Hot Beverages Market in India

Posted By Team MCG On


Hot beverages in India were for long associated with the ubiquitous tea available across the country through the numerous chaiwala (roadside tea vendors) and the unique filter coffee popular across the southern states. However, changing consumer preferences have brought considerable changes to the Indian hot beverages market in the recent years

Market for hot beverages comprising tea, coffee and malt-based drinks was valued at around INR 187 billion in 2013-14, exhibiting a growth rate of around 7% over the last two years.

Hot Beverage Market: Break-up by Segments, %, 2013-14

Source:  Secondary research

In India, tea is cultivated at around 565 thousand hectares (as on 31-12-2013), of which Assam accounts for around 54% of the total area under cultivation. The domestic market for tea stood at around INR 91 billion in 2013-14, registering a growth rate of around 3% since 2011-12

Tea lounges or boutiques, on the lines of popular coffee chains, have been set up recently in the country to attract young populace and grow the premium market for tea. Several tea plantation companies are planning to set up and/ or expand tea lounges in the country.

India is ranked seventh among the top coffee producing countries and production stood at around 304 thousand tonnes in 2013-14. Café chains is a popular model and the market is growing at a rate of around 20% over the last few years. Market for cafés in India was estimated between INR 18-20 billion in 2013-14; currently there are around 3,100 cafés spread across the country.

Aggressive marketing and introduction of niche products that cater to specific age groups and gender have given a strong thrust to the malt-based drinks market.

HUL and TATA Global Beverages are the noted players in the tea market.  Other leading players include Duncan Tea Industries, Goodricke, GPI and Wagh Bakri. Nestlés ‘Nescafe’, HUL’s ‘Bru’, TATA Coffee’s MR. Bean, ‘Coorg Pure’ are the leading coffee brands in the market. GlaxoSmithKline Consumer Healthcare is the leading player in the malted milk food category with its portfolio of major brands – Horlicks, Boost, Maltova and Viva.