Manufacturers of bottled waters, nectars and iced teas are benefiting from improved demand amidst increased health concerns over carbonated drinks according to beverage research group Canadean.
The findings indicate a strong shift in consumer beverage demand since 2003 towards non-carbonated alternatives, creating new opportunities for drinks manufacturers in the country.
The still drink segment in particular has benefited from these changing demands in the market, with sales up 3.43 per cent from 2001 to 2006, the research found.
While India's economic prowess remains on the rise, many people in the country remain on low incomes, the report adds.
As such, the market for cheaper, more locally produced beverages has thrived, a need fulfilled by a number of still drinks brands.
Besides price, health concerns over carbonates have also had a profound impact on shaping the soft drink market.
A number of negative headlines over carbonated beverages including fears of an alleged pesticide contamination resulted in boycotts and even bans of the products on some regions.
In their place, still drinks sales have been boosted accordingly, helped by innovation such as new larger 1.2 litre polyethylene terephthalate (PET) bottles similar to carbonated beverages.
The Frooti mango juice product was chosen as a key example of this focus, having experienced sales volumes increase by two and half times since 2002.
This rise was attributed in part to a broader range of packaging sizes.
Another important segment fro growth was in Nectars, which are fruit-based drinks not consisting of 100 per cent juice, include Dabur's Real and PepsiCo's Tropicana.
Between 2001 and 2006, the market grew by 9.16 per cent, according to Canadean's figures.
Packaged sales were up 40 per cent in 2006 alone, driven mostly by the success of the Parle Appy brand, Canadean said.
The apple flavoured drink benefited from consumer perceptions that the product, priced similarly to still and carbonated drinks alternatives, offered better value than rival products, the report said.
Nectar sales, though starting form a low base, are also expected to begin catching up on the popularity of fruit juices, with further volume growth for 2007 expected at about 12 per cent.
Growth in fruit juices within the country from 2001 to 2006 was 3.43 per cent.
Bottled water has undergone the most significant growth of non-carbonated drinks over the last five years with volumes up by 13.74 per cent between 2001 and 2006.
Canadean suggested this was in part due to the failure of government standards in preventing the entry of small producers into the market place, creating even stronger competition for the national brands.
A particular concern for larger players has been the growing popularity of the more affordable of 25cl pouch packs, which the Indian government has moved to outlaw.
Bulk or home/office delivery (HOD) water segment is also thriving in the country helped by increasing numbers of office blocks being constructed within the country.
This pattern of non-carbonated growth has not gone unnoticed by some fo the world's leading beverage manufacturers.
Tate Tea, one of the world's largest tea manufacturers, has shown itself to be particular keen to branch into the country's emerging non-carbonate market.
The group last week announced that its planned acquisition of further shares of the Mount Everest Mineral Water company had been deferred by local competition body, the Securities and Exchange Board of India.
Group managing director Percy Siganporia told BeverageDaily.com that despite the deferral, the company did not expect long-term setbacks to its plans to focus on adapting to consumer tastes in the country for beverages.
" We do not anticipate a major delay in this regard," he said.
"Consequently, the project does not get impacted, nor do our plans."
To continue its expansion, Siganporia said the company was already looking to innovative new ways of meeting consumer demands.
"The greatest challenge we face in the market is to enhance our pace of genuine innovation to address the opportunity emerging to cater to the palate and taste preference of young, informed consumers," he said.
"The strategy we have deployed is to grow through innovative address of the current tea and beverage market,"