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Challenges Faced By Beverage Industry In India

Despite the ongoing challenges in beverage industry, it is anticipated to show beneficial gains in the near future.

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Despite being the second highest producer of beverage, India is yet to evolve extensively when it comes to food and beverage industry. This industry is made up of an array of products including alcoholic drinks, juice/health, alcoholic and aerated drinks. Beverages are currently receiving substantial attention as their market potential is mushrooming. The soft drink and alcohol industry had made significant progress during last several years in production.

Although, still the level of processing is lower in contrast to other countries.  It takes double the time as compared to other countries to the get the process and regulations done. The beverage industry presents absolute challenges to each of the stakeholder community. The challenge to the industry is how effectively beverages can be developed in the marketplace. To the consumer, the call out is whether to trust the experts and if so what is the proposed benefits of beverages. The challenge of the government bodies is how to maintain a balance in preventing false and misleading information from reaching consumers while reassuring the use of beverages to attain a healthy lifestyle. So, some of the hindrances that this industry faces massively are:

Upswing of Healthy and Organic Drinks
While packaged drinks were once at the peak of the supply chain, but this trend does not hold true anymore. Currently, consumers are looking out for drinks that do not contain synthetic ingredients. The drastic reduction in the demand for processed drinks have nourished the organic market and caused many hitches in the beverage market and competition. Growing awareness levels regarding natural, healthy drinks and their practical  impacts have favored the trade for natural beverages. Industry Hercules needs to brainstorm multiple channels to combat the biggest challenge that healthy drinks will become in the upcoming future.

Complicated Government Regulations
This sector is continuously monitored by reforms and regulations.New tax regime under GST discourages aerated beverage and other drink consumption. One of the major challenges that this industry faces is the complicated and overlapping taxation structure in India. Specifically in beer market, the biggest drawback is that every state has different set of regulations. It feels like you are operating with 28 diverse countries.

Environment Friendly Propaganda
Environment-friendly is the next leading trend in the Indian market, owing to global warming and other weather conditions. A product that is tagged to be “eco-friendly” obviously has more chances of a fruitful sale than a product that is assumed to be harmful to the environment. The beverage companies are striving hard in making the entire manufacturing process friendlier to the environment, by maintaining reprocessing practices and profiting from renewable sources of energy. Exercising green business practices is a vital part of the few challenges in food and beverage industry in India.

The E-commerce Edge
This sector has been relatively slow on the upkeep of technology, while industries like electronics, textiles, and other domestic products have already ingrained their presence in the commerce domain. This is one of the extreme challenges in beverage industry, considering that consumers are more technologically attentive and sociable, thanks to the invention of internet and social media. Wholesalers and retail industries have already begun to invest in e-commerce and Instagram, Facebook to develop reach of their products. This is causing a huge flood in the beverage sector and worry about further diversification. 

Dearth of Innovation
Innovation is among the top challenges in beverage industry today. To combat intense competition, manufacturers must come up with inventive products. In Indian market, all we see is: pool of products that are generally of the same character and term. For example, there is a wave of organic things; so people will follow the similar footsteps rather than going and bending the monotony. The challenge of innovation is surely a roadblock in the Indian scenario.


The logistics market in India is highly unorganized with plenty national level players in the beverage sector. The infrastructure is grossly inadequate, with lack of proper roads and networks. Insufficient distribution channels, exploited ports, and poor quality of services are just a few of the bottlenecks that imprint beverage players and their production. This leads to high logistics costs, which leads to higher cost of pre-production as compared to other countries.

To conclude, the challenges in food and beverage industry are immense, owing to the massive competition. A single transformation is constrained to affect the entire supply chain. Contemporary markets, changing consumer spending, increasing  prices due to taxes, universal appetite, and modern technology are predicted to bring about extensive changes in this sector in the next coming years. Despite the ongoing challenges in beverage industry, it is anticipated to show beneficial gains in the near future.

Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.

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Avneet Singh

The author is the Founder of Medusa Beverages Pvt Ltd.

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