Non-alcoholic beverage market likely to hit Rs 1.47 trillion by 2030: Report

Non-alcoholic beverage market likely to hit Rs 1.47 trillion by 2030: Report

27 May    Finance News

India’s non-alcoholic beverages market is expected to grow to Rs 1.47 trillion by 2030 at a compound annual growth rate (CAGR) of 8.7%, from around Rs 67,100 crore in 2019, the Indian Council for Research on International Economic Relations (Icrier) said in a detailed analysis.

Carbonated soft drinks (CSDs), ready-to-drink teas (RTDs), energy drinks, and sports drinks accounted for more than 60% of the global market. Carbonated beverages are the most popular among Indians, followed by bottled water and fruit beverages and juices.

The report also indicated that the non-alcoholic beverage sector shows enormous potential for developing job opportunities in the country. The total number of jobs produced in 2018-19 was around 691,491, according to the report. The study found that for every Rs 1 crore of output produced in the non-alcoholic beverage industry, 8.9 more jobs are created in the economy, both directly and indirectly.

The report reinstates that India has abundant raw material and labour availability, but the sector needs the right policy impetus to grow exponentially. Foreign investment inflows are currently around 1%, which is well below what is needed to reach $17 trillion by 2047.

The report recommends that the government should focus on enhancing farmers’ income by using fruit pulp/puree/juices and examine taxes on fruit-based beverages and juices. The report proposes reducing the tax on fruit pulp/puree-based goods from 12% to 5% to stimulate the expansion of the Indian juice/beverage business and farmers.

In addition, the report further recommends, that in the Union Budget of 2023-24, taxes should be designed in a way that it drives consumers to healthy consumption. There should be nutrition-based taxes, while suggesting that carbonated sugar-based drinks can have the highest GST slab of 28%, but those like carbonated fruit juices with no added sugar or mineral water should be in the lowest tax bracket.

See also  Clip announces the promotion of Brian Bailey to President

Commenting on the report, Suman Bery, vice-chairman, NITI Aayog emphasised that the government and the industry should work together to encourage further innovation in the sector and reduce wastage in supply chain while enhancing farmers’ incomes.

Sudhanshu Pandey, secretary, ministry of consumer affairs, food & public distribution, said: “It’s heartening to see many global and domestic companies, including start-ups investing in this sector. Further lowering of taxation will promote greater participation by the organised part of the industry. This will help realise the true potential of the sector.”

Jagadish Prasad Meena, secretary-general, Indian Beverage Association (IBA), said with increasing agricultural diversification and demand-side push factors, India has the potential to be the world leader in beverages processing through enabling policies and fiscal incentives.

According to Deepak Mishra, director and chief executive, Icrier, while India is the largest global producer of several raw materials used in the manufacturing of non-alcoholic beverages, around 25-30% of the fruits and vegetables grown in this country are still wasted in the supply chain. “We are far behind other developing countries in exports of beverages. For example, in 2020, we were the 59th global exporter of fruit and vegetable juices, while Brazil ranked first. With the PLI scheme and other incentives, there is scope to enhance the domestic manufacturing capacity and exports.”

Leave a Reply

Your email address will not be published. Required fields are marked *