Hot Drinks in India

HOT DRINKS IN INDIA
Euromonitor International
April 2017
HOT DRINKS IN INDIA Passport I
LIST OF CONTENTS AND TABLES

Executive Summary ..................................................................................................................... 1
Demonetisation Hits Informal Sales of Tea ............................................................................... 1
Consumers Trade Up As Disposable Income Levels Rise ....................................................... 1
Leading Players Continue To Gain Share ................................................................................ 1
Consumers Increasingly Demanding With Players Keen To Respond ..................................... 1
Growth Rates Slow Slightly in Forecast Period Due To Higher Sales Base ............................. 1
Key Trends and Developments .................................................................................................... 1
Demonetisation Impacts Informal Sales and Open Markets ..................................................... 2
Domestic Producers Concerned About Pan-india Tea Auctions and Gst ................................. 2
Flavour, Convenience and Health Move To Foreground As Incomes Rise .............................. 3
Territory Key Trends and Developments ...................................................................................... 4
East and Northeast India .......................................................................................................... 4
North India ................................................................................................................................ 5
South India ............................................................................................................................... 6
West India ................................................................................................................................. 8
Rural Vs Urban Key Trends and Developments ........................................................................... 9
Trends ...................................................................................................................................... 9
Competitive Landscape ............................................................................................................ 9
Prospects ................................................................................................................................ 10
Market Data ................................................................................................................................ 10
Table 1 Sales of Hot Drinks by Retail vs Foodservice: % Volume Breakdown
2011-2016 .................................................................................................. 10
Table 2 Sales of Hot Drinks by Retail vs Foodservice: % Volume Growth
2011-2016 .................................................................................................. 10
Table 3 Retail Sales of Hot Drinks by Category: Volume 2011-2016 ...................... 11
Table 4 Retail Sales of Hot Drinks by Category: Value 2011-2016 ......................... 11
Table 5 Retail Sales of Hot Drinks by Category: % Volume Growth 2011-2016 ..... 11
Table 6 Retail Sales of Hot Drinks by Category: % Value Growth 2011-2016 ........ 11
Table 7 Foodservice Sales of Hot Drinks by Category: Volume 2011-2016 ............ 12
Table 8 Foodservice Sales of Hot Drinks by Category: % Volume Growth
2011-2016 .................................................................................................. 12
Table 9 Total Sales of Hot Drinks by Category: Total Volume 2011-2016 .............. 12
Table 10 Total Sales of Hot Drinks by Category: % Total Volume Growth 2011-
2016 ........................................................................................................... 12
Table 11 NBO Company Shares of Hot Drinks: % Retail Value 2012-2016.............. 12
Table 12 LBN Brand Shares of Hot Drinks: % Retail Value 2013-2016 .................... 13
Table 13 Penetration of Private Label in Hot Drinks by Category: % Retail
Value 2011-2016 ........................................................................................ 14
Table 14 Retail Distribution of Hot Drinks by Format: % Volume 2011-2016 ............ 14
Table 15 Retail Distribution of Hot Drinks by Format and Category: % Volume
2016 ........................................................................................................... 15
Table 16 Forecast Sales of Hot Drinks by Retail vs Foodservice: % Volume
Breakdown 2016-2021 ............................................................................... 15
Table 17 Forecast Sales of Hot Drinks by Retail vs Foodservice: % Volume
Growth 2016-2021 ..................................................................................... 16
Table 18 Forecast Retail Sales of Hot Drinks by Category: Volume 2016-2021 ....... 16
Table 19 Forecast Retail Sales of Hot Drinks by Category: Value 2016-2021 .......... 16
HOT DRINKS IN INDIA Passport II
Table 20 Forecast Retail Sales of Hot Drinks by Category: % Volume Growth

2016-2021 .................................................................................................. 16
Table 21 Forecast Retail Sales of Hot Drinks by Category: % Value Growth
2016-2021 .................................................................................................. 17
Table 22 Forecast Foodservice Sales of Hot Drinks by Category: Volume 2016-
2021 ........................................................................................................... 17
Table 23 Forecast Foodservice Sales of Hot Drinks by Category: % Volume
Growth 2016-2021 ..................................................................................... 17
Table 24 Forecast Total Sales of Hot Drinks by Category: Total Volume 2016-
2021 ........................................................................................................... 17
Table 25 Forecast Total Sales of Hot Drinks by Category: % Total Volume
Growth 2016-2021 ..................................................................................... 18
Sources ...................................................................................................................................... 18
Summary 1 Research Sources ...................................................................................... 18
HOT DRINKS IN INDIA Passport 1
HOT DRINKS IN INDIA

EXECUTIVE SUMMARY
Demonetisation Hits Informal Sales of Tea

Informal sales of unpackaged tea were hit hard by demonetisation at the start of November
2016, with this resulting in cash shortages across the country. This benefited sales of tea,
resulting in many consumers trading up from unpackaged products to branded tea. In addition,
supermarkets and hypermarkets benefited from a shift away from open markets and informal
channels. Independent small grocers however remained resilient, thanks to many outlets
beginning to accept mobile payments.
Consumers Trade Up As Disposable Income Levels Rise

Rising disposable income levels are continuing to benefit consumers in India and encouraging
many to trade up. In addition to the shift from unpackaged to packaged tea, there was also a
shift from loose tea to tea bags, while premium green tea saw sales soar from a low base.
Within fresh ground coffee, the leading brands are also seeing a strong performance, while
Horlicks is seeing sales soar in "other" hot drinks thanks to a strong nutritional positioning.
Leading Players Continue To Gain Share

Leading players Hindustan Unilever, GlaxoSmithKline and Tata Global Beverages together
account for a dominant value share in hot drinks. These players continued to gain share in
2016, benefiting from strong marketing support and new product development. These players
are also benefiting from rising disposable income levels, enabling more consumers to trade up
to their well-regarded brands.
Consumers Increasingly Demanding With Players Keen To Respond

New product development focused primarily on health, flavour and/or convenience in 2016,
with players becoming increasingly proactive at catering to consumer demand. There was heavy
consumer research prior to the launch of products such as Tata Coffee Grand and Wagh Bakri's
Mili Tea, with these aiming for optimum flavour and aroma. Health-focused launches included
Tata's Ayurvedic Teaveda tea and Horlicks Growth+, with the latter positioned as aiding
children's healthy development.
Growth Rates Slow Slightly in Forecast Period Due To Higher Sales

Base
Good growth is set to continue in the forecast period, thanks to rising disposable income
levels and growing consumer sophistication. The ongoing expansion of modern grocery retailers
across the country will also offer many consumers access to a widening range of brands and
products. Growth rates will however slow slightly in comparison to the review period due to a
higher sales base and an increase in price competition, with affordable domestic brands
continuing to expand their distribution reach.
KEY TRENDS AND DEVELOPMENTS
Demonetisation Impacts Informal Sales and Open Markets

On 8 November 2016, the Indian government announced that all INR500 and INR1,000
banknotes would be demonetised, with these worth the equivalent of around USD7.50 and
US15 respectively. This was a surprise announcement, with the government keen to avoid
terrorists and criminals from preparing for the move and thus to reduce the shadow economy
and the number of counterfeit notes in operation. However, this demonetisation impacted 86%
of the country's currency and hit many of the country's poorest consumers the hardest. Initially
consumers were given a window of 50 days to deposit demonetised banknotes, although all
exchanges were abruptly stopped before this date and maximum sums per person per day
fluctuated during this time. Many were forced to repeatedly queue on a daily basis in order to
exchange or deposit saved money. Many faced cash shortages, with ATMs repeatedly running
out of cash in many areas.
For hot drinks, demonetisation however offered some benefits, mainly for tea. Informal sales
of tea largely ground to a halt towards the end of the review period, resulting in 2016 seeing the
strongest retail volume growth of the review period at almost 5%. The review period as a whole
had seen a steady shift from unpackaged to packaged tea, thanks to rising disposable income
levels and a growing focus on quality and hygiene. This trend was also supported by many
smaller players shifting their focus towards branded packaged tea, with a widening range of
affordable options becoming available. The use of affordable sachet packs is also encouraging
a shift to packaged tea, particularly in rural areas. However, this shift became considerably
stronger following demonetisation. Demonetisation also impacted cash-based distribution
channels in 2016, with open markets losing share to supermarkets and hypermarkets as a result
of modern grocery retailers' ability to accept financial cards. Independent small grocers were
less impacted, however, largely thanks to most beginning to adopt Paytm and thus accepting
mobile payments.
Outlook
The impact of demonetisation is likely to linger into the forecast period, resulting in an ongoing
shift from cash to card and mobile payments. Many independent small grocers and consumers
had little interest in making this shift prior to demonetisation. They were however forced to
swiftly adapt in November 2016 due to cash shortages. These consumers and retailers will
however continue to both accept and make card and mobile payments in the forecast period,
having now recognised the convenience and ease offered by these payments. This trend is
however unlikely to result in independent small grocers losing their dominant position in sales of
hot drinks, due to many of these stores beginning to accept both card and mobile payments at
the end of the review period.
The shift from unpackaged to packaged tea is also expected to continue in the forecast
period, having been given a major boost by the impact of demonetisation on India's informal
economy. Many consumers were already questioning the safety and quality of unpackaged tea
and the forecast period is expected to see an ongoing shift to packaged products as a result.
This shift is expected to be further encouraged by an ongoing rise in disposable income levels.
Domestic Producers Concerned About Pan-india Tea Auctions and Gst

The end of the review period saw India seeking to move towards more unified trade
procedures and taxation for the country as a whole. In June 2015, the government amended the
Tea Marketing Control Order (2003), making it mandatory for tea producers to sell a share of
their annual produce via pan-India public auctions. While this level was initially set at 70%, it
was subsequently reduced to 50%, with the first auctions taking place in June 2016. The first
auctions did not however run smoothly, partly due to the chaotic taxation system in place across
India, with most states running diverging tax regimes. The Tea Board also faced criticism for
inflexibility, particularly its ruling that smaller lots cannot be split, while the system's software
also proved unreliable. Payment systems in particular proved difficult to operate, with these
subsequently being suspended in mid-October with a return to earlier payment procedures.
Prior to this suspension, many however faced difficulties in obtaining orders or obtaining
payment, with this putting pressure on both tea producers and distributors. Many lots also failed
to sell at auction, further putting pressure on producers.
The impact of diverging tax systems on pan-India tea auctions should however ease in the
forecast period, following the introduction of GST (Goods and Services Tax). Many Indian tea
players are however also concerned about the impact of GST on prices. The Indian Tea
Association (ITA) and the United Planters' Association of Southern India lobbied heavily in 2016
for tea to be classed as a product of mass consumption, thus seeing 5% GST rather than the
higher band of 12% GST. If this higher band is imposed, this would increase the price of tea by
around 5-6%, thus impacting demand and potentially resulting in a shift back towards
unpackaged tea among low-income consumers.
Outlook
The GST continued to move further towards law in early-2017, with April seeing crucial bills
passed on schedule for a GST implementation date of July 2017. A four-tier GST thus looks set
to be introduced. The impact of GST on hot drinks is likely to depend on the classification of
these products. Many industry observers expect most hot drinks to face the lowest level of GST
at 5%, which would probably result in an overall price drop of around 1% for tea. Some tea
players have already stated they will welcome GST. Wagh Bakri, a company that focuses on
blending and packaging tea, has stated that GST will offer it considerably more flexibility in its
infrastructure. A uniform tax rate will enable this company to select locations based on logistical
advantages, rather than being influenced by local taxation systems. This company is thus
planning heavy investment in its production facilities if GST is passed
However, the classification of tea and hot drinks overall in the lowest GST tier has not yet
been confirmed by the government and widespread consumption of a product is no guarantee of
a low tax rate. Carbonates are likely to be classified at the highest tax rate of 28%, despite a
wide appeal. It is possible that sweetened hot drinks may also be penalised, which could impact
instant coffee and "other" hot drinks. However, GlaxoSmithKline and Mondelez's repositioning of
malt-based hot drinks as an aid to preventing malnutrition and ensuring healthy development for
children could well prevent this product area from being impacted.
Flavour, Convenience and Health Move To Foreground As Incomes

Rise
With rising disposable income levels and a growing mid-income group, consumers are
increasingly sophisticated in their demands when it comes to hot drinks. The leading players are
in turn keen to cater to such demands by offering value-added products, with these not only
offering them a competitive advantage but also generally higher profit margins. New product
development towards the end of the review period thus increasingly shifted the focus from value
to flavour, convenience and health.
Nescaf Sunrise Insta-Filter for example sought to marry the flavour and provenance of fresh
ground coffee with the convenience of instant coffee, using beans hand-picked in Coorg and
Chikmagalur and claiming a filter coffee flavour. Tata Coffee Grand is another new instant
coffee brand with a strong focus on flavour, also using South Indian coffee beans and
developed following extensive consumer research with a focus on appealing to young adults
and mid- to high-income professionals. Within tea, Wagh Bakri's Mili Tea was also launched
after heavy investment in consumer research and aims to meet three key consumer demands in
tea, with a strong flavour, bright colour and attractive fragrance.
Tea and "other" hot drinks also saw a strong health and wellness focus. Tata launched
Ayurvedic range Teaveda in November 2016, with this offering the more specialised Pro Energy
and Pro Woman variants in tea bags. Within malt-based hot drinks, GlaxoSmithKline's Horlicks
was relaunched in May 2016 with the claim of "2X Immuno Nutrients" and higher levels of
vitamin D and selenium. This month also saw the launch of Horlicks Growth+, which is clinically
proven to aid healthy weight gain and growth among shorter and leaner children aged 3-9-
years-old. GlaxoSmithKline also relaunched Boost with the claim "Scientifically proven to give
3X more stamina."
Outlook
India is expected to see ongoing economic growth in the forecast period, with consumers thus
likely to become increasingly sophisticated and demanding in their product preferences. The
leading players will thus continue to compete by offering distinctive new products, with health
and flavour likely to remain the main areas of competition. February 2017 for example saw Tata
launch the Tetley Super Green Teas range, with Tetley Super Green Tea Boost containing 10%
of the recommended daily amount (RDA) of vitamin B6 and claiming "Helps reduce tiredness
and fatigue." Tetley Super Green Tea Immune contains 20% of the RDA of vitamin C and claims
"Helps support your immune system."
Among low- to mid-income consumers, a focus on convenience and flavour will result in
consumers trading up from unpackaged tea to brands. Within packaged tea, there will be a
trading up from economy tea dust to whole leaf tea among low-income consumers. Mid-income
consumers will in turn trade up from loose tea to tea bags and will increasingly explore premium
green tea due to its healthy image. Within coffee, there will also be trading up with a focus on
flavour. There is thus likely to be a race among the leading players to offer instant coffee that
mimics fresh ground coffee in its flavour and aroma.
TERRITORY KEY TRENDS AND DEVELOPMENTS
East and Northeast India
Trends
East and Northeast India is home to many of India's main tea-producing states, including
Assam and West Bengal. However, this also results in the supply of unbranded and
unpackaged tea being strong in the region, with many smaller tea producers offering
unpackaged products locally. Lower average income levels in the region also result in many
seeking the most affordable options within hot drinks, thus opting for unpackaged products.
Furthermore, the ability to buy from local producers results in consumers having more trust in
the quality and safety of unpackaged tea in comparison to many of those living in other
regions.
Tea remains by far the most popular hot drink in this region and for much of the review period
was showing signs of maturity. Many of those consumers keen to trade up to tea had already
done so, while others remained traditional and highly price-sensitive, thus continuing to opt for
unpackaged tea. Demonetisation in November 2016 however offered packaged tea an
unexpected boost, with this having a heavy impact on the informal economy and resulting in a
shift towards packaged hot drinks. With income levels remaining low, this particularly
benefited affordable sachet packs across hot drinks.
Competitive Landscape
Shares of hot drinks are relatively fragmented in East and Northeast India. This is partly due
to the stronger share of tea sales in the region but is also due to the vast number of players
operating in this area. Tata is the leading player in hot drinks in this region, benefiting from its
wide distribution reach and affordable pricing. Other regional tea producers are also stronger
in this region than in overall sales, such as Goodricke, which is particularly strong in Kolkata.
Leader Tata is thus considerably stronger in East and Northeast India than it is in the country
as a whole, where it ranked third at the end of the review period. Low average income levels
and more traditional attitudes result in less interest in global brands, with this hindering
Hindustan Unilever's Brooke Bond and GlaxoSmithKline's Horlicks. The latter brand however
saw a strong performance towards the end of the review period, thanks to its focus on
consumer health marketing focused on infant nutrition. Horlicks also launched affordable
INR10 sachets in the region towards the end of the review period, while GlaxoSmithKline also
increasingly enlisted rural women in the region as direct selling representatives.
Prospects
East and Northeast India is expected to benefit from a stronger economic performance in the
forecast period, with the country's leading political parties increasingly prioritising its economic
development in the run-up to 2017 elections. This region is thus likely to see strong
investment in the forecast period, which will in turn result in rising disposable income levels for
many consumers and enable stronger spending on hot drinks. Many consumers are thus
likely to trade up from unpackaged to packaged products, particularly as many local tea
producers are also shifting their focus to branded tea.
East and Northeast India is thus set to see a stronger performance in hot drinks in the
forecast period. In addition to rising disposable income levels, a growing focus on health and
nutrition is also expected to benefit malt-based hot drinks in this region. Brands such as
Horlicks are increasingly regarded as important in aiding the healthy development of children.
Sales growth for hot drinks will also continue to be driven by the ongoing development of
modern retailing, with supermarkets and hypermarkets continuing to open across the region.
Sales of hot drinks will however continue to be constrained by a number of factors in the
forecast period, including lower average income levels and more traditional attitudes. Many
consumers will continue to have a strong preference for regionally-produced tea, which could
hinder the uptake of global brands and coffee. The major shift impacting hot drinks is thus
likely to be from unpackaged tea from small regional producers to packaged tea from larger
regional producers.
North India
Trends
North India is seeing a rapid shift from unpackaged to packaged tea, with this driven by strong
expansion for modern grocery retailers. The leading supermarkets and hypermarkets have a
strong and growing presence in the region, with consumers thus having access to a wide
range of brands and products in tea. This trend is also being driven by the importance of tea
in many consumers' lives, with regular tea breaks being popular across all consumer groups.
Consumers are thus often willing to trade up within tea as disposable income levels rise, in
search of greater quality.
While tea is benefiting from the shift towards packaged products, coffee is also seeing
growing interest in North India. Consumption levels remain considerably lower in comparison
to the south of the country, due to the well-established appeal of tea. However, specialist
coffee shops are seeing sales and numbers rise rapidly in cities in North India and many
consumers are increasing attracted by coffee in consumer foodservice, particularly as tea is
more linked to at-home consumption. Many of those enjoying coffee in specialist coffee shops
are furthermore beginning to try coffee at home, with this particularly true of young adults in
major cities.
The strength of tea and a preference for trusted leading brands result in Tata and Hindustan
Unilever being the leading players in hot drinks in North India. Tata Tea is the leading brand in
the region, followed by Brooke Bond. Tea is however a crowded product area, encompassing
a wide range of domestic and multinational players, including some regional players. Leading
regional tea players in North India include Mohini, Marvel and Today, with these benefiting
from a strong and widening distribution presence and established brand awareness among
local consumers.
Instant coffee brands saw a strong growth in North India towards the end of the review period,
including Hindustan Unilever's Bru and Nestl's Nescaf. Bru is performing well thanks to its
reputation for a rich flavour and aroma, although Nescaf remains the leading brand in instant
coffee and also benefited from its launch of Nescaf Sunrise Insta-Filter in 2016, which is
positioned as offering the flavour of fresh ground coffee and the convenience of instant coffee.
This launch is expected to prove popular in the region, with many focused on coffee flavour
while being reluctant to put time and effort into preparing coffee.
Nescaf Sunrise Insta-Filter could however face strong competition from Tata Coffee Grand.
This was launched towards the end of 2015 and benefited from innovative marketing support
in 2016, with this blending traditional South Indian culture with western hip-hop elements. This
positioning is likely to appeal to fashionable young adults in major cities in the region.
Prospects
Coffee is expected to see a strong performance in North India in the forecast period, with
many young adults viewing this as a more modern drink in comparison to tea. The growing
popularity of specialist coffee shops will result in many linking coffee with socialising and
leisure, while the widening presence of vending coffee in workplaces will also increase
exposure to this drink. Fresh ground coffee is expected to see a strong performance in
foodservice volume terms, while at home most consumers will opt for convenient instant
coffee. Variants that blur the boundaries between fresh ground coffee and instant coffee could
see particularly strong growth, such as Nescaf Sunrise Insta-Filter.
While coffee is likely to see a good performance in the forecast period, North India will remain
a predominantly tea-consuming region. Tea has an established role in most consumers' lives
and this is unlikely to change, even with growing interest in coffee. Overall sales growth in the
forecast period will mainly be driven by an ongoing shift from unpackaged to packaged tea, as
disposable income levels rise and consumers seek higher quality. The ongoing expansion of
modern grocery retailers in the region will also enable many consumers to access a widening
range of brands, products and prices within tea, including private label options.
South India
Trends
Filter coffee is widely popular in South India, with arabica and robusta beans growing in a
number of states. South India thus continues to drive growth for fresh ground coffee, with
consumers in this region having a strong focus on quality. This focus is increasing as
disposable income levels continue to rise and consumers gain access to a widening range of
brands and products. However, specialist coffee shops are posing considerable competition
to retail volume sales in this region, being an increasingly popular venue for socialising and
attracting many by offering distinctive and elaborate coffee drinks. Sweet cold coffee drinks
are popular and viewed by many as bridging a gap between coffee and dessert.
South India is home to a number of India's wealthiest cities and has well-developed modern
grocery networks, with a strong presence for supermarkets and hypermarkets. Consumers
thus have access to a wide range of options across hot drinks. As disposable income levels
continue to rise, these consumers are trading up to premium and value-added options. Within
tea, there was for example a strong shift from loose tea to tea bags. Within coffee, leading
brands are continuing to gain share. Within "other" hot drinks, malt-based hot drinks brands
with a stronger nutritional positioning such as Horlicks are seeing the strongest performance.
Strong global and national brands lead sales of hot drinks in South India, thanks to large mid-
to high-income groups and the widespread presence of modern grocery retailers. Leading
brands include Tata Tea, Horlicks and Brooke Bond. Hindustan Unilever's Bru benefits from
its strength in fresh ground coffee, which sees strong sales in the region, although it faces a
challenge from established regional brands.
There are a number of strong coffee and tea producers based in South India, with these
attracting many due to their regional provenance. Significant regional players in coffee include
Cothas Coffee and Narasu's Coffee, with these enjoying established trust in the flavour and
aroma of their blends. These players also benefit from their reputation for offering high-quality
South Indian coffee and are strong in overall fresh ground coffee, ranking second and fifth in
national sales. Leading regional tea producers include Harrisons Malayalam and Joonktollee,
although these companies primarily focus on supplying unpackaged and unbranded tea to
blenders.
Private label is seeing strong share gains in South India. This region has a number of strong
supermarkets and hypermarkets, with many of these emerging from small family-run chains
such as Ratnadeep and MK Retail and also increasing their focus on private label. Smaller
cities and towns are seeing strong development for modern grocery retailers, with many
consumers in these areas attracted by the lower price and good quality of private label
options.
Prospects
Consumers in South India will continue to trade up in the forecast period, as the region
continues to benefit from economic growth. This trend will also be encouraged by the ongoing
expansion of modern grocery retailers, with these outlets not only offering a wide choice to
consumers but also often encouraging trading up by offering attractive price promotions.
There is thus likely to be an ongoing shift from loose tea to tea bags in tea and towards the
leading brands in fresh ground coffee.
There is however unlikely to be a strong shift from fresh ground coffee to instant coffee or
from regional to national brands in the former area. Many of those in South India are proud of
the quality of coffee produced in the region. This pride is likely to intensify further in the
forecast period as national and global brands increasingly utilise South Indian coffee beans in
their products. The main launches in coffee towards the end of the review period all contained
South Indian coffee beans, including Nescaf Sunrise Insta-Filter and Tata Coffee Grand in
instant coffee and ITC Sunbean Gourmet Coffee in fresh ground coffee.
Private label is likely to continue to pose strong competition to leading brands in hot drinks in
the forecast period. Many regional chains are pushing for a widening presence in
supermarkets and hypermarkets, with these chains likely to use attractive and affordable
private label ranges in order to differentiate themselves. It is likely that regional chains will join
forces with South Indian tea and coffee producers in order to offer products with a strong
regional provenance, with these in turn likely to attract many consumers in the region.
West India
Trends
West India is home to a many of India's wealthiest consumers, with large mid- to high-income
groups thanks to high average salaries in many cities. Among these consumers, there is a
growing focus on health and wellness, with many consumers particularly interested in natural
health. This trend particularly benefited tea with a health and wellness positioning, with green
tea seeing sales soar in the region towards the end of the review period. Fortified/functional
black tea is also performing well, particularly if it also offers Ayurvedic credentials. Tata
benefited from its launch of Ayurvedic range Teaveda in November 2016, with this containing
herbs such as brahmi and tulsi and offering the specialised Pro Energy and Pro Woman
variants.
Events marketing is often focused on major cities in West India, particularly Mumbai, with
these events subsequently gaining a national reach via TV advertising or social media
platforms such as YouTube and Facebook. 2016 saw Brooke Bond's Taste of Togetherness
event at Mumbai Churchgate Station, with visitors finding themselves unexpectedly taking tea
with sex workers. Mumbai was also the location for Tata's Tetley Super Green Teas mass
Zumba event at the start of 2017, with this gaining a Guinness World Record for the largest
gathering of people wearing capes and promoting the brand's "Everyday Super Humans"
slogan. Consumers' openness and sophistication makes this region the obvious choice for
such innovative forms of events marketing.
The leading players in West India are the same as those that lead hot drinks overall in India:
Hindustan Unilever, GlaxoSmithKline and Tata. Relatively high average incomes mean that
consumers in this region are able to afford the leading brands and are happy to pay more for
their perceived quality. Premium options from these players' brands tend to perform
particularly well in West India due to consumers' sophistication and affluence, such as
Hindustan Unilever's Bru Select Premium Filter in fresh ground coffee. There is also a strong
interest in variants with a healthy positioning, such as Women's Horlicks or Brooke Bond
Natural Care.
Consumers in West India are often more adventurous in their choices than those in other
regions, with higher disposable income levels encouraging impulse purchases while grocery
shopping. Many product areas saw growing fragmentation as a result. Premium green tea for
example performed strongly in 2016, with organic brands such as Conscious CCC performing
well. Within fresh ground coffee, there was also growing interest in the premium products
offered by specialist coffee shops, such as Caf Coffee Day Mysore Royal.
Wagh Bakri is one of the strongest regional players in West India, benefiting from its strong
distribution and wide product range. This company is also proving adept at catering to the
highly demanding consumer requirements seen in the region. Mili Tea. launched by the
company in August 2016, was developed in response to extensive consumer research and
aims to address three key requirements in tea: a strong taste, bright colour and noticeable
fragrance.
Prospects
West India is expected to see strong economic and demographic growth in the forecast
period, with this region thus likely to remain a key driver of growth for overall hot drinks.
Further growth in disposable income levels will in turn result in consumers becoming even
more demanding within hot drinks. An established focus on convenience, quality, flavour and
health is thus likely to intensify further in the forecast period.
Percentage growth rates may slow slightly in the forecast period, due to greater sales maturity
in this region. However, this region will continue to drive growth for value-added and premium
products and will thus remain the main focal area for new launches and marketing. There
appear to be few potential constraints to sales growth in the region, other than already high
sales in key areas such as fresh ground coffee and loose black standard tea.
RURAL VS URBAN KEY TRENDS AND DEVELOPMENTS
Trends
Internet retailing is proving increasingly popular in urban India, with app-based mobile
shopping in particular seeing strong growth in grocery sales. Many urban consumers are keen
to embrace new technology, particularly if it offers them convenience and money-saving.
Many grocery retailers offered heavy discounts on app purchases towards the end of the
review period, with a growing number of urban consumers thus buying hot drinks via
smartphones. This trend further intensified in late-2016 due to the impact of demonetisation
and ensuing cash shortages.
Rural consumers were heavily impacted by demonetisation at the end of 2016, with many
being largely reliant on informal retailing in order to shop. Demonetisation and cash shortages
however resulted in a growing number shopping via formal retailing channels, with this mainly
benefiting independent small grocers. A shift away from informal retailing channels
furthermore resulted in a shift away from unpackaged products, primarily within tea,
supporting strong sales growth for packaged tea at the end of the year. Demonetisation had a
heavy impact on many rural consumers' disposable income levels, however, with this
encouraging a strong shift back towards affordable sachet packs.
The leading players to succeed in rural areas are those that have adapted their pricing,
distribution and packaging strategies to meet rural needs. GlaxoSmithKline, Hindustan
Unilever and Tata Global Beverages all benefit from offering low-priced sachet packs in rural
areas, with these easy to distribute and affordable to low-income rural consumers.
Independent small grocers in rural areas are also more willing to stock sachet packs, with
sachet rolls requiring little space and often hung dangling for easy access.
The end of 2016 saw a strong growth in rural sales of tea dust, due to the impact of
demonetisation and ensuing cash shortages. As a result, many struggled to buy the
unpackaged tea that they would normally buy in rural areas. Tea dust is one of the more
affordable product areas in hot drinks and is also available in small low-priced packs, with
Tata Tea Agni Dust attracting many consumers towards the end of the year.
2016 also saw a surge of interest in malt-based hot drinks in rural areas. This was fuelled by
GlaxoSmithKline's marketing, with strong emphasis on the role of Horlicks in preventing
malnutrition. A growing number of rural consumers are thus keen to ensure that their children
consume Horlicks once or twice daily as a health safeguard. Many rural consumers remain
highly traditional in their preferences and purchasing decisions but their children's health is a
key concern, with many willing to invest in Horlicks as a result.
Prospects
Internet retailing mainly attracted urban consumers at the end of the review period but could
well see surging demand among rural consumers and those living in smaller towns in the
forecast period. This trend is likely to be driven by a surge in the ownership of smartphones in
rural areas, with this in turn being supported by improved rural network connectivity, rising
disposable income levels and improved education levels. Rural consumers are thus likely to
become increasingly attracted by m-commerce, particularly via easy-use apps, with mobile
payments also set to become increasingly significant for this group. Many rural consumers
remained reluctant to pay other than via cash for much of the review period. However,
demonetisation in late-2016 resulted in a growing number trying out mobile payments for the
first time.
There is likely to be significant convergence between urban and rural consumers in terms of
purchasing patterns in the forecast period. Rural consumers are likely to become increasingly
interested in nutrition and quality, with this shaping their preferences in hot drinks. Malt-based
hot drinks are for example likely to benefit from their highly nutritional image, particularly given
the strong nutritional focus of marketing for leading brands such as Horlicks. Within tea, there
is also likely to be growing interest in the leading brands. However, while rural consumers are
likely to become increasingly aspirational in their brand preferences, these consumers will
remain more cost-conscious than urban consumers, with low-priced sachets thus likely to
retain stronger sales in rural areas. Rural consumers will also remain more likely to prefer
domestic brands, particularly as domestic tea players focus on offering high-quality products
and packaging.
MARKET DATA
Table 1 Sales of Hot Drinks by Retail vs Foodservice: % Volume Breakdown 2011-
2016
% volume analysis
2011 2012 2013 2014 2015 2016
Retail 78.9 79.2 79.5 79.8 80.2 80.5

Foodservice 21.1 20.8 20.5 20.2 19.8 19.5
Total 100.0 100.0 100.0 100.0 100.0 100.0
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
store checks, trade interviews, trade sources
Table 2 Sales of Hot Drinks by Retail vs Foodservice: % Volume Growth 2011-2016
% volume growth
2015/16 2011-16 CAGR 2011/16 TOTAL
Retail 5.5 5.1 28.5
Foodservice 3.2 3.1 16.4

Total 5.0 4.7 25.9
Table 3 Retail Sales of Hot Drinks by Category: Volume 2011-2016
'000 Tonnes
2011 2012 2013 2014 2015 2016
Coffee 43.4 46.3 49.4 52.6 55.7 59.1

Tea 259.6 269.8 280.1 290.8 303.6 317.8
Other Hot Drinks 155.2 165.1 175.8 186.0 198.7 211.7
Hot Drinks 458.2 481.2 505.2 529.4 557.9 588.6
Table 4 Retail Sales of Hot Drinks by Category: Value 2011-2016
INR million
2011 2012 2013 2014 2015 2016
Coffee 20,802.0 24,211.1 28,287.7 32,874.4 36,622.4 39,324.8

Tea 76,704.3 91,768.0 107,791.2 126,015.7 144,730.8 165,263.4
Other Hot Drinks 41,253.0 46,014.3 52,708.1 59,652.3 66,345.5 73,179.1
Hot Drinks 138,759.2 161,993.4 188,787.0 218,542.4 247,698.7 277,767.2
Table 5 Retail Sales of Hot Drinks by Category: % Volume Growth 2011-2016
% volume growth
2015/16 2011-16 CAGR 2011/16 Total
Coffee 6.0 6.3 36.0

Tea 4.7 4.1 22.4
Other Hot Drinks 6.6 6.4 36.4
Hot Drinks 5.5 5.1 28.5
Table 6 Retail Sales of Hot Drinks by Category: % Value Growth 2011-2016
% current value growth

2015/16 2011-16 CAGR 2011/16 Total
Coffee 7.4 13.6 89.0

Tea 14.2 16.6 115.5
Hot Drinks 12.1 14.9 100.2
Table 7 Foodservice Sales of Hot Drinks by Category: Volume 2011-2016
'000 Tonnes
2011 2012 2013 2014 2015 2016
Coffee 6.3 6.8 7.4 8.1 8.8 9.6

Tea 113.7 116.8 119.9 123.0 126.5 130.0
Other Hot Drinks 2.4 2.5 2.6 2.7 2.8 2.9
Hot Drinks 122.4 126.2 129.9 133.8 138.1 142.6
Table 8 Foodservice Sales of Hot Drinks by Category: % Volume Growth 2011-2016
% volume growth
2015/16 2011-16 CAGR 2011/16 Total
Coffee 9.2 8.8 52.3

Tea 2.8 2.7 14.4
Hot Drinks 3.2 3.1 16.4
Table 9 Total Sales of Hot Drinks by Category: Total Volume 2011-2016
'000 Tonnes
2011 2012 2013 2014 2015 2016
Coffee 49.8 53.1 56.8 60.6 64.6 68.7

Tea 373.2 386.6 400.0 413.8 430.0 447.8
Other Hot Drinks 157.6 167.6 178.4 188.7 201.5 214.6
Hot Drinks 580.6 607.3 635.2 663.1 696.0 731.2
Table 10 Total Sales of Hot Drinks by Category: % Total Volume Growth 2011-2016
% total volume growth

2015/16 2011-16 CAGR 2011/16 Total
Coffee 6.4 6.7 38.0

Tea 4.1 3.7 20.0
Hot Drinks 5.0 4.7 25.9
Table 11 NBO Company Shares of Hot Drinks: % Retail Value 2012-2016
% retail value rsp

Company 2012 2013 2014 2015 2016
GlaxoSmithKline 19.0 18.6 18.2 17.7 17.8

Consumer Healthcare Ltd
Hindustan Unilever Ltd 19.2 18.7 17.8 17.2 16.5
Tata Global Beverages Ltd 15.6 15.2 14.1 13.4 13.1
Nestl India Ltd 5.4 5.5 5.5 5.5 5.3
Mondelez India Foods Ltd - - 3.4 3.4 3.6
Wagh Bakri Ltd 3.9 3.8 3.6 3.5 3.6
Twinings Pvt Ltd 0.8 0.8 0.9 0.9 0.9
Amar Tea Pvt Ltd 0.9 0.9 0.9 0.9 0.9
Narasu's Coffee Co 0.8 0.8 0.8 0.8 0.8
Goodricke Group Ltd 0.8 0.8 0.8 0.8 0.8
Girnar Food & Beverages 0.5 0.5 0.5 0.5 0.5
Pvt Ltd
Cosmic Nutracos 0.1 0.2 0.2 0.3 0.3
Solutions Pvt Ltd
Duncans Industries Ltd 1.3 1.1 1.1 0.3 0.2
Amalgamated Bean Coffee 0.3 0.3 0.2 0.2 0.2
Trading Co Ltd
Tata Coffee Ltd 0.2 0.2 0.1 0.1 0.1
Cothas Coffee Co 0.1 0.1 0.1 0.1 0.1
Cadbury India Ltd 3.5 3.5 - - -
Tata Tea Ltd - - - - -
Private Label 1.5 1.6 1.6 1.6 1.5
Others 26.3 27.5 30.1 33.0 34.0
Total 100.0 100.0 100.0 100.0 100.0
Table 12 LBN Brand Shares of Hot Drinks: % Retail Value 2013-2016
% retail value rsp

Brand (GBO) Company (NBO) 2013 2014 2015 2016
Horlicks GlaxoSmithKline 14.4 14.1 13.7 13.5

(GlaxoSmithKline Plc) Consumer Healthcare Ltd
Tata Tea Tata Global Beverages Ltd 10.4 9.6 8.9 8.6
Nescaf (Nestl SA) Nestl India Ltd 5.5 5.5 5.5 5.3
Brooke Bond Hindustan Unilever Ltd 6.3 5.8 5.5 5.2
(Unilever Group)
Bru (Unilever Group) Hindustan Unilever Ltd 4.6 4.7 4.5 4.5
Brooke Bond Red Hindustan Unilever Ltd 5.6 5.1 4.9 4.5
Label (Unilever
Group)
Wagh Bakri (Gujarat Wagh Bakri Ltd 3.8 3.6 3.5 3.6
Tea Processors &
Packers Ltd)
Cadbury Bournvita Mondelez India Foods Ltd - 3.2 3.2 3.5
(Mondelez
International Inc)
Boost GlaxoSmithKline 3.6 3.5 3.4 3.4
Kanan Devan Tata Global Beverages Ltd 2.5 2.2 2.0 1.9
Tetley Tata Global Beverages Ltd 1.3 1.4 1.6 1.8
Lipton Yellow Label Hindustan Unilever Ltd 1.3 1.2 1.1 1.1
(Unilever Group)
Lipton (Unilever Hindustan Unilever Ltd 0.8 0.8 1.0 1.1
Group)
Twinings Twinings Pvt Ltd 0.8 0.9 0.9 0.9
(Associated British
Foods Plc)
Society Amar Tea Pvt Ltd 0.9 0.9 0.9 0.9
Goodricke Goodricke Group Ltd 0.8 0.8 0.8 0.8
Maltova GlaxoSmithKline 0.4 0.4 0.4 0.6
Narasu's Coffee Narasu's Coffee Co 0.6 0.5 0.6 0.6
Girnar Girnar Food & Beverages 0.5 0.5 0.5 0.5
Pvt Ltd
Gaia Cosmic Nutracos 0.2 0.2 0.3 0.3
Solutions Pvt Ltd
Narasu's Narasu's Coffee Co 0.2 0.2 0.2 0.2
Duncans Duncans Industries Ltd 1.1 1.1 0.3 0.2
Coffee Day Amalgamated Bean Coffee 0.3 0.2 0.2 0.2
Trading Co Ltd
Taj Mahal Tea Hindustan Unilever Ltd 0.1 0.2 0.2 0.2
(Unilever Group)
Viva GlaxoSmithKline 0.2 0.2 0.2 0.2
Cadbury Drinking Mondelez India Foods Ltd - 0.1 0.1 0.1
Chocolate (Mondelez
International Inc)
Mr Bean (Tata Tata Coffee Ltd 0.2 0.1 0.1 0.1
Global Beverages Ltd)
Cothas Coffee Cothas Coffee Co 0.1 0.1 0.1 0.1
Cadbury Bournvita Cadbury India Ltd 3.3 - - -
(Mondelez
International Inc)
Cadbury Drinking Cadbury India Ltd 0.2 - - -
Chocolate (Mondelez
International Inc)
Private label Private Label 1.6 1.6 1.6 1.5
Others Others 28.5 31.0 33.8 34.8
Total Total 100.0 100.0 100.0 100.0
Table 13 Penetration of Private Label in Hot Drinks by Category: % Retail Value 2011-
2016
% retail value rsp

2011 2012 2013 2014 2015 2016
Hot Drinks 1.4 1.5 1.6 1.6 1.6 1.5

Tea 2.6 2.6 2.8 2.8 2.7 2.5
Table 14 Retail Distribution of Hot Drinks by Format: % Volume 2011-2016
% retail volume
2011 2012 2013 2014 2015 2016
Store-Based Retailing 100.0 100.0 100.0 100.0 100.0 100.0

- Grocery Retailers 100.0 100.0 100.0 100.0 100.0 100.0
-- Modern Grocery 16.6 16.8 17.3 17.7 17.9 18.4
Retailers
--- Convenience Stores 1.1 1.1 1.1 1.1 1.1 1.2

--- Discounters - - - - - -
--- Forecourt Retailers 0.1 0.1 0.2 0.2 0.2 0.2
--- Hypermarkets 8.6 8.7 9.0 9.2 9.5 9.7
--- Supermarkets 6.7 6.8 7.0 7.1 7.2 7.3
-- Traditional Grocery 83.4 83.2 82.7 82.3 82.1 81.6
Retailers
--- Food/drink/tobacco - - - - - -
specialists
--- Independent Small 67.8 67.5 67.4 67.4 67.5 67.5
Grocers
--- Other Grocery 15.6 15.7 15.3 14.9 14.5 14.1
Retailers
- Mixed Retailers - - - - - -
- Non-Grocery Specialists - - - - - -
Non-Store Retailing - - - - - -
- Vending - - - - - -
- Homeshopping - - - - - -
- Internet Retailing - - - - - -
- Direct Selling - - - - - -
Total 100.0 100.0 100.0 100.0 100.0 100.0
Table 15 Retail Distribution of Hot Drinks by Format and Category: % Volume 2016
% retail volume
C T OHD
Store-Based Retailing 100.0 100.0 100.0

- Grocery Retailers 100.0 100.0 100.0
-- Modern Grocery Retailers 18.1 17.5 19.9
--- Convenience Stores 1.8 1.4 0.6
--- Discounters 0.0 0.0 0.0
--- Forecourt Retailers 0.2 0.3 0.1
--- Hypermarkets 7.0 9.3 11.0
--- Supermarkets 9.2 6.4 8.2
-- Traditional Grocery Retailers 81.8 82.6 80.1
--- Food/drink/tobacco specialists 0.0 0.0 0.0
--- Independent Small Grocers 74.0 78.1 49.7
--- Other Grocery Retailers 7.8 4.4 30.4
- Mixed Retailers 0.0 0.0 0.0
- Non-Grocery Specialists 0.0 0.0 0.0
Non-Store Retailing 0.0 0.0 0.0
- Vending 0.0 0.0 0.0
- Homeshopping 0.0 0.0 0.0
- Internet Retailing 0.0 0.0 0.0
- Direct Selling 0.0 0.0 0.0
Total 100.0 100.0 100.0
Key: C = coffee; T= tea; OHD = other hot drinks
Table 16 Forecast Sales of Hot Drinks by Retail vs Foodservice: % Volume Breakdown

2016-2021
% volume analysis
2016 2017 2018 2019 2020 2021
Retail 80.5 80.8 81.2 81.4 81.6 81.8

Foodservice 19.5 19.2 18.8 18.6 18.4 18.2
Total 100.0 100.0 100.0 100.0 100.0 100.0
Source: Euromonitor International from trade associations, trade press, company research, trade interviews,
trade sources
Table 17 Forecast Sales of Hot Drinks by Retail vs Foodservice: % Volume Growth

2016-2021
% volume growth
2016/17 2016-21 CAGR 2016/21 TOTAL
Retail 5.2 4.9 27.2

Foodservice 3.0 3.2 17.2
Total 4.7 4.6 25.3
trade sources
Table 18 Forecast Retail Sales of Hot Drinks by Category: Volume 2016-2021
'000 Tonnes
2016 2017 2018 2019 2020 2021
Coffee 59.1 62.3 65.7 69.2 72.9 76.9

Tea 317.8 331.8 346.2 361.2 377.0 393.9
Other Hot Drinks 211.7 224.8 238.0 251.2 264.6 278.2
Hot Drinks 588.6 618.9 649.8 681.6 714.6 748.9
trade sources
Table 19 Forecast Retail Sales of Hot Drinks by Category: Value 2016-2021
INR million
2016 2017 2018 2019 2020 2021
Coffee 39,324.8 41,097.1 42,916.0 44,740.9 46,548.9 48,306.6

Tea 165,263.4 176,242.9 186,534.8 195,312.2 202,769.3 208,469.8
Other Hot Drinks 73,179.1 76,497.0 79,626.2 82,837.0 85,932.8 88,879.2
Hot Drinks 277,767.2 293,836.9 309,077.0 322,890.2 335,251.0 345,655.6
trade sources
Table 20 Forecast Retail Sales of Hot Drinks by Category: % Volume Growth 2016-
2021
% volume growth
2016/17 2016-21 CAGR 2016/21 Total
Coffee 5.5 5.4 30.1

Tea 4.4 4.4 23.9
Hot Drinks 5.2 4.9 27.2

trade sources
Table 21 Forecast Retail Sales of Hot Drinks by Category: % Value Growth 2016-2021
% constant value growth

2016/2017 2016-21 CAGR 2016/21 TOTAL
Coffee 4.5 4.2 22.8

Tea 6.6 4.8 26.1
Hot Drinks 5.8 4.5 24.4
trade sources
Table 22 Forecast Foodservice Sales of Hot Drinks by Category: Volume 2016-2021
'000 Tonnes
2016 2017 2018 2019 2020 2021
Coffee 9.6 10.5 11.5 12.4 13.5 14.5

Tea 130.0 133.3 136.4 140.3 144.7 149.4
Other Hot Drinks 2.9 3.0 3.0 3.1 3.1 3.2
Hot Drinks 142.6 146.8 150.9 155.8 161.3 167.1
trade sources
Table 23 Forecast Foodservice Sales of Hot Drinks by Category: % Volume Growth

2016-2021
% volume growth
2016/17 2016-21 CAGR 2016/21 Total
Coffee 9.0 8.5 50.4

Tea 2.6 2.8 15.0
Hot Drinks 3.0 3.2 17.2
trade sources
Table 24 Forecast Total Sales of Hot Drinks by Category: Total Volume 2016-2021
'000 Tonnes
2016 2017 2018 2019 2020 2021
Coffee 68.7 72.8 77.1 81.6 86.4 91.4

Tea 447.8 465.2 482.6 501.5 521.7 543.3
Other Hot Drinks 214.6 227.7 241.0 254.3 267.7 281.3
Hot Drinks 731.2 765.7 800.7 837.4 875.8 916.1
trade sources
Table 25 Forecast Total Sales of Hot Drinks by Category: % Total Volume Growth
2016-2021
% total volume growth

2016/17 2016-21 CAGR 2016/21 Total
Coffee 6.0 5.9 33.0

Tea 3.9 3.9 21.3
Hot Drinks 4.7 4.6 25.3
trade sources
SOURCES
Sources used during the research included the following:
Summary 1 Research Sources

Official Sources Agricultural & Processed Food Products
Export Development Authority (APEDA)
Agriculture & Agri-Food Canada
Federation of Indian Chambers of Commerce
& Industry
Ministry of Food Processing India
Ministry of Food Processing Industries
Ministry of Food Processing Industry
United States Department of Agriculture
(USDA) Foreign Agricultural Service (FAS)
Trade Associations Assam Trade & Agency
Associated Chambers Of Commerce &
Industry Of India, The
Calcutta Tea Traders Association
Coffee Board of India
Confederation of Indian Food Trade & Industry
Confederation of Indian Industry (CII)
Federation of Biscuit Manufacturers
Association of India
Federation of Indian Chambers & Commerce
of Industry
India Coffee Depot
India Tea Promoters Bureau
Indian Soft Drinks Manufacturers Association
Indian Tea Association
International Copetence Centre for Organic
Agriculture
Kho-Cha Darjeeling Tea Bureau

MOFPI
PHD Chamber of Commerce & Industry
Tea Board of India
UNESDA & CISDA
Trade Press 2point6billion.com
Beverage Digest
Beverage Net
Beverage World
BeverAsia
Business India
Business Line
Business Standard
Business Today
Business World
Capital Market
Catalyst (Business Standard supplement)
Commodity India
Domain-b
Economic Times, The
Equity Master
Express Hotelier & Caterer
Financial Express, The
Food & Beverage News
Food Industry India
Foodandbeverages.in
FoodAsia
Foodbev.com
Free Press Journal
Hindu Business Line, The
Hindu, The
Hindustan Times
I Love India
India Brand Equity Foundation
India Buzz info
India Earnings
India Infoline
India Retailing
India Times
India Today
Indian Express
Indian Industry Tracker
IndianTelevision.com
Live Mint
Mag India
Money Control
NDTV
Outlook Money
Retail Asia
Reuters India
Tea & Coffee Asia
The Financial Express
The Hindu
This week Bangalore
Times Food Processing Journal
Times of India
Tribune, The
Source: Euromonitor International

Hot Drinks in India

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HOT DRINKS IN INDIA

LIST OF CONTENTS AND TABLES

Table 20 Forecast Retail Sales of Hot Drinks by Category: % Volume Growth

HOT DRINKS IN INDIA

Demonetisation Hits Informal Sales of Tea

Consumers Trade Up As Disposable Income Levels Rise

Leading Players Continue To Gain Share

Consumers Increasingly Demanding With Players Keen To Respond

Growth Rates Slow Slightly in Forecast Period Due To Higher Sales

KEY TRENDS AND DEVELOPMENTS

Demonetisation Impacts Informal Sales and Open Markets

Domestic Producers Concerned About Pan-india Tea Auctions and Gst

Flavour, Convenience and Health Move To Foreground As Incomes

TERRITORY KEY TRENDS AND DEVELOPMENTS

East and Northeast India

RURAL VS URBAN KEY TRENDS AND DEVELOPMENTS

Retail 78.9 79.2 79.5 79.8 80.2 80.5

Table 2 Sales of Hot Drinks by Retail vs Foodservice: % Volume Growth 2011-2016

Retail 5.5 5.1 28.5

Foodservice 3.2 3.1 16.4

Table 3 Retail Sales of Hot Drinks by Category: Volume 2011-2016

Coffee 43.4 46.3 49.4 52.6 55.7 59.1

Table 4 Retail Sales of Hot Drinks by Category: Value 2011-2016

Coffee 20,802.0 24,211.1 28,287.7 32,874.4 36,622.4 39,324.8

Table 5 Retail Sales of Hot Drinks by Category: % Volume Growth 2011-2016

Coffee 6.0 6.3 36.0

Table 6 Retail Sales of Hot Drinks by Category: % Value Growth 2011-2016

% current value growth

Coffee 7.4 13.6 89.0

Table 7 Foodservice Sales of Hot Drinks by Category: Volume 2011-2016

Coffee 6.3 6.8 7.4 8.1 8.8 9.6

Table 8 Foodservice Sales of Hot Drinks by Category: % Volume Growth 2011-2016

Coffee 9.2 8.8 52.3

Table 9 Total Sales of Hot Drinks by Category: Total Volume 2011-2016

Coffee 49.8 53.1 56.8 60.6 64.6 68.7

% total volume growth

Coffee 6.4 6.7 38.0

Table 11 NBO Company Shares of Hot Drinks: % Retail Value 2012-2016

% retail value rsp

GlaxoSmithKline 19.0 18.6 18.2 17.7 17.8

Table 12 LBN Brand Shares of Hot Drinks: % Retail Value 2013-2016

% retail value rsp

Horlicks GlaxoSmithKline 14.4 14.1 13.7 13.5

% retail value rsp

Hot Drinks 1.4 1.5 1.6 1.6 1.6 1.5

Table 14 Retail Distribution of Hot Drinks by Format: % Volume 2011-2016

Store-Based Retailing 100.0 100.0 100.0 100.0 100.0 100.0

--- Convenience Stores 1.1 1.1 1.1 1.1 1.1 1.2

Store-Based Retailing 100.0 100.0 100.0

Table 16 Forecast Sales of Hot Drinks by Retail vs Foodservice: % Volume Breakdown

2016 2017 2018 2019 2020 2021

Retail 80.5 80.8 81.2 81.4 81.6 81.8

Table 17 Forecast Sales of Hot Drinks by Retail vs Foodservice: % Volume Growth

Retail 5.2 4.9 27.2

Table 18 Forecast Retail Sales of Hot Drinks by Category: Volume 2016-2021

Coffee 59.1 62.3 65.7 69.2 72.9 76.9

Table 19 Forecast Retail Sales of Hot Drinks by Category: Value 2016-2021

Coffee 39,324.8 41,097.1 42,916.0 44,740.9 46,548.9 48,306.6

Coffee 5.5 5.4 30.1

Hot Drinks 5.2 4.9 27.2

% constant value growth

Coffee 4.5 4.2 22.8

Table 22 Forecast Foodservice Sales of Hot Drinks by Category: Volume 2016-2021

Coffee 9.6 10.5 11.5 12.4 13.5 14.5