The rise and rise of the Indian beverages market

India is one of the fastest growing economies in the world. Today India is the tenth largest economy and the third largest food processor worldwide. Due to the extraordinary developments in all important industrial sectors, the demand for machinery and equipment has grown rapidly within the last ten years - a demand that cannot be met exclusively out of India’s production.

Despite a considerable increase in the supply provided by local food processing and packaging machinery manufacturers, there is a high demand for foreign machinery featuring state-of-the-art technology. For the manufacturers of food processing and packaging machinery, India has become a very important market in Asia with strong growth potential. Within the last five years the Indian imports of food processing and packaging machinery increased by 200 percent and amounted to 550 US $ million in 2008. With a market share of 23 percent Germany is the most important supplier to the Indian food and beverage industry.

Non-alcoholic beverages

The carbonated soft drinks industry in India comprises over 100 plants across all states. It provides direct and indirect employment for over 125,000 employees. It has attracted one of the highest foreign direct investments in the country amounting to around 1049 US $ million. Soft drinks constitute the third largest packaged food segment in India after packaged tea and packaged biscuits. But the penetration level of carbonated soft drinks in India is still low compared with other developing markets, an indication for further potential for rapid growth. The market size for bottled water in India has been estimated at 570 US $ million in 2008. With an annual growth rate of 14.5 percent volume sales of bottled water will increase rapidly within the next five years.

Sales volume of non-alcoholic drinks in India

Source: Euromonitor International 2009

Alcoholic beverages

India is one of the largest markets for alcoholic beverages in the world. The sales volume of beer amounted to 1074 million litres in 2008. 56 units are engaged in manufacturing beer under the licence of the Indian Government. Sales volume of spirits has grown very fast within the last five years from 800 million litres in 2004 to 1234 million litres in 2008.

The annual growth rate of beer volume sales will reach 12 percent, sales volume of spirits will grow 10 percent per annum.

Sales volume of alcoholic drinks in India

Source: Euromonitor International 2009