C, and vitamin E are some of the popular vitamin types added to fruit beverages. Governments across the globe are taking initiatives to increase the consumption of fortified food and beverages, particularly in developing countries such as China and India. In a customer-driven industry, manufacturers should capture the latest market trends and develop the products accordingly.
2. Beverages for kids:
The number of children classed as obese is gravely increasing across the globe which has resulted in the development of alternatives to carbonated beverages which are mostly consumed by kids. Industries are now trying to position their beverages to kids through fun packaging, attractive flavors, and parents who are constantly looking for healthy juice alternatives for their kids. Few brands are marketing as 2 shots of the juice being equal to one fruit. Their packaging is designed to fit children’s lunch boxes as it attracts parents looking for convenient and practical ways to make their children’s lunch boxes as nutritional as possible.
3. Demand for Dietary Supplements
The health trend is dominating the beverage market, and as consumers are increasingly searching for healthier alternatives to carbonated drinks, fruit beverages provide flavorsome and convenient options. Industries are battling to grow sales by focusing on product differentiation and developing beverages that have health benefits by adding extra vitamins and minerals to their offerings.
4. Beauty Support Drinks:
A new trend of beauty support drinks is growing leaps and bounds as consumers are showing desire not just to have a healthy body but also to look great. As a result, new products containing high vitamins and polyphenols are being launched. The Japanese market is the pioneer of these niche products development. Industries are attracting beauty conscious consumers to the beverages market by developing products that focus on enhancing the healthy appearance of hair, skin, and nails.
5. Meal Replacement Fruit-Based Shakes:
Due to the fast-paced modern lifestyle, consumers are opting for meal replacement shakes. They act as an alternative for whole food meals with controlled quantities of nutrients such as proteins, fibers, vitamins, etc. These replacement shakes are offered in a variety of flavors such as strawberry, orange, banana, peach, avocado, etc. The busy lifestyle of consumers has been considered the prominent market driver. However, high pricing has restricted its market growth.
6. Exotic Fruit Flavors and Cocktails:
Rapid globalization has increased the trade of exotic fruits over the past few years. Different varieties of exotic fruits are easily accessible which has made it easy for beverage industries to develop exotic fruit flavored beverages. Recently dragon fruit, avocado and cherry-based beverages have grabbed the attention of consumers as they sought new and novel experiences. There is also a trend of Ready-To-Drink (RTD) cocktails leaning on fruit profiles.
Lychee cocktails are trending as they are categorized as premium. There is a surge in demand for lychee, grape, guava, and watermelon cocktails.
7. Sustainable Packaging
With environmental concerns at the forefront, there is a rise in demand for ecological packaging solutions. Additionally, the ban on single-use plastic by the Indian government has further encouraged the usage of sustainable packaging materials. Polyethylene terephthalate (PET) is gaining more attention as it is the easiest plastic to recycle.
PCR plastics reduce the number of single-use plastics in landfills as these plastics are recycled from once-existing plastic bottles. Recycling these materials into other packaging materials will drastically reduce the requirement for pure virgin plastic beverage containers. Tetra Packs, glass, and aluminum cans are the other options for beverage industries to reduce plastic usage. Tetra packs are lighter to transport and also take much less energy to make compared to other forms of packaging, making them climate friendly. Glass bottles can be recycled as many times as possible if properly preserved and recycled. But glass bottles are heavy to transport and require more energy to make. Hence industries are looking at using thinner glass bottles. Aluminum cans can be infinitely recycled and also lighter than glass. In conclusion, glass bottles and aluminum cans are better compared to tetra packs in terms of plastic pollution. On the other hand, tetra packs are better in terms of climate change.
8. Consumers are ready to spend more on premium products:
An increase in buying power of consumers has resulted in growth in sales of sophisticated drinks. Hence beverage industries are developing products by targeting fruit juice connoisseurs. Also, there is a new trend of ’boutique’ juices brands that specialize in supplying premium juices to upmarket retailers and luxury restaurants.
Impact of COVID-19:
The spread of the COVID-19 pandemic has created a positive impact on fruit-based beverages as there was a rise in consumption of immunity boosting products such as fruit-based beverages. The pandemic has restructured the consumer’s buying preferences and its influence is expected to remain for the long term. Despite the pandemic, In 2021 the global fruit juice market reached a value of USD 139 billion.
However, due to COVID-19 disturbance in supply chains hampered the growth of the industry as it had a severe impact on raw ingredients sourcing, processing, packaging, and distribution. The strict lockdown imposition affected the distribution and production of beverages.
Challenges and solutions:
Traditionally, Indians love to have fruits directly rather than having them in the form of juices. Additionally, people have the habit of purchasing fresh fruit juices sold at juice stalls. Another major challenge is that carbonated drinks have captured a larger market share, particularly Coca-Cola and Pepsi. As there is rising health awareness among consumers, demand for carbonated drinks is decreasing. This allows fruit-based beverages manufacturers to capture a huge market share. By offering a wide range of products with unique tastes and flavors with healthy propositions, fruit-based beverages can give tough competition to fresh fruit juices available at local juice stalls. Leading players are launching new flavors regularly, to show their presence in the market.
The fruit-based beverage industry is growing leaps and bounds due to changing lifestyles and increasing per capita income of consumers. As the packaged juice market in India is still evolving, there is a huge opportunity for new entrepreneurs to enter the market and grow as a leader. SolutionBuggy having more than 1,500 food and beverage consultants assist you in taking the first step into unknown markets with ease. Being a leader in the food and beverage industry, SolutionBuggy helps you in choosing the right strategies to accelerate your industry growth. If you are looking to start and scale up your beverage industry, get guidance from India’s top food and beverage consultants.