Sales of fortified/functional beverages came under some pressure as the COVID-19 pandemic unfolded over the course of 2020. One of the main issues faced by the category was the reduced opportunity for engaging in outdoor activity among the population, with sales of FF sports drinks particularly hard-hit.
The COVID-19 pandemic was also particularly harsh on sales of FF energy drinks, with a significant slowdown recorded in the category’s growth rates over the course of 2020. Traditionally, key energy drinks brands including Red Bull, Monster Energy and Sting have relied heavily on their sponsorship of sports events and music festivals and concerts to market their products.
2020 saw India’s leading hot drinks manufacturers respond to the unique exigencies of the COVID-19 pandemic by focusing increasingly on e-commerce as a distribution channel for their products. This included leading brands involved in FF hot drinks entering into key partnerships with online delivery platforms as a way of supporting sales growth.
As mentioned above, sales of FF energy drinks and FF sports drinks came under pressure due to the impact of the COVID-19 pandemic during 2020. However, the forecast period is expected to see strong sales growth in each of these categories as the influence of the COVID-19 situation wanes and each of these categories benefits from the strong appeal that these products hold for younger consumers.
High prices and high caffeine content are expected to continue suppressing sales growth in FF energy drinks during the forecast period. 2019 saw the Indian government raise the GST on energy drinks from 18% to 28%.
FF other hot drinks is expected to face challenges during the forecast period as the high sugar content of FF plant-based and malt-based hot drinks and FF chocolate-based flavoured powder drinks has raised questions surrounding the validity of the health claims made on behalf of these fortified/functional beverages. Time and again, questions have been raised in influential media channels about the health claims of the leading brands in each of these categories, specifically in terms of their relatively high sugar content and questionable nutrition value.
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