How Nimbu Paani And Jaljeera Are Giving Coca-Cola, Pepsi A Cool Challenge This Summer

Feeling a mite guilty as he finished his market report on cola sales and headed for his air-conditioned car on a hot April afternoon, he cajoled himself with the thought that the heat had to be beat. A conscience-saving grace for Raghav—crores are joining his chain of thought.

Yes, India’s humble nariyal paani, shikanji, aam panna and jaljeera never had it as good as they will this summer. Scorching as the next few months will be, they will see desi thirst-quenchers giving leading international brands like Coca-Cola and Pepsi a run for their money. The market is massive, as are the options available to battle India’s merciless summer months.

Numbers Tell The Story

A quick look at the numbers underscores the staggering revenues at play here. The carbonated soft drinks market in India saw sales of US $18.25 billion (Rs 1,52,843.75 crore) in 2022, growing at a compound annual growth rate (CAGR) of 19.8 per cent since 2017, Research and Markets said in a recent report.

Market consumption volume increased at a CAGR of 10.2 per cent in this period to reach 9.29 billion litres in 2022. Plug in the same sales growth for the last two years and revenue numbers for 2024 will be in the vicinity of nearly Rs 2,20,000 crore this year.

The global scenario is even more mind-boggling, given the consumers’ penchant for downing soda and chips, soda and burgers and other indulgent gastronomic permutations. Zion Market Research valued the global soft drinks market at US $445.80 billion (Rs 37,35,250 crore) in 2022 and witnessing steep growth, set to reach US $630.89 billion (Rs 52,84,625 crore) by 2030.

The industry is an oligopoly and the unsurprising leaders are Coca-Cola and PepsiCo. Around 5 per cent of these global sales come from India and this market is thus becoming increasingly important in the soft drink scheme of things.

Ironically, India’s rising presence in the sales hierarchy is giving market leaders Coca-Cola and PepsiCo parched throats, even when they enjoy 45 per cent and 25 per cent of the marketshare, respectively. That’s because India’s local brands are progressively taking them on with desi alternates that are growing in number each day—sales are rising, as are revenues, eating into carbonated drinks’ cascade of profitability.

Try as they might, the big boys are finding it tough to stem off the Indian challenge, wherein new brands are emerging as shelf- and mind-space dominators and old brands are refusing to go away.

A classic case is that of Thums Up, which was picked up by Coca-Cola India with the intent of killing it only to push Coke sales. However, incessant market clamouring for Thums Up not only forced its revival, but also led to a market resurgence and increased popularity and sales.

Industrialist Ramesh Chauhan, the Chairman of Bisleri and India’s erstwhile soft drinks king who launched Thums up, Limca and Gold Spot, summed it up best. “It is not a question of me continuing to follow the brand or the question of Thums Up still being successful. People said it tasted like cough mixture, but (over time) Thums Up became a part of India’s culture. It can’t be called my brand or Coca-Cola’s brand. It is the nation’s brand.”

The emergence of Indian brands is also a topic of debate, with a slew of sugar-free, natural and organic energy drinks competing with the more traditional cola-, lime- and orange-flavoured options that have traditionally enjoyed a lion’s share of the market.

The Rise Of Desi Brands

Local brands such as BPI Sports, Ghodawat Consumer, Hector Beverages, Hell Energy, Ocean Drinks, Radiohead Brands and Tata Consumer Products have tapped into India’s growing health-consciousness, especially in urban areas, and are now established as worthy competitors, having chugged down over US $1 billion in revenues and growing at over 5 per cent CAGR.

The trend of local brands jostling for eyeballs and marketshare in this super-competitive sector is nothing new. All Indians above 40 years of age today were brought up to jingles and TV ads of Rasna, Rooh Afza, Duke’s, Kissan Squashes and Campa Cola. In them, India didn’t just create runaway market favourites, with the brands using sheer marketing genius to become household names.

A similar marketing coup has been achieved in recent years by Paper Boat, which literally took to the air with its brand—most tasted Paper Boat’s aamras and golgappe ka paani while flying on India’s domestic airlines. Packaged chaachh, lassi and flavoured milk offered by Amul, Mother Dairy and others are similar triumphs.

Other factors that have seen desi companies giving international giants a run for their money are health drinks and unique packaging. Some Indian firms have taken to healthier beverage alternatives with low sugar and traditional therapeutic qualities, packaged in attractive and long-lasting bottling options like tetra-packs and spout pouches.

In both quality of content and packaging, Coca-Cola and PepsiCo have had next to no answer to this off-the-shelf revolution.

As a market, India is unique and its alcoholic and non-alcoholic beverages are as diverse as its people, influenced both by geography and the weather. Hot summers demand thirst-quenching and refreshing drinks, while cold winters necessitate steaming hot cups of chai and coffee.

Different regions have their own set of drinks made up of a combination of spices and herbs, with blends created for the benefits of not just health, but for a feeling of well-being too.

Having touched upon India’s feeling of well-being, it would be appropriate to mention bhaang, feni and toddy. The former, created from buttermilk and cannabis, is popular during the Holi festival, particularly in the northern region. Feni comes from cashews and is popular in Goa, while toddy comes from the coconut tree and is indigenous to India, as are varying avatars brewed with the same intent and design.

Back to sobering numbers, Goldstein Research says leading up to 2030, India’s packaged non-alcoholic beverages market will grow at a CAGR of 16.2 per cent, with energy drinks inundating the market like flood-waters.

Soft drinks will be no drying revenue stream either, especially since annual consumption is still low at around 84 bottles per capita, compared to markets such as Brazil (537), the US (1,496), Mexico (1,489) and Germany (1,221).

One of the challenges for the soft drinks industry is reaching rural markets, which account for over a third of India’s population. Access to rural consumers across a vast geography presents distribution challenges, while making chilled carbonated drinks available to this large population is also a tall ask. That is where India’s very own favourite nimbu paani, jaljeera, aam panna, khus khus and other desi nuskhas come into auto-play.

Thus, to end this column, here’s a mime. “In good time and given the clime, said India’s summer lime: I am more than worth your dime.” Bad poetry, I admit, but it does rhyme. It also underscores an innate desi reality.

(The author is a New Delhi-based independent journalist and commentator. Views expressed are personal)