India Ready-to-Drink (RTD) Coffee Market - Growth, Trends and Forecasts (2015-2020)
The India RTD coffee market was valued at USD 410.9 million in 2015 and is expected to grow at a CAGR of 3.2% and mature into a USD 480.8 million market by 2020. It is a recently developed concept wherein the beverage is sold in a convenient, directly consumable form. The importance of these products, against the backdrop of modern-day lifestyle, can be understood in their market valuations, which often run into billions of dollars. Despite being marketed as a young and urban phenomenon, RTD consumers can be from almost all demographic segments.
India RTD Coffee Market Dynamics
The instant nature and convenience offered by RTD coffee are important drivers. The nature of the product makes it a highly trend-driven market and as such a certain element of innovation is constantly in demand. Regarding the major access points, iced products with longer shelf life provide major opportunities, along with liquid coffee concentrates and frozen concentrates. The latter holds importance for bulk buyers, such as restaurants and offices. The major constraint for the market is in adapting to regional tastes and preferences. Specific regions, where consumers are habituated to hot or freshly ground coffee, take a considerable time and reluctance in adapting to the new tastes. Extensive marketing and use of locally sourced products are essential in countering this perception.
India RTD Coffee Market Segmentation
The market is segmented based on ingredient type, packaging mode, sales channels and geography. Convenience stores, supermarkets and mass sellers are the major sales and distribution networks. Considering the volume dependent nature of the market, availability of the products is a major market determinant. This factor is further amplified in the case of emerging countries, which lack a fully developed distribution network. The supermarket shelves and vending machines gain prominence in this regard. Both these access points make soft drink manufacturers, the ideal distribution partners, and dominant market players. This phenomenon can be clearly observed in the long-standing partnership between PepsiCo and Starbucks. Despite the portfolio strength of Starbucks, the distribution network offered by Pepsi is crucial for an adequate market penetration. This distribution related facet of the industry offers a significant challenge to new and small players.
Key Players in the Indian RTD Coffee Market
The major players in the region include Cargill, Starbucks Corporation, Asahi Group Holdings and Ajinomoto General Foods Inc.
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