The journey of Bournvita from offering healthy drinks to becoming a health hazard reflects the shift in consumer behaviour towards healthy choices. People are now more aware of the impact of sugar consumption on their health and are actively seeking healthier alternatives. This shift has driven carbonated soft drink (CSD) producers to diversify into low- and zero-calorie products, as well as flavour-infused beverages.

As health consciousness becomes ingrained in everyday decision-making, beverage biggies find themselves rethinking their strategies.  With the flattening curve of the fizz, beverages must refresh and delight, but convenience and authenticity are the new must-haves.  

Energy Drinks a fast-growing segment:

Energy drinks are a prime example of this new wave in beverage consumption. In India, the market for energy drinks is expected to grow from USD 25 million in FY2022 to USD 108.29 million in FY2030, with a CAGR of 20.11%. Despite holding a small share of the global market (0.026% in 2022), India's market is poised for substantial growth due to aggressive marketing campaigns, social media influence, and changing lifestyles.

Who is steering the change?

Millennials and Gen Z are at the forefront of demanding quality at competitive prices, favoring value-driven brands that align with their health goals. This younger demographic is drinking less alcohol and consuming fewer carbonated drinks, opting instead for functional beverages that offer real health benefits. Their pragmatic approach to health, including regular exercise and balanced diets, points to a desire for longer, more fulfilling lives.

The changing consumer preferences don't mean a complete farewell from indulgence. The focus has shifted to mindful consumption. Occasional treats like cocktails and mocktails are being enjoyed in moderation, while daily drinks lean toward healthier choices like dairy-free milk, herbal teas, and coconut water. Amidst a sea of choices, the trend is unmistakable for coffee and tea lovers. The shift from traditional powders and leaves to ready-to-drink options signals the consumer’s quick response to a growing thirst for instant yet soothing sips.

Local brands like Lahori Zeera are thriving by tapping into regional flavors and ingredients like jeera, which are known for their health benefits. The market share for these newcomers is rapidly increasing, raising the question of how established players like Pepsi and Coca-Cola will adapt.

Strategic Adaptation of Legacy Brands:

Recognizing this opportunity, brands like Monster and Janjira have released competitively priced products targeting students, gamers, and young professionals. For instance, Monster’s Predator energy drink and Janjira's budget-friendly options cater to a demographic that values both affordability and functionality.

Major legacy brands are also diversifying their portfolios to offer more health-conscious and convenient beverage options. Coca-Cola’s foray into ready-to-drink tea is a strategic response to the growing demand for less sugary, more natural beverages. The company’s adaptability highlights a broader trend in the beverage industry, where brands are focusing on wellness-oriented products with natural ingredients and functional benefits.

Message for the brands

The paradigm shift in consumer behavior is clear: today's consumers prioritize health, authenticity, and convenience in their beverage choices. Brands that innovate in line with these preferences—by offering products with natural ingredients, reduced sugar, and functional benefits—will resonate deeply with modern consumers. This shift represents a valuable opportunity for both legacy and emerging brands to grow and capture market share in an increasingly health-conscious world.

For brands seeking to stay relevant, the message is simple: embrace the changing consumer landscape by offering beverages that provide refreshment, wellness, and authenticity. Adaptability and innovation will be key as the industry continues to evolve.