REPORT ON INDIAN BEVERAGE INDUSTRY1. Beverage Overview------------------------------------------------------32. Indian Beverage Industry--------------------------------------------------------------------------------------------------------------------------43. Share of Volume by Beverage Category of India-------------------------------------------------------------------------------------------------74. Per Capita Consumption In India------------------------------------------------------------------------------------------------------------------85. Key Figures on Indian Beverage Industry---------------------------------------------------------------------------------------------------------96. Factors driving developments in the Indian Beverages Sector----------------------------------------------------------------------------------107. Packaging of Beverage Industry-------------------------------------------------------------------------------------------------------------------118. Beverages for ‘Health and Wellness’ in the Indian Market------------129. The beverage industry’s response towards Health andWellness------1210. Barriers to taking ‘functional’ beveragesmainstream------------------1311. Converting Barriers into the Opportunities-----------------------------1412. Indian Beverage MarketPerspectives-----------------------------------1513. Indian Beverage Distribution & Marketing Network--------------------1514. Issues Related to Indian Beverage Market-----------------------------1615. SWOT Analysis Of Indian Beverage Industry---------------------------1816. The Leading Beverage Companies And Their Competitive Brands----19Coca Cola Company-----------------------------------------------202TABLE OF CONTENTSPepsiCOIndia------------------------------------------------------23

UBGroup-----------------------------------------------------------28Dabur India Limited-----------------------------------------------30Red Bull------------------------------------------------------------32Café Coffee Day---------------------------------------------------34Nestle India--------------------------------------------------------35Tata Global Beverages Ltd----------------------------------------3717. Major Markets Under Indian BeverageIndsutry------------------------40Indian Non-Alcoholic BeverageMarket---------------------------41Indian Soft Drink Market------------------------------------------43Indian Tea Market-------------------------------------------------45Indian Alcoholic Beverage Market--------------------------------47Indian Beer Market------------------------------------------------49Indian WineMarket------------------------------------------------5218. Key risks to the beverageindustry--------------------------------------5419. Future Projections Of Indian BeverageIndustry------------------------553BeverageNon-Alcoholic Beverages Alcoholic BeveragesNon-carbonated Carbonated Fruit Based GrainFruit Juices,Coffee,Tea,PackagedWaterColas,Soda,Tonic WaterWine,BrandyBeer,WhiskyA beverage is a drink specifically prepared for human consumption.Beverages almost always largely consist of water. Drinks often

consumed include: Water (both flat or carbonated),Juice baseddrinks, Soft drinks, Sports and Energy drinks,Alcoholic beverages likebeer or spirits ,Coffee, tea ,Dairy products like milk. Commonly,drinks are filled into containers, like glass or plastic bottles, steel oraluminum cans as well as cardboard supported packages, like the"TetraPak" or others. Filling of beverages can be done cold, hot, ambient and coldasepticfilling to mention the latest trend of beverage marketing and technology.The beverage is mainly categorized into two major categories based upon thealcoholic and nonalcoholic nature of the drink. Non-Alcoholic beverages are further otwo types based upon carbon content. These beverages contain Fruit juices, Coffee,Tea, Soda, Colas. The Alcoholic beverages are based upon the fruit content and grain.It may be Wine, Brandy, Whisky or Beer.Beverage Overview4India has a population of more than 1.150 Billions which is just behind China.According to the estimates, by 2030 India population will be around 1.450 Billion andwill surpass China to become the World largest in terms of population. BeverageIndustry which is directly related to the population is expected to maintain a robustgrowth rate. The price stability throughout the year has contributed to the increase indomestic liquor sales.The Indian beverage market offers hot options.According to Dabur, the fruit beverages industry in India now stands at Rs 1100crores (approx. Euro 180 million) and the market has grown at the rate of 30%where Dabur India, through the new launch Real Burrst, is looking at establishing amarket share of 4-5% in next 2-3 years.Part of the industry of fast moving consumer goods is also the beverage industry. Thetotal beverage industry in India is being estimated to grow at 17% this year,according to experts. "Food and beverages segment has not suffered despite theslowdown in the economy. FMCG in our stores has done very well. In fact, weregistered 10-15% growth in this segment last year," said a spokesperson atSpencer's Retail Ltd.Beverage majors like Coca Cola India, for example, again reported growing

sales.Coca-Cola in India reported a solid first quarter 2009 results not only despite achallenging economic environment, but also with unit case volume increasing by31%. And eight quarters out of the 11 quarters had a double-digit growth.To foreign observers of the market, these figures might sound unbelievable, asWestern markets are saturated and have not seen such figures for long time. But inIndia, various positive factors drive the beverage markets. One is the rising numberof people in the middle class with extra money to spend on new beverages like wine,new brands of imported whiskey, or the fancy energy drinks, some of which are reallygood to enable people to work longer, to listen longer during conferences, and evento party longer and have fun. Leader in this segment is Red Bull, but some othergood and very effective drinks – one even very healthy - are already or soon enteringthe market.Another factor is the sheer size of the number of people in India. Even the ruralhouseholds, as long as the monsoon is good, get purchasing power and canparticipate in consumer markets. Where ever the purchasing power is still not bigIndian Beverage Industry5enough, companies offer smaller packs for Rs. 10 or Rs. 5, especially to be seen inthe snack market. Hot summers in India also help a bit to sell beverages.The large untapped market potential for store-bought non-alcoholic beverages, inparticular carbonated beverages, juice based drinks and energy or sports drinksamong urban/suburban consumers in India.Approximately 120 billion litres of beverages are consumed by Indians every year,but only 5% represent store-bought packaged beverages. The majority of Indianconsumers (75%) still consume non-alcoholic store-bought beverages ‘less than oncea day’, highlighting a large untapped market opportunity, particularly in thecarbonated drinks and juice or juice-based categories (estimated to be worth $1.5

Billion and $.25 billion respectively). In order to increase consumption andpenetration of such beverages manufacturers will have to address the two primaryreasons why some Indians abstain entirely, that is, health concerns and undesirabletaste.The study investigates consumption frequency and habits, the importance of variousproduct attributes, and brand preferences across age, household income, city in Indiaand beverage category. This study has implications for manufacturers, distributors,retailers and investors hoping to capitalize on the growth of these beveragecategories in India and distinguish themselves in the increasingly crowdedmarketplace.India is a booming market for the beverage industry as well. It already accounts forabout ten per cent of global beverage consumption today. This means that thecountry has the third-largest beverage consumption after the USA and China. Butthat is not the end of the road. Market analyses indicate that beverage sales in Indiawill be increasing by more than 60 per cent between 2008 and 2012. Since India is(still) a country of tea and coffee drinkers, packaged cold drinks have enormouspotential. Packaged water, beer, spirits and carbonated drinks are recording whatrates are in some cases high double-digit growth. All in all, annual per capitaconsumption of packaged beverages is supposed to triple from 2.6 litres in 2000 to8.7 litres in 2012.Demand for milk and milk-based beverages are also rising. India is the world’sbiggest producer and consumer of milk, since milk plays a major role in the Indiandiet. The consumption of milk and milk-based beverages has increased by an annualaverage of 2.7 per cent in the last four years and most of them (65 per cent) are sold“loose” / unpackaged. The proportion of the market accounted for by packaged milk6and dairy products are increasing, however. In the past four years, for example,

demand for milk filled in pouches has grown by 4.5 per cent annually, while the figure for milk in cartons is about 25 per cent. The rising consumption is making itnecessary for appropriate investments to be made by the beverage industry.The sector is highly fragmented and 95 per cent of these producers have small orvery small operations. Of this, the health beverage industry is valued at $230 million.The Indian beverage industry faces over supply in segments like coffee and tea.However, more than half of this is available in unpacked or loose form. Indian hotbeverage market is a tea dominant market. Consumers in different parts of thecountry have heterogeneous tastes. Dust tea is popular in southern India, while loosetea in preferred in western India. The urban-rural split of the tea market was 51:49 in2000. Coffee is consumed largely in the southern states. The size of the totalpackaged coffee market is 19,600 tonnes or $87 million.The total soft drink (carbonated beverages and juices) market is estimated at 284million crates a year or $1 billion. The market is highly seasonal in nature withconsumption varying from 25 million crates per month during peak season to 15million during offseason. The market is predominantly urban with 25 per centcontribution from rural areas. Coca cola and Pepsi dominate the Indian soft drinksmarket. Mineral water market in India is a 65 million crates ($50 million) industry. Onan average, the monthly consumption is estimated at 4.9 million crates, whichincreases to 5.2 million during peak season.70.00%2.00%4.00%6.00%8.00%10.00%12.00%Share%2002 2003 2004 2005 2006 2007

YearsMilkTeaBottled WaterCoffeeDistilled SpiritsCarbonated SoftDrinksBeerFruit BeveragesWine

Share of Volume by Beverage Category of India8INDIAN BEVERAGE MARKETSHARE OF VOLUME BY CATEGORYSegment 2002 2003 2004 2005 2006 2007Milk 10.3% 10.4% 10.5% 10.6% 10.8% 11.1%Tea 6.3% 6.4% 6.5% 6.6% 6.4% 6.5%BottledWater0.2% 0.2% 0.3% 0.4% 0.4% 0.4%Coffee 0.2% 0.2% 0.2% 0.2% 0.2% 0.2%DistilledSpirits0.1% 0.1% 0.1% 0.1% 0.1% 0.2%CarbonatedSoft Drinks0.2% 0.2% 0.2% 0.1% 0.2% 0.2%Beer 0.1% 0.1% 0.1% 0.1% 0.1% 0.1%FruitBeverages0.0% 0.0% 0.0% 0.0% 0.0% 0.0%Wine -- 0.0% 0.0% 0.0% 0.0% 0.0%Subtotal 17.3% 17.6% 17.8% 18.1% 18.2% 18.7%All Others* 82.7% 82.4% 82.2% 81.9% 81.8% 81.3%TOTAL 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%Source: Beverage Marketing CorporationPER CAPITA CONSUMPTION IN INDIA9 Indian Beverage Market CAGR[2007-2010]:21% India ranked 3rd in largest beverage consumption after the USA and China Total Indian Beverage Consumption every year:120 billion liters Fruit Beverages Market size: Rs 1100 crores (approx. Euro 180 million) Fruit Beverage market growth rate: 30% Majority of Indian consumers:75% consume Non-alcoholic beverages and 25%Alcoholic Beverages

Carbonated Drinks Market size: $1.5 Billion Juice or juice-based Drinks Market size: $.25 billion Health beverage industry is valued at $230 million Indian Beer Market Growth Rate: 7 - 8 % Indian Beverage Industry is 10% of Global beverage consumption today. Milk-based beverages consumption has increased by an annual average of 2.7per cent in the last four years Total packaged coffee market size: 19,600 tonnes or $87 million. The Indian soft drink market is worth Rs. 21,600 million a year with a growth ofaround 7%. The total soft drink (carbonated beverages and juices) market is estimated at284 million crates a year or $1 billion. Peak season soft drink consumption : 25 million Off-season soft drink consumption: 15 million The market is predominantly urban with 25 per cent contribution from ruralareas. Coca cola and Pepsi dominate the Indian soft drinks market. Indian Mineral water market size : 50 million industry.Key Figures on Indian Beverage Industry10India is a growing and developing country which is having a very high economicgrowth with the drastic increase into the population size. Due to the developingeconomic condition, there is increase in the competition among the manufacturers,retailers, dealers to promote their products at competitive prices.The increase in the India population has given a high demand of beverage marketproducts. The Indian beverage market is segmented into the two major segments –Alcoholic and Non-Alcoholic Beverages.Again these categories of beverages are sub-divided into the carbonated and fruitbased drinks. Tea and Coffee also contributed majorly into the Beverage Industry.Indian Beverage market distribution and marketing channel is highly networked andhas a very approach to the customers. Due to the globalization and technologicaldevelopments there is highly innovative products are coming into the IndianBeverage markets which are appreciated by the Indian population.

In India, here are various forms of beverage market get to be seem in the form ofretailers, Restaurants, Coffee shops, Sport events, Hotels etc.There are certain factors which are driving developments into the IndianBeverage sector:Economic growthFactors driving developments in the Indian Beverages Sector11Population growthCompetition for Raw materialsPower of retailersGlobalization / RegionalizationResearch & DevelopmentTechnological DevelopmentsFood safety and regulationConsumer Demands and trendsThe beverage industry is one among the front-liners where massive investments arebeing made for expansion and technological up gradation. The packaging ofbeverages both carbonated and non-carbonated, is a complex technological branch inthe Food Processing /Packaging industry. The traditional returnable glass bottle hasgiven way to newer plastic containers as well as cartons. The current trend is toimprove the conventional containers, extend their share in the large market, extendthe shelf-life of the products, provide greater consumer convenience and ultimately toproduce economic packages. The changing Indian scenario, with implementation ofvarious technologies and market promotion activities, has changed the scope for thisindustry exponentially.The Indian soft drink market is worth Rs. 21,600 million a year with a growth ofaround 7%. The soft drinks segment had grown to Rs. 1,05,000 million in the year2005. The production of soft drinks has increased from 6230 million bottles in 1999-2000 to 6560 million bottles during the year 2001-2002.The alcoholic beverages industry, covers Indian Made Foreign Liquors (IMFL), country

liquor and beer. IMFL includes Carbonated Beverages in PET Bottles wine, whisky,gin, rum, brandy and other white spirits. IMFL industry in India is roughly valued atRs. 28,000 crores, growing at a rate of 9-10% per annum in volume terms. TheIndian beer market estimated currently at Rs. 7,500 million a year has been growingat the rate of 15% per annum.PACKAGING OF BEVERAGES12The packaging requirements for all types of beverages are:• Absolutely leak-proof and prevent contamination• Protect the contents against chemical deterioration• No pick up of external flavours• Be hygienic and safe• Retain carbonation in the case of carbonated beverages• Economical, easy to use and dispose• Good aesthetic appearanceThe global health and wellness trends in the beverage sector are beginning to noticean increasing level of activity in India. Economic drivers: With strong economic drivers of consumer spending, Indiais a very different market from that of the 1980s or 1990s.With a GDP ofUSD800 billion and a GDP growth rate in 2005-06 of over 8 percent, India isnow the third largest economy in Asia. And this has not been the result of somefreak surge in growth. Average GDP growth of the last 10 years has been 6.5percent per annum. And most significantly, the stepping up of GDP growth isdriven primarily by domestic demand rather than exports. Demographic drivers: Macro economic factors tell only one part of the story.There are compelling demographic trends in the country that promise new andsustained opportunities for beverage product suppliers who can read right thesignals.The country boasts an expanding middle class that is currently 350 million strong (apopulation larger than the total population of the United States or the EuropeanUnion). Increased urbanization and rising disposable incomes are creating new andlarge target markets for beverage products that go beyond commodity status and

Beverages for ‘Health and Wellness’ in the Indian Market13command higher prices. The rapid growth in the retail sector (over 20 percent perannum) is just one confirmation of the increasing buying power of this middle class.There is today a growing health and wellness consciousness among consumers andan increasing importance given to fitness and healthy lifestyle choices. Changingwork and lifestyle habits leave less time for home cooking and therefore spur demandfor convenience and ‘complete nutrition’ from meal replacements. There is a greaterinclination to ‘self-care’ rather than ‘medicate’, a greater awareness of the ‘functional’benefits of health beverages and a greater willingness to pay a premium for suchbeverages.With these strong drivers of growth, it is not surprising that the beverage industry inIndia has begun to respond with products that are marketed clearly on a health andwellness platform.However, to set the record straight, ‘health and wellness’ is not a wholly newplatform for the Indian market. India has, for decades, had a thriving health fooddrinks market. Market leader, GlaxoSmithKline Consumer Healthcare (GSKCH),has had iconic brands ‘Horlicks’, ‘Boost’, ‘Viva’ and ‘Maltova’ create 'top-of-the-mind'recall across generations of Indians. Other suppliers, Cadbury (with ‘Bournvita’),Nestle (with ‘Milo’), Heinz (with ‘Complan’) and Gujarat Co-operative Milk MarketingFederation (GCMMF) (with ‘Nutramul’ and now ‘Amul Shakti’) also enjoy a loyalfollowing. In the non-carbonated beverages sector, Parle Agro's ‘Frooti’ remains thelargest brand in the fruit drink segment, while Dabur's ‘Real Fruit Juice’ leads thejuice segment.The fact is that there has all along been a strong multinational presence in beveragemarket and more recently this has been witnessing the emergence of Indian‘multinationals’ across this sector.

However, much of the marketing for health food drinks in the past has been generalhealth and energy positioning, rather than the focus on specific benefits oringredients that is characteristic of most mature health food markets. This is nowchanging and the specific initiatives of some companies are going a long way tocreating a truly dynamic health and wellness beverage sector in India.Global market leader in Probiotic fermented milk drinks, Yakult, has teamed upwith Danone to start manufacturing its probiotic fermented milk drink in India from2007. Calcium-fortified beverages are a rapidly growing market.The beverage industry’s response towards Health and Wellness14Some examples of brands that have introduced calcium-fortified products are ‘AmulShakti’, Coca-Cola India’s ‘Mazza’, and malted drinks such as ‘Horlicks’ (GSKCH),‘Milo’ (Nestle), ‘Complan’ (Heinz), ‘Anlene’ (Britannia New Zealand Foods) and‘Protinex’ (EAC Nutrition). GCMMF launched sports drink 'Stamina' in early 2006.‘Red Bull’ was launched in India in 2003.Carbonated beverage giants Coke and Pepsi have also planned to widen their productportfolio with ‘health-based’ beverages (non-carbonated). Pepsi’s ‘Gatorade’ isalready on the market. And in what must be among the most significant recentcommercialization efforts of a traditional Indian drink, ‘Amul Masti’ SpicedButtermilk was launched (in a 200 ml tetra pack), marketed on the platform of beingfree of colour, preservatives, acids and sucrose sugar.Despite this flurry of activity, the market is still plagued by low levels of awarenessand a lack of sophistication in consumer choices. Price remains a stumbling block.Public concerns over safety and quality of beverages have been aggravated byresearch findings (and the subsequent controversy) over alarming levels of pesticideresidues in bottled water and soft drinks. Skepticism from the scientific community

continues to limit product endorsement. Furthermore, there is a lack of detail andclarity in food safety regulation regarding nutraceuticals and functional beverages,and regarding health claims.Within the beverage industry there is inadequate understanding of how to taketraditional ingredients into the modern food processing environment. And then ofcourse, there is competition from other products such as dietary supplements.Finally, the retail sector, despite its growth, is still mostly unorganized and this limitsthe ability to differentiate health and wellness products through the allocation ofexclusive shelf space devoted to this category.To overcome these challenges, beverage suppliers need to approach the market witha multi-pronged strategy for increasing penetration. It can be given as follow: Price resistance can, to some extent, be overcome by moving from ‘imported’to manufactured in India’ products. For example, imported ‘Gatorade’ costINR45 per 200 ml bottle. Now, made in India, it costs INR25.Barriers to taking ‘functional’ beverages mainstreamConverting Barriers into the Opportunities15 Substitution or modification is in some ways easier to execute than addition.(Examples of substitution would be herbal tea replacing regular tea or soy milkreplacing regular cow’s milk. Examples of modification would be ‘low-fat’, ‘nofat’,‘lite’ variants of established beverage brands). The growing trend towards on-the-go consumption/out-of-home consumption(at the workplace, in schools, colleges and gyms) presents suppliers with newplace and form of consumption options (for example, vending machines fordispensing health drinks at schools). Abandoning the ‘one-size-fits-all’ positioning and generic selling points of thepast, in favour of targeted and specific messaging based on validated healthbenefits is likely to be more effective to the better informed middle class today. Leveraging the intrinsic appeal of traditional Indian ingredients such as

ayurvedic, herbal or oleoresin ingredients, but delivered in a modern, safe,convenient and consistent form, or packaging and branding traditional Indianhealth drinks such as buttermilk and lassi, could create whole new markets thatderive their strength from known and trusted traditional ingredients or drinks. In the end, beverage suppliers who unlearn many of the long-heldmisconceptions about Indian consumers and respond instead to their changingneeds and priorities will be best placed to maximize the health and wellnessopportunity in this large andgrowing market.With the overwhelming successes of the Green and White Revolutions, India is nowfervently poised for the beverage revolution. The entry of multinationals, aggressiverise of commodity branding and low cost of technology is changing the economics ofthe Indian food & beverage industry. The rise of aggressive regional players makingforays into categories where entry barriers are low and a boom in Indian beveragemarkets and the rising need for these products are the key reasons for this growth inbeverage business.The soft drinks perspectives the demand is quite high in the category of carbonateddrinks. The market demand of beer, whisky is also quite high in the upper middlesegment at restaurant and Hotels.The trend of white spirits like Vodka, Bacardi Rum also preferred over other drinks.These drinks are said to hurt less than Indian whiskey, as unlike most Indian whisky,Indian Beverage Market PerspectivesIndian Beverage Distribution & Marketing Network16these white spirits are not made out of molasses.When it comes to Energy drinks, the taste of energy drinks are not liked by many ofpeople, as for some, these taste like cough syrup. And they are also highly priced.But there are also people who like to mix it, for example many like Vodka mixes ofVodka with Red Bull.

Social IssuesFor the alcohol industry the social concerns are numerous, ranging from associateddisease as well as health and safety impacts from high levels of alcohol consumption,to under-age drinking, and in developing country contexts the portion of spending onalcohol versus basic needs. Domestic violence and an exacerbation of poverty haveIssues Related to Indian Beverage Market17made alcohol abuse the single most important problem for women in India. Thereport points out that as prosperity levels increase across Asia, we can expect to seeincreasing levels of alcohol consumption. This presents both an opportunity for listedcompanies in Asia, but given the potential negative social impacts, it also presentssignificant challenges.Soft drink companies are advised to anticipate government regulations, particularlyin relation to their marketing approaches to children. Companies need to beinnovative in creating healthier soft drink products as in the case of PepsiCo and CocaCola focusing on a low sugar, natural sweetner for their products and Vietnamese andChinese brands tapping into the demand for alternatives to carbonated soft drinks.Companies should assess their supply chain risks and put in place codes of conduct,monitoring and capacity building initiatives to prevent these. As consumers becomemore aware of supply chain issues, good supply chain management can create acompetitive advantage.Companies that rely on agricultural supply chains, particularly large numbers of smallholding farmers, should look to developing partnerships with government, local NGOsand international agencies to better manage social risks. Governance IssuesA typical challenge in the Indian beverage sector’s fight against corruption is thecomplex interrelationship between politics and the private sector. Strong governance

is clearly vital for companies to ensure the integrity of their organizations,relationships with consumers and government authorities to avoid corrupt businesspractices.Companies should look to providing more transparency and accountability in terms ofthe selection of board members, remuneration, links between remuneration andperformance, diversity of the board and decision making processes. Alcoholcompanies should ensure a high level of transparency in terms of the financialsupport provided for industry groups that in turn lobby national governments forchanges in alcohol policiesCompanies should put in place initiatives and get involved in collective action to raisecorporate integrity, especially in relation to corruption and bribery. Environmental Issues18Companies need to first assess to what extent they and their suppliers depend onwater and the associated risks. This should be done in consultation with keystakeholders.Companies should measure their water footprint and look to how they can bestmanage water resources through enhanced processes and infrastructure. Companiesshould implement rigorous water testing and monitoring systems and install treatingequipment. Water pollution and treatment is already a focus of Asian listedcompanies and with the growing emphasis on regulation and enforcement this looksset to increase.Companies need to realize that global commitments to improve water efficiency canonly be implemented locally, requiring versatility and local management support.Companies should disclose water performance and the initiatives that they areputting in place. Companies need to assess their contribution to climate change, putin place measures to reduce emissions and waste and report on progress.19 STRENGTHRenewal and investmentInnovation and Technological development

Experience in searching for new markets, niches and partnersAvailability of key raw materials, cheaper labour costs and presence across theentire value chain gives India a competitive advantage. WEAKNESSOld technologies and poor work organizationInsufficient pace of creation and implementation of innovationsInsufficiently effective activities of small and medium-sized businessesChange in household consumption patterns OPPORTUNITIESPresence of a favorable marketMarket globalizationForeign direct investment promoting knowledge and developing export channelsTransfer of production to the countries with smaller labour costsWell established distribution network THREATSUnfavorable market trends in energy resourcesIncreasing competition among exporters and decreasing dependency on onemarketIntense competition between the organized and unorganized segments and lowoperational cost.Water scarcity in IndiaImplementation of Goods and Service tax by 2011SWOT Analysis Of Indian Beverage Industry20There are so many large companies present in India who are leading players in theIndian Beverages Industry. The companies are having large annual turnovers withwide range of product portfolios which include all kinds of beverage drinks from sodato energy drinks. These companies are having a large variety of products like soda,water, Colas, Fruit based drinks, Lemon based drinks, Milk beverages, and Fruitbased wine, beer, Whisky, Coffee, and Tea etc. with so many health and energydrinks portfolio.These companies have a strong distribution and marketing channel which supply thebeverages products to customers through retailers, Coffee shops, Restaurant,

Hypermarket and Supermarkets. The segment is highly distributed all over thecountry through a long chain of retailers and suppliers who are providing veryefficient service to the company.The leading Indian Beverage sector players are as follows:1. Coca-Cola Company2. PepsiCo3. UB Group4. Dabur India Ltd5. TATA Global Beverages Ltd [TATA Tea]6. Nestlé India7. Café Coffee Day8. Red Bull India Pvt LtdThe Leading Beverage Companies And Their Competitive Brands21 Company OverviewEstablished in 1886, Coca-Cola is the world’s most ubiquitous brand. The companyand its subsidiaries are present in over 200 countries employing over 49,000individuals and generating revenues to the tune of US$ 21 billion. The Coca-ColaCompany markets four of the world’s top-five soft drink brands; its beverageproducts encompass nearly 400 brands, including non-carbonated beverages such aswaters, juices, sports drinks, teas and coffees. The company’s net income registereda CAGR of 7.2 per cent over a 10-year period. Till date, Coca-Cola has invested overUS$ 1 billion in India and employs over 5,000 people. The Coca- Cola system in Indiacomprises 25 wholly owned Bottling operations and another 35 franchisee-ownedbottling operations. A network of 27 contract-packers also manufactures a range ofproducts for the company. Latest UpdateCoca-Cola net revenue up 5%,July 2010India sales jump 22%,July 2010Net revenue of $8.26 billion July,2010 Business in IndiaCoca-Cola is a leading player in the Indian beverage market with a 60 per cent share

in the carbonated soft drinks segment, 36 per cent share in fruit drinks segment and33 per cent share in the packaged water segment.Coca Cola Company22

0102030405060Share%CarbonatedSoft drinksFruit Drinks PackagedDrinkingWaterDrinks Segment

Coca Cola Business In IndiaShare% Outsourcing distribution and manufacturingCoca-Cola India minimized its capital needs by meeting new manufacturing capacityneeds through external co-packers, outsourcing its distribution and meeting its inmarket-refrigeration and cooling needs by giving incentives to retailers to self-fundthe same through its “Own Your Fridge Scheme.” Today, the company has anextensive rural and urban distribution network. Coca-Cola adopts a hub and spokeformat distribution network ensuring that large loads travel longer distances andshort loads travel short distances. The company has increased its village penetrationfrom 9 per cent in 2000 to 28 per cent in 2004 and covers approximately 175,000villages today. Rural India now accounts for 30 per cent of Coca-Cola’s sales volumes. Factors for successCoca-Cola has succeeded in spite of an extremely price-sensitive consumer with

entrenched beverage consumption habits – tea, nimbu-paani (lemonade) and afragmented and geographically dispersed retail market, and a high tax environment. Diverse product portfolioIn keeping with its goal of emerging as the single largest entity in the beveragemarket, Coca-Cola has a presence in multiple segments.• Carbonated soft drinks (Coke, Diet Coke, Fanta, Thums Up, Sprite and Limca)Fruit juice based drinks (Maaza)Powdered soft drinks (Sunfill)Coffee and tea (Georgia)23Bottled water (Kinley) and Bottled soda (Kinley Soda)The company leverages this comprehensive portfolio, which includes a mix of itsglobal brands as well as the locally acquired brands like Thums Up, Limca andMaaza• It sells these beverages in multiple volumes of 200 ml, 300ml, 500ml, 1.5 lbottles, tetra packs as well as through vendors (fountain machines)• Explores new markets with the introduction of new drinks (Georgia,coffee and tea segment) and flavours (Vanilla Coke) BrandsCoca –ColaThe worlds favorite drink. The world’s most valuable brand. The mostrecognizable word across the world after OK. Coca –Cola has a trulyremarkable heritage.from a humble beginning in 1886,it is now the flagship brand ofthe largest manufacturer, marketer and distributor of non- alcoholic beverages in theworld.Availabilty:GLASS PET CAN FOUNTAIN200ml,300ml,500ml,1000ml 500ml,1.5l,2l,2.25l,500ml+100ml 330ml VarioussizesThumps upIt is a leading sparkling soft drink and most trusted brand in India. Originallyintroduced in 1977, Thums up was acquired by the Coca Cola Company in 1993.Thisbrand known for its strong, fizzy taste and its confident, mature and uniquelymasculine attitude.SPRITESprite is global leader in the lemon line category, is the largest parklingbeverage brand in India. Launched in 1999,Sprite with its cut thru

perspective has managed to be a true teen icon.GLASS PET CAN FOUNTAIN200ml,300ml,500ml,1000ml 500ml,1.5l,2l,2.25l,500ml+100ml 330ml VariousGLASS PET CAN FOUNTAIN200ml,300ml 500ml,600ml,1250ml,1500ml,2000ml,2250ml 330ml Varioussizes24sizesFANTAFanta has entered in Indian market in the year 1993.Fanta stands for itsvibrant color,tempting taste and tingling bubbles.GLASS PET CAN FOUNTAIN200ml,300ml 500ml,1.5 L, 2L,2.25L,500+100 ml330ml Various sizesLIMCABorn in 1971,Limca has remained unchallenged as the No. 1 sparkiling Drinkin the cloudy lemon segment.The main point in the brand is the “Freshness”.GLASS PET CAN FOUNTAIN200ml,300ml 500ml,1.5 L, 2L,2.25L,500+100 ml330ml Various sizesPULPY ORANGEThe company developed a process that eliminated 80 % of the water inorange juice.forming a frozen concentrate that when reconsititutedcreated orange juice.Available in 400 ml,1 L and 1.25 L and also in PET pack size.MAAZAMango.It is a fruit associated with good times like no other.Apy called theking o fruits.PET 1.2 L PET 600 ml 200mlRGB.250mlRGB250mlPETPocket200mlRs.45 RS.25 Rs.8 Rs.10 Rs.15 Rs.15KINLEYKinley water understands the importance and value of the life givingfore.Kinley water comes with the assurance of safety from the Coca-ColaCompany. Coca-Cola introduced Kinley with reverse osmosis along withlatest technology.

Available in 500ml,100ml in PET.25GEORGIA GOLDIntroduced in 2004,the Georgia gold of tea and coffee beverage is perfectsolution for the office and restaurant needs!It is available at quick servicerestaurant, Cinemas, Airports and in Coporates across all major matros inIndia.Hot Bevarges : Espresso, Americano, Cappucino, Caffe Latte,Machaccino , Hot chocolate, Cardamom TeaCold Bevarages: Iced Teas,Cold Coffee Company OverviewPepsiCo entered India in 1989 and has grown to become one of the country’s leadingfood and beverage companies. One of the largest multinational investors in thecountry, PepsiCo has established a business which aims to serve the long termdynamic needs of consumers in India. PepsiCo nourishes consumers with a range ofproducts from treats to healthy eats that deliver joy as well as nutrition and always,good taste.PepsiCo India’s expansive portfolio includes iconic refreshment beverages Pepsi, 7UP, Mirinda and Mountain Dew, in addition to low calorie options such as Diet Pepsi,hydrating and nutritional beverages such as Aquafina drinking water, isotonic sportsdrinks - Gatorade, Tropicana 100% fruit juices, and juice based drinks – TropicanaNectars, Tropicana Twister and Slice, non-carbonated beverage and a new innovationPepsiCO India26Nimbooz by 7Up. Local brands – Lehar Evervess Soda, Dukes Lemonade and Mangolaadd to the diverse range of brands.The group has built an expansive beverage and foods business. To support itsoperations, PepsiCo has 36 bottling plants in India, of which 13 are company ownedand 23 are franchisee owned. In addition to this, PepsiCo’s Frito Lay foods divisionhas 3 state-of-the-art plants. PepsiCo’s business is based on its sustainability vision

of making tomorrow better than today. PepsiCo’s commitment to living by this visionevery day is visible in its contribution to the country, consumers and farmers. BrandsFoodsPepsiCo’s food division, Frito-Lay, is the leader in thebranded salty snack market and all Frito Lay productsare free of trans-fat and MSG. It manufactures Lay’sPotato Chips, Cheetos extruded snacks, Uncle Chippsand traditional snacks under the Kurkure and Leharbrands. The company’s high fibre breakfast cereal,Quaker Oats, and low fat and roasted snack optionsenhance the healthful choices available to consumers. Frito Lay’s core products,Lay’s, Kurkure, Uncle Chipps and Cheetos are cooked in Rice Bran Oil to significantlyreduce saturated fats and all of its products contain voluntary nutritional labeling ontheir packets.BeveragesPepsiCo India’s expansive portfolio includes iconicrefreshment beverages Pepsi, 7 UP, Nimbooz, Mirindaand Mountain Dew, in addition to low calorie optionssuch as Diet Pepsi, hydrating and nutritional beveragessuch as Aquafina drinking water, isotonic sports drinks -Gatorade, Tropicana100% fruit juices, and juice baseddrinks – Tropicana Nectars, Tropicana Twister and Slice.Local brands – Lehar Evervess Soda, Dukes Lemonadeand Mangola add to the diverse range of brands.PEPSI27Pepsi is a hundred year old brand loved by over 200million people worldwide. The largest single selling softdrink brand in India is the ubiquitous'socialiser'at everyoccasion. Youngistaan loves it. 200 million peopleworldwide love it. But what has made Pepsi the singlelargest selling soft drink brand in India is actually aformula concocted a century ago in a far away continent

7UP7UP, the refreshing clear drink with natural lemon and limeflavour was created in 1929. 7UP was launched in Indiain 1990 and its international mascot Fido Dido was usedfor advertising in 1992 to position the brand as a cooldrink for youngsters. 7UP’s brand communication is

premised on the product’s natural lemon flavor , guaranteed to provideuplifting lemon refreshment that raises one’s spirits.AquafinaIn India, Aquafina’s journey began with the Bombay launch in1999 and it was rolled out nationally by the year 2000. On thestrength of its brand appeal and distribution, Aquafina hasbecome one of India's leading brands of bottled water in arelatively short span. Bottled across India in 19 plants,Aquafina ensures its availability across more than half a millionoutlets. To cater to varied consumer needs and occasions, it isavailable in various pack sizes like 300ml, 500ml, 1 ltr, 2 ltrbottles and in bulk water jars of 25lts.GatoradeGatorade, World’s No.1 Sports Drink, was indeed born on the field ofsports! Gatorade was launched in India in 2004 and over the years,has become an integral part of the kitbags of many top sports people.Top sports stars and professionals have tried and endorsed Gatoradein India including Sachin Tendulkar, Irfan Pathan, Md. Kaif, S.Sreesanth Ramji Srinivasan and Javagal Srinath.Mountain DewIt is a soft drink that exhilarated like no other because of its daring, high-energy,active, extreme citrus taste. Challenge, a can do attitude, adventure and exhilaration28is deeply entrenched in its brand DNA and the brand has always celebrated the boldand adventurous spirit of the youth.This exhilaration and excitement of Mountain Dew has always been reflected in thehigh-adrenaline advertising of the brand that connected it to outdoor adventure.In 2007, the brand was re-launched with a completely new, punchier formulation withcommunication that aimed at forging a strong emotional connect with our audience.NimboozNimbooz was launched in India this year on the 28th of February2009. Latest addition to portfolio of Pepsi Beverages. The product isavailable in 3 convenient formats, 350ml PET, 200ml RGB and200ml Tetra at magic price points of Rs.15, Rs. 10 and Rs. 10respectively.SliceSlice was launched in India in 1993 as a refreshing mango drink andquickly went on to become a leading player in the category.In 2008,

Slice was relaunched with a 'winning' product formulation whichmade the consumers fall in love with its taste. With refreshed packgraphics and clutter breaking advertising, Slice has driven strongappeal within the category.TropicanaTropicana Premium Gold was re-launched as Tropicana 100% in year 2008.Itcontinues to select the best in fruit to craft high-quality juices, createoriginal products, pioneer innovative processes and explore newmarkets for its products. It is devoted towards a healthful lifestyle byensuring that the products are naturally nutritious and provide thedaily benefits that one needs.Categories in India, Tropicana comes in 2 varieties: 100% Juices (soldas Tropicana 100%) and Juice beverages & nectars (sold asTropicana).20 oranges= 1L Tropicana 100% Orange juice8 apples= 1L Tropicana 100% Apple juice1.25 Kg grapes= 1L Tropicana 100% Grape juice1.3 Kg Mixed fruits= 1L Tropicana 100% Mixed fruit juice29MirindaMirinda is an international soft drink brand from Spain that waslaunched in India in 1991. In 2008, the brand decided to up the anteon the brand from a being led by physical attribute-taste, to deliver abrand philosophy that resonates with the audience. Now, Mirinda'sbold and vibrant colour, great orangey taste and sparkling bubblesencourages one to be more carefree, spontaneous and playful. Company OverviewThe UB Group led by Dr. Vijay Mallya, is one of India’s leading branded consumergroupThe Group has dominated the market in three main consumer driven segments:alcoholic beverages, spirits and aviation which are its main lines of business; andalso has interests in the areas of engineering, fertilizers, and biotechnologyThe UB Group comprises of United Breweries Holding Limited (UBHL), the holdingcompany which in turn owns controlling stakes in other Group companies includingUnited Spirits Limited , Kingfisher Airlines Limited and United Breweries Limited.UB Group30Group has grown in past through both inorganic (Deccan Aviation, Whyte & Mackay,

Shaw Wallace) as well as organic mode and continues to do soAll the major companies of the group are publicly listed and follow the higheststandards of corporate governance and international best practices.UNITED BREWERIES LIMITED (UBL):UBL continues to rule the roost in the brewing industry. Widely acknowledged asbeing the last major growth market for beer in the world, India has been seeing theentry of all major brewers who have brought their flagship international brands to theIndian market. Such is the dominant presence of Kingfisher in this sector, that allthese international brands are retailed at prices cross line with Kingfisher rather thanat a significant premium. Despite the efforts of these international companies, withdeep pockets and international brands, our unstinting commitment to understandingand fulfilling the needs of our Indian consumers has helped UBL to not just retain itsleadership, but to garner market share, which in the first quarter of the financial yearhas for the first time ever crossed 50%.United Spirits Limited (USL):It is India’s largest and the world’s 2nd largest spirits company. USL was earlierMcDowell and Company Limited. USL has a portfolio of more than 140 brands, ofwhich 19 are millionaire brands* (selling more than a million cases a year) andenjoys a strong 59% market share for its first line brands in India. United Spiritsrecorded global sales of 90 million cases for the fiscal year that ended on March 31,2009.The company is known to be an innovator in the industry and has several firsts to itscredit such as the first pre-mixed gin, the first Tetrapack in the spirits industry inIndia, the first single malt manufactured in Asia and the first diet whisky in theworld. USL acquired Balaji Distilleries Limited in 2008. This acquisition gave thecompany the strategic advantage to consolidate the Group’s leadership position in a

critical, large and growing State like Tamil Nadu. Currently, the procedural formalitiesare underway for the acquisition which will take retrospective effect from April 1,2009. Financial HighlightsThe Group turnover touched US$ 2.6 bn for the financial year ended Mar’08 and theGroup market capitalization as on Dec’08 was US$ 3.2 bn.United Breweries (Holdings) Limited : Net Sales is 7,149 Rs. In lacs, 2009United Breweries Limited: Net Turnover 17475.7 Rs. In million, 2009United Spirits Limited: Net Turnover is 71,130.831 Rs. In million, 2009 Brands31Whisky Brandy Wine Rum Vodka & Gin• Bagpiper• McDowell’sNo.1• Director’sSpecial• Old Tavern• Haywards• McDowell’sGreen Label• Gold Riband• RoyalChallenge• DSP Black• Signature• McDowell’sNo.1• Honey Bee• John Ex-ShawKPiC• CelebrationRum• Old CaskRum• OldAdventurer Rum

• WhiteMischief• Romanov• Blue Riband Company OverviewDabur India Limited has marked its presence with significant achievements and todaycommands a market leadership status. Our story of success is based on dedication tonature, corporate and process hygiene, dynamic leadership and commitment to ourDabur India Limited32partners and stakeholders. The results of our policies and initiatives speak forthemselves. the three major strategic business units (SBU) –Consumer Care Division (CCD)Consumer Health Division (CHD)International Business Division (IBD) Financial HighlightLeading consumer goods company in India with a turnover ofRs. 2834.11 Crore (FY09) BrandsDabur Fruit based drinks:RéalRéal has been the preferred choice of consumers when itcomes to packaged fruit juices, which is what makes India'sNo. 1 Fruit Juice brand. A validation of this success is thatRéal has been awarded ‘India’s Most Trusted Brand’status for four years in a row.Today, Réal has a range o f 14exciting variants - from the exotic Indian Mango, Mausambi, Guava & Litchi tointernational favourites like Pomegranate, Tomato, Cranberry, Peach, Blackcurrant &Grape and the basic Orange, Pineapple, Apple & Mixed Fruit. This large range helpscater different needs and occasions and has helped Réal maintain its dominantmarket share.• India's No. 1 Fruit Juice brand• Voted as a Superbrand• Voted by consumers as the most trusted fruit juice brand for four years in a row• Réal awarded the Reader’s Digest Trusted Brand Gold Award 2009 in the foodand beverages category

Réal Activ33Réal Activ is a range of unsweetened juices that contain NOADDED SUGAR, COLOURS OR PRESERVATIVES. Real Activ juicesare made from concentrated juices. After the juice is pressed fromthe fruit, the water is removed to reduce trans portation load. Atour factories, during the manufacturing of juices/ juice blends, weadd back the equivalent quantity of water. Thus, Réal Activ Juiceshave as much juice as present in respective fruit.Réal Activ Juices contain0% Added SugarNo Added Colour or PreservativesNaturally rich in antioxidant NutrientsHelps meet 1 serve of your 5-a-dayRéal BurrstRéal Burrst, the latest addition to Dabur's Foods portfolio, has arange of light & refreshing fruit beverage.Available in 4 excitingflavours of Mixed Fruit, Crispy Apple, OrangeBytez and Mango Mania, Réal Burrst promises an experiencethat delivers refreshment through lightness of fresh fruits toyou.Réal Burrst comes in an attractive tetrapack highlighting the'Lite and Refreshing' qualities of fruits that it brings to you. All 4variants are made available in 1 liter and 200 ml packs, priced at Rs. 65 and Rs. 15respectively.LEMONEEZA 250 ml bottle of Lemoneez is equal to juice 25 lemonsapproximately.Red Bull34 Company OverviewIn 1982, Dietrich Mateschitz became aware of products called "tonic drinks", whichenjoyed widespread popularity throughout Far East. His idea to market thesefunctional drinks outside Asia evolved whilst he sat at a bar at the Mandarin Hotel inHong Kong.In 1984, Mateschitz founded Red Bull. He fine-tuned the product,developed a unique marketing concept and started selling Red Bull Energy Drink onthe Austrian market in 1987. This was not only the launch of a completely newproduct, in fact it was the birth of a totally new product category.In 2008, Red Bull launched its own Cola: Red Bull Simply Cola – Strong & Natural.Very much in line with the needs of today's consumers, Red Bull Cola - unlike

traditional colas - only contains ingredients of 100% natural sources.In 2009, Red Bull extended its product portfolio with Red Bull Energy Shots: Startingin the USA, now gradually rolling out globally.Around 4 billion cans of Red Bull are consumed every year. The responsibility for thesuccess of the world's No. 1 energy drink is shared by the comp any's 6,900employees around the world. Today Red Bull has annual sales of approx. 4 billioncans in 160 countries.. As of the end of 2009, Red Bull employed 6,900 people in 160countries (end 2008: 5,683 in 148 countries).Despite the ongoing difficulties presented by the global economic downturn, plans forgrowth and investment in the business year 2010 remain - typically for Red Bull -very ambitious, but continue to rest on a solid and conservative financial footing. BrandsRed Bull Energy DrinkRed Bull Energy Drink is a functional beverage with aunique combination of ingredients. It has been speciallydeveloped for times of increased mental and physicalexertion. Red Bull Energy Drink vitalizes body and mind.Red Bull Energy Drink- increases performance- increases concentration and reaction speed- improves vigilance- improves the emotional status- stimulates metabolismRed Bull’s effects are appreciated throughout the world by top athletes, busyprofessionals, active students and drivers on long journeys.35Red Bull SugarfreeRed Bull Sugarfree is a functional beverage with a uniquecombination of ingredients. It has been specially developed fortimes of increased mental and physical exertion.Red Bull Sugarfree vitalizes body and mind.RED BULL COLAThe cola from Red Bull is a unique blend of ingredients, all from100 % natural sources. In addition, it is the only cola whichcontains both the original Kola nut and the Coca leaf. The resultis a natural, not-too-sweet cola taste, which comes from usingthe right plant extracts.Available in AUSTRIA,SWITZERLAND,UNITEDKINGDOM,ITALYIRELAND,RUSSIA.USA, BELGIUM/LUXEMBURG

RED BULL ENERGY SHOTSRed Bull Sugarfree Shot is a concentrated Red Bull Sugarfree ina 60ml bottle with the same functional ingredients as in a RedBull Sugarfree 250ml can and only 2 calories.36 Company OverviewIndia’s favorite coffee shop where the young at heart unwind. We’re a division ofIndia’s largest coffee conglomerate, the Amalgam ated Bean Coffee Trading CompanyLimited (ABCTCL). Popularly known as Coffee Day, it’s a Rs. 750 crore, ISO 9002certified company. With Asia’s second-largest network of coffee estates (10,500acres) and 11,000 small growers, Coffee Day has a rich and abundant source ofcoffee. This coffee goes all over the world to clients across the USA, Europe andJapan, making us one of the top coffee exporters in the country. Café Coffee Day(CCD) pioneered the café concept in India in 1996 by opening its first café at BrigadeRoad in Bangalore. Today, more than a decade later, Café Coffee Day is the largestorganized retail café chain in India with cafes functioning in every nook and corner ofthe country. Drawing inspiration from this overwhelming success, Café Coffee Daytoday has cafes in Vienna, Austria and Karachi. What’s more, new cafes are plannedacross Middle East, Eastern Europe, Eurasia, Egypt and South East Asia in the nearfuture.Our DivisionsCoffee Day Fresh ‘n Ground.Coffee Day Xpress.Coffee Day Take AwayCoffee Day ExportsCoffee Day PerfectBeveragesHot Coffees- Cafe Latte, Cafe Mocha , Cappuccino, Irish Coffee, Macchiato, SolarEclipse, Aztec, Black Coffee, Espresso, EthiopianCold Coffees- All Day Refresh.., Cafe Frappe, Chill O Coffee, Devils Own, KaapiNirvana, Mochachillo, Tropical Iceber...

Hoteas- Darjeeling-Divi..., Lemon Demon, Assam Express, Masala GaramFrosteas- Lemon Freeze, StrawbrrrrrrryChoco-lattes- Choco Rocks, Hot Choco LatteFruiteazers- Cool Blue, Green Apple Sod..., Lychee Chill, Mango Shake, StrawberryBlus..., Black Currant B...Café Coffee Day37 Company OverviewNestlé’s relationship with India dates back to 1912, when it began trading as TheNestlé Anglo-Swiss Condensed Milk Company (Export) Limited, importing and sellingfinished products in the Indian market. Nestlé has been a partner in India's growthfor over nine decades now and has built a very special relationship of trust andcommitment with the people of India. The Company's activities in India havefacilitated direct and indirect employment and provides livelihood to about one millionpeople including farmers, suppliers of packaging materials, services and other goods.Nestlé India manufactures products of truly international quality under internationallyfamous brand names such as NESCAFÉ, MAGGI, MILKYBAR, MILO, KIT KAT, BARONE,MILKMAID and NESTEA and in recent years the Company has also introducedproducts of daily consumption and use such as NESTLÉ Milk, NESTLÉ SLIM Milk,NESTLÉ Fresh 'n' Natural Dahi and NESTLÉ Jeera Raita. Financial HighlightGross Sales 52,224.20 Rupees in Millions [2009]Net Sales Growth upto 21.3% BrandsBEVEARGESNESCAFÉ CLASSICNESCAFÉ CLASSIC has the unmistakable taste of 100% purecoffee and is made from carefully selected coffee beanspicked from the finest plantations, blended and roasted toperfection. 100% coffee…100% pleasureNESCAFÉ SUNRISE PremiumNESCAFÉ SUNRISE Premium is an Instant Coffee-Chicory mixture(Coffee: Chicory = 70%:30%).A fine blend of Arabica and Robustabeans i s specially granulated to retain its fresh aroma and flavor,giving you an incomparable coffee experience.

Nestle India38NESCAFÉ SUNRISENESCAFÉ SUNRISE Special is an Instant Coffee-Chicory mixture (Coffee:Chicory =60%:40%).A special blend of select Robusta coffee beans are specially roasted togive you great, stimulating coffee taste and aroma. And at a price that is soaffordableNESCAFÉ CappuccinoThe world's favourite instant coffee brand NESCAFÉ brings twodelicious new Cappuccino variants - NESCAFÉ Choco Mocha andNESCAFÉ Vanilla Latte. Treat yourself to its rich coffee taste anddelicious froth.Comforting, relaxing - a delicious cup of NESCAFÉCappuccino is a great way to enjoy a true café experience at home.NESTEA Iced TeaNew NESTEA Iced Tea with Green Tea brings natural, healthygoodness of Green tea into your glass. Green tea is a good sourceof NATURAL ANTIOXIDANTS which are known to protect body cellsfrom damage caused by free radicals.Feel good everyday with therefreshingly light taste of NESTEA with Green Tea.NESTEA Instant Hot Tea MixesNew NESTEA Instant Tea gives you a full-bodied, rich tasting cup offlavourful tea. Refresh yourself with a delicious cup anytime you want!New NESTEA Instant Masala Tea is a delicious cup of tea with theflavour of traditional Indian spices like ginger and cardamom. R efreshyourself with this aroma filled, great-tasting tea!NESCAFÉ 3in1Introducing new NESCAFÉ 3in1, a perfectly balanced mix of 100%pure instant coffee, skimmed milk and sugar that gives you a cupwith great coffee taste and aroma. Go ahead, enjoy the taste of yourfavourite coffee – anytime, anywhere! Available in two convenient39packs – the single serve sachet for Rs. 5/- as well as the stylish multi-pack,containing 5 sachets, for Rs. 25/-. Company OverviewSet up in 1964 as a joint venture with UK-based James Finlay and Company todevelop value-added tea, the Tata Tea Group of Companies, which includes Tata Teaand the UK-based Tetley Group, today represent the world's second largest globalbranded tea operation with product and brand presence in 40 countries. Among

India's first multinational companies, the operations of Tata Tea and its subsidiariesfocus on branded product offerings in tea but with a significant presence in plantationactivity in India and Sri Lanka.The consolidated worldwide branded tea business of the Tata Tea Group contributesto around 86 per cent of its consolidated turnover with the remaining 14 per centcoming from Bulk Tea, Coffee, and Investment Income. The Company isheadquartered in Kolkata and owns 27 tea estates in the states of Assam and WestBengal in eastern India, and Kerala in the south.The company has a 100% export-oriented unit (KOSHER & HACCP certified)manufacturing Instant Tea in Munnar, Kerala, which is the largest such facility outsidethe United States. The unit's product is made from a unique process, developed inhouse,of extraction from tea leaves, giving it a distinctive liquoring and taste profile.Instant Tea is used for light density 100% Teas, Iced Tea Mixes and in thepreparation of Ready-to- drink (RTD) beverages.With an area of approx 15,900 hectares under tea cultivation, Tata Tea producesaround 30 million kg of Black Tea annually. Financial HighlightNet Sales / Income from Operations: 41783 Rs in lakhs[2009] BrandsTata Global Beverages Ltd40The company has five major brands in the Indian market - Tata Tea,Tetley, Kanan Devan, Chakra Gold and Gemini -- catering to allmajor consumer segments for tea. The Tata Tea brand leads marketshare in terms of value and volume in India and the Tata Tea brand isaccorded "Super Brand" recognition in the country. Tata Tea'sdistribution network in the country with 38 C&F agents and 2500stockists caters to over 1.7 million retail outlets (ORG Marg RetailAudit) in India.Bulk Tea All grades of CTC Teas All grades of Orthodox Teas Organic Tea - Orthodox gradesTeas are supplied in packaging as per ISO norms as well as customer requirementsviz. 4-ply Kraft Paper Sacks, Multiwall Paper Sacks, Rigid T--Sacks, Polywoven Sacks,

Currugated Fibre Carlons, Polylined Jute Bags etc.Instant Tea(All products are cold water soluble)Instant Tea Division caters to customer specific product and are used for light density100% Teas, Iced Tea Mixes and in the preparation of Ready to Drink (RTD)beverages. Instant Tea powder is packed in bulk packages of 20/25/35 kg each.TEA- Tata Tea, Tetley, Kanan Devan, Chakra Gold and GeminiCoffee Tata's Coorg 100% Pure Filter CoffeeCoorg Pure is the connoisseurs' choice. It is becoming as much a part of thepurist's morning as the sound of temple bells, suprabatham and the morningnewspaper. A rich shot of the traditional hand-grinder, lit by shafts of morninglight is a key image - that triggers off memories of a time when coffee wasground at home. It is the only brand of pure coffee available in triple laminatepolypack (seals in aroma and freshness) in the market.Tata's Coorg Double RoastTata's Coorg Double Roast has become India's 2nd largest filter coffee-chicorybrand. The brand has captured the hopes and aspirations of the archetypal41daughter-in-law. Confident, seeking to express herself and gain respect. For eg: in the ad-film thedaughter-in-law gains the approval of her husband and her mother-in-law too, who both exclaim"Fantastic Malathi". A host of new packs like internationally accept ed valve packs and the'Chinna Thambi' (kid brother in Tamil) Rs. 1.50 pack have opened up new markets for the brand.Tata CafeTata Cafe, a 100% Pure Instant Coffee, was launched in 1996, offer a "Bush toCup" experience in a cup of pure Instant coffee for a very competitive price.The product was endorsed by Popular film artistes like Sridevi and RenukaSahane and ace cricketer Saurav Ganguly. Lot of innovative marketingactivities have given this brand larger than life image.Tata KaapiTata Kaapi, an Instant Coffee - Chicory mixture is the third player in the Instantcoffee-chicory segment. This brand attempts to strike a balance between Traditionand Modernity. A blend of tradition and lifestyle imagery has been used to projectthis brand. Innovative marketing has been the hallmark of this brand, with

everything larger than life and beyond ordinary. This brand has triumphantlyentered the Guiness Book of World Records with the world's largest Coffee mug.Consumers are positively responding and it is heartening to note the acceptancegained in the most discerning coffee state of them all - Tamil Nadu.421. Indian Non-Alcoholic Beverage Market2. Indian Soft Drink Market3. Indian Tea Market4. Indian Alcoholic Beverage Market5. Indian Beer Market6. Indian Wine Market7. Key risks to the beverage industry8. Future Projections Of Indian Beverage IndustryMajor Market under Indian Beverage Industry43Non-alcoholic beverages are broadly classified as carbonated drinks, non-carbonateddrinks and hot beverages.India n on-alcoholic drinks market togrow at 15% CAGR.The fruit juices and fruit-based drinks marketis close to Rs 5,000 crore ($1.13 billion), growing at 35-40 percent annually.The carbonated drinks market is close to Rs 6,000crore ($1.36 billion) with growth at 10-12 per cent.Within the hot beverages category, India is the largest producer oftea and accounts for 28 per cent of the global production at 956million kilograms annually.The total turnover of the tea industry isover Rs 8,000 crore ($ 1.8 billion), growing at a rate of 1.2 percent annually.India is the world’s 5th largest producer of coffee, accounting for 4 percent of the world’s production.India has witnessed radical shift in consumption of non-alcoholic drinks over therecent past. Fast expanding middle class population that is currently around 350million, increased urbanisation and rising disposable income are some of the majorreasons contributing to this change.Indian non-alcoholic drinks market was estimated at around Rs 216 billion in 2008and is forecast to grow at a CAGR of around 15% during 2009-2012.“Growing health consciousness among India’s young population has brought about arevolution in the Indian non-alcoholic drinks market. It has been seen that cola sales

have fallen dramatically due to rising health concerns and this seems to havebenefited the country’s non-carbonated drinks market such as energy drinks andjuices,” the company said.According to the segment level analysis, the highest growth will be seen in thefruit/vegetable juice market which is forecast to grow at a CAGR of around 30% invalue terms during 2009-2012. It will be closely followed by the energy drinkssegment at a CAGR of around 29% during the same period. There is a greaterIndian Non-Alcoholic Beverage Market44awareness of the ‘functional’ benefits of health beverages and a greater willingness topay a premium for such beverages. With these strong drivers of growth, it is notsurprising that the beverage industry in India has begun responding with productsthat are marketed clearly on a health and wellness platform.In India, the Coca-Cola and Pepsi soft drink brands suffered a setback in August oflast year due to a product contamination scare. Both have cut profit margins to thebone in order to fend off competition from low-priced local fruit drinks.Indian consumers are accustomed to drinking a variety of locally-produced soft drinksthat are sold in small stands throughout the country. Rural India is still a highly pricesensitivemarketplace, so the major soft drink companies are forced to cut profitmargins in order to compete there.India's purchasing power parity per capita of US$2,850 is representative of a nationin which the average consumer has insufficient income to engage in discretionaryspending. Nevertheless, during the hot season, spur-of-the-moment beverage salesare commonplace. In order to position themselves for sales growth, themajor soft drink companies priced a 200-milliliter bottle at the equivalent of 11 U.S.cents. Although that price is not sustainable beyond the short term, managementhopes that it will be enough to wrest market share away from local products and

substantially increase sales volume in 2004.Beverage companies cannot afford to ignore India's rural consumers if they wish toexpand market share. According to data release by the PRB, only 28 percent ofIndia's population lived in urban areas in 2003. On average, rural consumers have alower income level than their urban counterparts and demand lower-cost beverageoptions.In order to remain cost competitive, soft drink companies have to contain thetransportation costs involved in expanding their distribution network into widespreadtowns and villages. Faced with high fuel and vehicle costs, companies are turning toless expensive means of transportation including ox carts and rickshaws.Another challenge facing the major soft drink companies is regaining consumerconfidence in the aftermath of a well- publicized scandal over the presence ofpesticides in some soft-drink products. A major publicity campaign aimed at regainingconsumer confidence seems to be working, but bottlers need to avoid any moreissues that would throw product safety into doubt.45Recovering and maintaining an image of quality will be a key weapon in the struggleto take market share away from locally produced fruit beverages. Indian consumersare ready to opt for soft drinks, but not at a premium price.India soft Drink markets provide the latest retail salesdata, allowing you to identify the sectors drivinggrowth. ISD identifies the leading companies, theleading different types of brands and offers strategicanalysis of key factors influencing the market - be theynew product developments, packaging, Innovations,economic / lifestyle influences, distribution or pricingissues. India Soft Drinks can access in online strategicmarket analysis and an interactive statistical database of volume and value marketsizes including on-trade and off-trade, company and brand shares, distribution andpricing data.India soft drinks industry continued on its path to recovery from the low growth

seen between 2005 and 2006, with higher volume growth in 2008 than that seen in2007. The mature sectors of bottled water and fruit/vegetable juice and carbonatessaw a dynamic year, with companies refreshing their products’ brand image andpackaging to attract to the new consumers. showing product categories, such asenergy drinks and reconstituted 100% juice, saw high and double-digit growth rates,as companies increased their products’ penetration in India. Off-trade volume growthwas slightly higher than on-trade volume growth, its convenient on-the-go packaging,Indian Soft Drink Market46company sponsored chillers in kiranas and attractive supermarket displays fueled offtradesales across the hole marketing shares.Multinationals Companies are Coca-Cola India and Pepsi Co India Holdings sawtheir off-trade value shares of soft drinks in India decline over the review in period,as other national and regional players updated their brand portfolios and increasedthe volume and demand of their brands in India. The bottled water players, such asParle Bisleri and Dhariwal Industries, were particularly successful in expanding theirconsumer base through a concerted effort to increase their manufacturing capacityand move to newer regions within India.The Dabur India and Parle Agro benefitedfrom their first mover advantage in being present in high-growth emerging productcategories, such as 100% juice and other non-cola carbonates from all companies inIndia.Market size for FY00 was around 270 m.n cases (6480mn bottles). The marketwitnessed 5- 6% growth in the early‘90s. Presently the market growth has growthrate of 7- 8% per Annam compared to 22% growth rate in the previous year. Themarket size for FY01 was 7000 mn bottles. India soft drink market is developing

more than every year.All market preference is highly regional based. different flavors of soft drinkcompanies marketing succeed in various cities, While cola drinks have main marketsin metro cities and northern states of UP, Punjab, Haryana etc. Orange flavoreddrinks are popular in southern states. Sodas too are sold largely in southern statesbesides sale through bars. Western markets have preference towards mango flavoreddrinks. Diet coke presently constitutes just 0.7% of the total carbonated beveragemarket. Soft Drinks Available in:All Soft drinks are available in glass bottles, aluminum cans and PET bottles for homeconsumption. Fountains also dispense them in disposable containers Non-alcoholicsoft drink beverage market can be divided into fruit drinks and soft drinks. Soft drinkscan be further divided into carbonated and non-carbonated drinks. Cola, lemon andoranges are carbonated drinks while mango drinks come under non carbonatedcategory and different tastes and flavors available.47 India soft drinks Market Segmnetation:Segmented on the basis of types of products into cola products and non-colaproducts. Cola products account for nearly 61-62% of the total soft drinks market.The brands that fall in this category are Pepsi, Coca- Cola, Thumps Up, diet coke, DietPepsi etc. Non-cola segment which constitutes 36% can be divided into 4 categoriesbased on the types of flavors available, namely: Orange, Cloudy Lime, Clear Lime andMango. different flavored drinks are named in different names in all categories.India Alcoholic Drinks Market expected to grow over 9% CAGR during 2009-2013.India represents one of the fastest growing alcoholic drinks markets in theworld on account of rise in disposable income and greater acceptance of alcoholicdrinks as a life style product especially by country’s middle class consumers.

In addition, one of the lowest per capita alcohol consumption rate coupled withenormous consumer base is all set to drive the market which will secure anexponential growth curve of over 9% CAGR (in volume terms) by 2013.The tea industry in India is about 172 years old. It occupies an important place andplays a very useful part in the national economy. Robert Bruce in 1823discovered tea plants growing wild in upper Brahmaputra Valley. In1838 the first Indian tea from Assam was sent to United Kingdom forpublic sale. Thereafter, it was extended to other parts of the countrybetween 50's and 60 's of the last century.However, owing to certain specific soil and climatic requirements itscultivation was confined to only certain parts of the country. Teaplantations in India are mainly located in rural hills and backward areasof North-eastern and Southern States. Major tea growing areas of the country areconcentrated in Assam, West Bengal, Tamil Nadu and Kerala. The other areas wheretea is grown to a small extent are Karnataka, Tripura, Himachal Pradesh, Uttaranchal,Arunachal Pradesh, Manipur, Sikkim, Nagaland, Meghalaya,Mizoram, and Bihar.Unlike most other tea producing and exporting countries, India has dualmanufacturing base.India produces both CTC and Orthodox teas in addition to reen tea. The weightagelies with the former due to domestic consumers’ preference. Orthodox tea productionis balanced basically with the export demand. Production of green tea in India issmall. The competitors to India in tea export are Sri Lanka, Kenya, China, Indonesiaand Vietnam.INDIAN TEA MARKET48Tea is an agro-based commodity and is subjected to vagaries of nature. Despiteadverse agro climatic condition experienced in tea growing areas in many years,Indian Tea Plantation Industry is able to maintain substantial growth in elation tovolume of Indian tea production during the last one decade.There has been adramatic tilt in tea disposal in favour of domestic market since fifties.While at the time of Independence only 79 M.Kgs or about 31% of total production of

255 M.Kgs of tea was retained for internal consumption, in 2008 as much as 802M.Kgs or about 82% of total production of 981 M.Kgs of tea went for domesticconsumption. Such a massive increase in domestic consumption has been due toincrease in population, greater urbanisation, increase in income and standard of livingetc.Indian tea export has been an important foreign exchange earner for the country.There was an inherent growth in export earnings from tea over the years. Till 70s’,UK was the major buyer of Indian tea Since 80s’ USSR became thelargest buyer of Indian tea due to existence of the trade agreement between Indiaand erstwhile USSR. USSR happened to be the major buyer of Indian tea accountingfor more than 50% of the total Indian export till 1991. However, with thedisintegration of USSR and abolition of Central Buying Mechanism, Indian tea exportssuffered a set back from 1992-93.However, Indian Tea exports to Russia/CIS countries recovered from the setbacksince 1993 under Rupee Debt Repayment Route facilities as also due to long termagreement on tea entered into between Russia and India. Depressed scenario againstarted since 2001 due to change in consumption pattern, i.e. switch over from CTCto Orthodox as per consumer preference and thus India has lost the Russian market.Another reason for decline in export of Indian tea to Russia is offering of teas at lowerprices byChina, South Asian countries like Indonesia and Vietnam.The major competitive countries in tea in the world are Sri Lanka, Kenya, China andIndonesia. China is the major producer of green tea while Sri Lanka and Indonesiaare producing mainly orthodox varieties of tea. Kenya is basically a CTC teaproducing country. While India is facing competition from Sri Lanka and Indonesiawith regard to export of orthodox teas and from China with regard to green export, it

is facing competition from Kenya and from other African countries in exporting CTCteas. Because of absence of large domestic base and due to comparatively smallrange of exportable items, Sri Lanka and Kenya have an edge over India to offloadtheir teas in any international markets. This is one of the reasons of higher volume ofexport by Sri Lanka and Kenya compared to India. Another important point is that,U.K has substantial interest in tea cultivation in Kenya.49Most of the sterling companies, after Idealization due to implementation of FERA Actstarted tea cultivation in Kenya. So, it makes business sense for U.K. to buy tea fromKenya and Kenya became the largest supplier of tea to U.K. Tea is an essential itemof domestic consumption and is the major beverage in India. Tea is also consideredas the cheapest beverage amongst the beverages available in India. Tea Industryprovides gainful direct employment to more than a million workers mainly drawnfrom the backward and socially weaker section of the society. It is also a substantialforeign exchange earner and provides sizeable amount of revenue to the State andCentral Exchequer.The total turnover of the Indian tea industry is in the vicinity of Rs.9000 Crs.Presently, Indian tea industry s having (as on 18.12.2009 )• 1692 registered Tea Manufacturers,• 2200 registered Tea Exporters,• 5848 number of registered tea buyers,• Nine tea Auction centres.Alcohol consumption in India is growing by 8% this year. The totalconsumption of alcoholic beverages in India is expected to touch217.1 million cases in 2010.The total consumption of spirits inthe country stood at 200 million cases in 2009. A case has 12bottles, totaling nine liters. The Indian alcoholic beveragesmarket is dominated by whisky, which accounts for more thanhalf of the total spirits Consumed in the country. The totalconsumption of whisky is estimated to be around 131 millioncases in the current year, a rise of 10 per cent from 119 millioncases in 2009.Indian Alcoholic Beverage Market

50After whisky, rum is the most popular alcoholic beverage in India and thetotal consumption is estimated to be at 42.4 million cases in the currentyear, a rise of 8.7 per cent from 39 million cases in 2009.The Indian alcoholic beverage market is currently dominated by localbrands such as McDowell, XXX, Bagpiper, 8PM and Officer's Choice,collectively known as the semi-premium segment.The Vijay Mallya-promoted United Spirits, which has brands like McDowelland Bagpiper under its portfolio, is the largest player in the segment --with sales of over 100 million cases per annum. Diageo, the largestspirits maker globally, is the second-largest player in the country withbrands like Johnnie Walker under its portfolio.Among domestic companies, Radico Khaitan -- with brands like 8PM andMagic Moments -- is the second-largest firm after United Spirits in thecountry.The Indian beer market is dominated by United Spirits' sister concern,United Breweries, and Sabmiller. Both companies account for more than80 per cent share in the beer category.Almost all the segments analyzed in the report are found to be growing atrapid pace even in the phase of economic crisis, especially the alcoholicdrinks segment, which is expected to reach 3 Billion Liter mark by 2012from around 1.95 Billion Liters in 2008, has been outperforming othersegments in terms of sales growth and concreting a solid platform forstiff competition in the domestic market among existing as well as newmarket players.51The low brand loyalty and price-sensitive consumer behavior is stillpreventing the Indian market to unfold its full potential. However, it willrequire balanced brand portfolio strategies, comprising of diverse

product mix with superb level of quality and that too on an affordableprice. This is expected to result into an overall market progress in whichthe consumer will be benefited the most.India's liquor market is very prosperous these days. While still relativelysmall, at $1 billion in annual sales, it is expanding 10% a year, thanks tothe middle class's growing thirst for alcohol. This is quite a switch for anation whose constitution encourages a tee totaling lifestyle. The likes ofGuinness/UDV, Seagram, Bacardi Martini, and LVMH are taking fulladvantage, setting up distilleries and distribution joint ventures ormaking their booze readily available. The result is an all-out war for theIndian drinker--with bootleggers, multinationals, and local tycoonsslugging it out for a piece of the action.52Drinking practices vary substantially among differentcountries and different masses. But both alcoholicbeverages are very popular among all ages of people.The alcoholic drinks market is broadly classified intofive classes, starting from beers, wines, hard liquors,liqueurs and others. The Indian alcoholic market hasbeen growing rapidly for the last ten years, due to thepositive impact of demographic trends and expectedchanges like rising income levels, changing age profile, changing lifestyles and reduction in beverages prices. Beer and wine are perhaps theoldest and most popular of all alcoholic beverages in the world.The Indian beer Industry has been witnessing a steady growth rate of 7-9per cent per year for the last ten years. Apart from Kingfisher andFoster’s Beer, the other brands in the Indian market are Carling BlackLabel, Carlsberg, Dansberg, Golden Eagle, Haywards 5000,PremiumLager, Kingfisher Strong, Hi-Five etc. to name a few. India has emergedas one of the fastest growing markets for wine consumption on theglobal map.Indian Beer Market53

The market is growing at a rate of up to 25% per annum each year. With apopulation base of over 1.1 Billion, the consumption of wine isextremely low, indicating vast potential for future growth. ChampagneIndage has been the pioneer in making French style wine in India.Grover Vineyards and Sula Vineyards too have made smart strides in ashort time span. Recently, companies in the Indian Made ForeignLiquor (IMFL) space like Diageo, United Breweries and Seagrams toohave ventured into making wine. Other majors players in this field areUnited Spirits Ltd, Mohan Breweries & Distilleries Ltd, JagatjitIndustries Ltd, Empee Distilleries Ltd. Radico Khaitan Ltd. etc. to namea few.India presents a huge growth potential for alcoholic beverages sales. Thedomestic production of beer and wine is on the rise, especially beerwith official statistics reporting a 12 per cent increase in domestic beerproduction. Increasing GDP, favourable growth in the demographicswith a growing urban middle class, growth of modern retail formats,hopeful rationalization of the taxation rules and ban on local countryliquor and rising health consciousness, age preferences will act infavour of the growth of alcoholic (beer and wine) beverages in India inthe near future.Beer is a popular beverage all over the world and contains alcohol ranging from 8 to9 %. It is found effective in improving appetite and is considered good for health.Formulations of beer manufacturing are done with the availability of raw materials inthat particular part where the brewery is established. Beer units are concentrated inthe state of Maharashtra, Karnataka, U.P. and Goa with no units in Assam, Tripura,Tami Nadu, Gujarat, Orissa, Rajasthan and Bihar. Keeping in view the tremendousexport potential, it would be worthwhile to explore the possibilities of setting up anexport-oriented unit. this can be a challenging investment for an entrepreneur.Plant capacity: 10000 Bottles/Day

Working capital: Rs. 110.49 LakhsReturn: 34.42%Plant & machinery: Rs. 293.25 LakhsBreak even: 52.90%T.C.I: Rs. 549.74 Lakhs Indian Made Foreign Liquor54Indian made foreign liquor basically prepared from ethyl alcohol of differentconcentration with added flavour and coloured bottled hygienically. In India there areabout 260 units engaged in the production of alcoholic brandy, whisky, beer & otherbeverages. The installed capacity of all those units is estimated of the order of 1400to 1450 million liters per annum. India has been exporting alcohol in a substantialquantities. The estimated growth rate of demand is 20% per annum with increase inpopulation and other industrial growth and consumption. There is good scope for newcomers.Plant capacity: 10,000 Btls/DayWorking capital: Rs. 150.00 lakhsReturn: 50.93%Plant & machinery: Rs. 201.00 lakhsT.C.I: Rs. 450.00 lakhsBreak even: 44.86% Glass Bottles For BeerGlass bottles manufacturing occupies an important part in the glass manufacturingindustry in the field of glass container manufacturing. Glass is being more extensivelyused today than ever before and its progress in India has been quite satisfactory andwell maintained. Amongst the various glass items being produced in India, are glassbottles and containers of all types for pharmaceutical, soft drinks, foods, breweries,gums, inks, chemicals etc. Glass industry is one of the prominent industries in theworld and its demand has ever since been on the increase. New entrepreneurs mayinvest in this sector.Plant capacity: 1,00,000 Nos./DayReturn: 70.00%Plant & machinery: 1.95 Crores

T.C.I: 5.18 CroresBreak even: 35.00%Apart from Wine, Beer is the potential area of opportunities as the market isforecasted to post double digit growth during 2009-2013 due to its increasingpopularity among youngsters and western culture influence. In contrast, thecompetition level in this segment is moderate; thus it asks additional players toprovide answers to overflowed demand.The population is evidently huge (945 million in 1996 and over 1.1 Billion during2004). It is still growing by 20 million plus every year, though this may have eased in2003. However, 600 million at least are still outside the market for anything exceptvery cheap Country Liquor. Advertising has always been officially illegal. In practice,all major brands spent heavily on Surrogate brands under the same brand name (onglasses, mineral waters, bottle openers, fashion articles for men etc.).55The Distribution system is still the same for Beer as for Spirits and Wine. All outletsmust be licensed; Wholesalers, Retailers, Bars and Restaurants, and BondedWarehouse operators. They pay the, varying, States licence fees. These can, atpresent, only sell Indian-made Liquor over most States. It continues to be expectedthat Beer and Wine may shortly be permitted to sell in more outlets.South India is the largest consumer of IMFL and Beer. It is more important thanNorth and West together. Tax-paid Country Liquor is most important in North andWest. The West is declining due to high taxes, and the North increasing in CountryLiquor and Beer particularThe Indian wine industry is in its nascent stage.However, theIndian wine industry has been continuously growing over the lastten years. Awareness about the benefits of wine drinking is alsoon the rise and wine is gradually becoming a part of urban Indianlife style. Rising incomes of Indian population and exposure tonew culture is adding to the higher consumption. Wine volumeIndian Wine Market56

sales grew by 17% in 2005, keeping up with the pace of growth seen in 2004 to clockreach 4.6 million litres. Value sales of wine were worth just under Rs4.5 billion, whichrepresented an increase of almost 20% in current terms on the previous year.Despite the rapid growth, wine sales continued to represent a minor proportion oftotal alcoholic beverages consumption in India, and barely measurable per capitaconsumption. As per the types of wine consumed, red wine has the largest marketshare (45% of total wine consumed) followed by white wine (40%), sparkling wine(13%) and rose wine (2%). Further, the consumption of wine is unevenly spreadacross the country as 4 major cities i.e. Mumbai (40%), Delhi (31%), Goa (8%) &Bangalore (6%) contribute about 85% of total wine consumption. The Indian winemarket is mostly dominated by three major players / Companies. Grapes are the keyraw material in the production of wines. For wine manufacturing, uninterruptedsupply of grapes is must to ensure smooth production. Hence most of thewinerieshave their own vineyards or make arrangements with farmers / growers for supply ofgrapes as a backward integration. Recognising the scope of potential, theGovernment of India has put more emphasis on the development of the wineindustry. The Maharashtra Government has announced a series of incentives like nilexcise duty and 4% sales tax same as that of agricultural produce for all the wineriesin the state, simplified licensing procedure for new wineries, winery has been givenstatus of Food Processing Industry, grant of subsidy, single window clearance systemetc. after it classified wine as agro based product. The state has also established twowine parks, Godavari Wine Park in Nashik and Krishna Wine Park in Sangli districtPlant capacity: 10500 Ltrs/dayReturn: 68.00%Plant & machinery: 453 LakhBreak even: 32.00%

T.C.I: 1218 LakhThe growth in production over the years has hovered at about 5 to 6 per cent,whereas the demand is growing at 10 to 12 per cent per annum. The ten keymanufacturers are the producers of wines, liquors, and spirits in the organized sectorhaving a combined share of about 67 per cent are McDowell & Company, BalajiDistilleries, Shaw Wallace & Co., Jagatjit Industries, Mohan Breweries & distilleries,Shiva Distilleries, Maharashatra Distilleries, Pearl Distilleries, Herbert sons and MohanMeakin. The ten major beer manufacturers in the organised sector having thecombined market share of about 75 per cent are United Breweries, Mohan Breweriesand Distilleries, Skol Breweries, Balaji Hotels and Enterprieses, Mohan Meakin,Mysore Breweries, Charminar Breweries, Aurangabad Breweries, HindustanBreweries, And Bottling and Mount Shivalik Breweries. Hops is another major rawmaterial in short supply. Most of the hops used for flavouring beer are imported fromGermany. Indian companies producing IMFL use the molasses route for manufactureof IMFL as against the international pracouraging the use of non-molasses route in57India. The alcoholic beverages industry is one of the few industries that still requiredlicence under the Industries Act (Development & Regulation). Through the minimumcapacity has been fixed at 50,000 hectoliters, the government in recent times hasissued licences to manufacture 150,000 hectoliters to some units. This has arousedexpectations of the industry that the minimum economic size may be hiked to thisnewer level. There is an ample scope for future developments in the manufacturingtechnology adopted by advance countries since the demand for alcoholic beverages isfaster than the existing production capabilities of the alcoholic beverages industry.Adequate availability of raw materials, improvements in processing and

manufacturing technologies, decontrol of liquor distribution, tax concessions, andabove all wide publicity of IMFL and beer brands through the media would not onlyhelp the industry in enhancing its production but also in competing the world with itsproducts of international standards.Key Risks To The Beverage Industry58As water is the essential ingredient in a beverage product, as wellas vital for cooling and cleaning during the production process. Sowhen one considers that India’s current water supply isapproximately 740 billion m3, but it has been estimated that by2030 demand for water in India will grow to almost 1.5 trillion m 3,the industry will clearly be facing a major problem there. There willsimply not be enough water.Yet China, India and Indonesia are all a focus for beverage companies due to theirlower market penetration. There can be little doubt, however, that water securityissues will beone of the biggest threats to developing market potential. Let’s first take a look at thealcoholic drinks industry.The market growth for alcoholic drinks is particularly strong in emerging Asianeconomies, driven by a range of socio-economic factors.These include favourabledemographics such as the greater proportion of young people reaching the legaldrinking age and increased per capita income and urbanization in countries such asIndia and China.The water bottles market is also booming. The market for bottled water is developingrapidly in Asia. Health concerns of polluted municipal water sources and increasingwater shortages are expected to be key drivers of this, but wealth and the increase inAsian middle classes will play the most significant role.Consumer demand for purity, hygiene and convenience is on the increase. In Indiathe market is expected to grow by 100 percent over the next five years and there arecurrently more than 2,000 bottled water producers. Whilst there has been a backlash

against bottled water in developed countries as the environmental impact of plasticbottles becomes more apparent, in Asia it looks set to become an increasing trend.59 Beverage Industry is projected to have overall growth between8% -8.5 %Indian non-alcoholic drinks market is expected to at a CAGR of around 15%during 2009-2012. India Alcoholic Drinks Market to Grow Over 9% CAGR during 2009-2013 The India Alcoholic Drinks Market Is Expected To Reach The 3 Billion Liter MarkBy 2012 The sectors which are projected to achieve excellent growth of 20% from wine Fruit/vegetable juice market will grow at a CAGR of around 30 per cent in valueterms during 2009-2012 The energy drinks segment which will grow at a CAGR of around 29 per centduring the same period. All in all, annual per capita consumption of packaged beverages is supposed totriple from 2.6 litres in 2000 to 8.7 litres in 2012. Demand for milk and milkbasedbeverages are also rising. The estimated INR 340 bn Indian liquor industry is expected to maintain itsCAGR of 15%Future Projections Of Indian Beverage Industry6061