Today, India represents an important market for various players to build a strong beverage brand. The Indian non-alcoholic beverage market is among the fastest growing markets globally, with old and new entrants competing with each other. Also known as sparkling water, seltzer is the new beverage variety that is doing the rounds of the Indian market lately. But do seltzers have much of a probability of excelling as an aerated soft drink option or simply shifting the focus towards a new hard drink variety, is something we need to look into.
Compared to most of the Asian countries, the Indian non-alcoholic beverage industry is relatively underdeveloped with low penetration. The main segments constitute the carbonated soft drinks, juices and bottled water, which together account for the majority of the total volumes sold.
Carbonated beverages, which traditionally have had the largest share in the Indian non-alcoholic beverage industry, have been losing their market share to other beverage categories in the last few years. The growing consumer preference for healthier food and beverages and the excessive use of sugar in their soft drinks has played against the carbonated beverages during the recent years.
In particular, companies such as PepsiCo and Coca-Cola have ruled over the Indian beverage market for many years, by offering the consumers refreshing soft drinks. But now with healthier options setting in, people have gradually reduced the consumption of their once-favourite carbonated drinks. Beverages such as fruits juices, smoothies, milkshakes etc. have taken their place.
Amidst this, a new fizz in the block has now come in the form of seltzers. Globally, seltzers are made with an infusion of juices and interesting flavours. It has already emerged as the fastest-growing category in the Western countries.
Historically, people from Niederselters, a town in Germany, bottled and exported their naturally carbonated water in 1787 and Americans called it seltzer. 100 years back, in the 19th century, people started adding seltzer to milk either as a refreshment or a tonic to cure diseases.
In October 2020, India’s leading dairy brand Amul entered the carbonated drinks space in India with the launch of ‘Tru Seltzer’, said to be India’s first seltzer. Marketed as a healthy beverage, Tru Seltzer is a mix of real fruit concentrate, milk solids, and fizz.
“A huge challenge for Amul might be to break the Indian myth that milk and citrus fruits do not complement each other. Tru Seltzer is a combination of both these, and that too with fizz added. Also, the combination of dairy, fruity, and fizzy might not appeal to Indian palates. Adding to this, seltzers are seen as a hard drink in the US. While the younger generation may welcome this move, the brand, on the whole, does not fit the seltzer groove”, said Syeda Maseeha, Adjunct Research Faculty, ICFAI Business School.
Perhaps this is the reason that we are not seeing any other old or new brand experimenting with this beverage category uptil now. While on the other hand, there are more varieties emerging in the hard seltzer space in India, being pushed majorly by the startups.
Hard seltzers attracting more crowd
Hard seltzers come across sugar fermented carbonated alcoholic beverages that contain fewer calories and carbohydrates than alcoholic drinks. Most hard carbonated drinks have an alcohol content of 4-7 per cent, with less than 100 calories per can. According to reports, the global hard seltzer market size was valued at $8.95 billion in 2021 and is expected to expand at a compound annual growth rate (CAGR) of 22.9 per cent from 2022 to 2030.
To start with in 2020, there were only two brands making seltzers in India: Mumbai-based Speakeasy and Bro Seltzer, which also happen to be one of the biggest importers of alcohol in India. But now the number of new entrants has started picking up.
For instance, Goa-based startup Barbrew Beverages has recently come up with Barney’s hard seltzer in India, as a low alcohol based drink popular in the US and European markets, also pegged as an alternative to beer and wine.
“We are addressing a trending segment in US that is not so trending in India due to its non-existence. There is no healthy beverage in the alcohol industry and post pandemic health is the top most concern for every human being. For the first time ever the target audience is neither divided on gender nor on age. It’s an easy drink for all above the age of 21 years thereby uniting the generations. Today, a real competitor to a big player is not another big player but a new startup with innovative ideas and passionate mindset”, said Ruchi Gupta, Co-Founder, Barbrew Beverages.
Up next is another Goa-based startup Mandovi Distilleries that has recently announced the launch of a hard seltzer called Pursue with local flavours such as mosambi and mint, strawberry and rose, peach and white tea, and mango and chilli. This novel brand has been developed in collaboration by global flavour specialists, boutique design firms and progressive product artists between Miami, continental Europe, and Western India.
Sharing his views on the new product, Anish Reddy, Chief Executive Officer and Founder, Pursue said, “As an alcohol category, hard seltzer is a blank slate, unshackled by historical associations or the weight of expectation. With the ever-evolving pool of consumers who are becoming more experiential and quality driven, the idea behind Pursue is to promote personal freedom, reshape conventions around alcoholic beverages.”
Indore-based startup brand Wild Drum is also planning to specifically address the community of health-conscious people by offering a beverage that is vegan, gluten-free, low calorie, fat-free, and with no preservatives. This hard-seltzer is a clear carbonated beverage infused with natural fruit flavourings such as peach, mango, and lemon-mint.
Gradually, the market is getting crowded with multiple options in the hard seltzer space. A major reason for the increased preference of hard seltzer might be the reduced calorie and carbohydrate content when compared with beer or other cocktails.
Is it a healthy choice?
Although seltzer fever has become the latest craze amongst young drinkers, it does make one conscious about the health aspect. That is simply because research clearly shows that alcohol increases the risk of many types of cancer, even if taken in moderation.
According to the latest analysis by the American Institute for Cancer Research, alcohol increases the risk of several cancers, including cancer of the liver, colon, mouth, breast and oesophagus. Even small amounts of regular alcohol intake increase the risk of breast and esophageal cancers.
“It is important to note that many of the alcoholic beverages are being marketed as healthy with ‘exotic and nutritious’ flavours and stressing low calories, but do remember that these drinks are still providing empty calories with no nutritional value,” said Sheena Patel Swanner, Director of Nutrition Programmes, American Institute for Cancer Research.
Seltzers are typically brewed like any other beer style wherein it is fermented and then there is a process where you extract all the colour and flavour. Once that is done you add your preferred flavour to it. There is another type of seltzer that is made from wine and purified to an extent to which flavours are then added separately. Then there are also seltzers made from extra neutral alcohol. With multiple processes, many options are being provided now for one to choose from wisely.
“It’s a trend that’s definitely picking up across the world, and India will be no exception. Previously, it has been seen that trends in the US transform into a cult and then come to India. And right now, the trend is choosing low calories over high. Since seltzers are made with sparkling water, the calorie-count is significantly slashed with one pint of seltzer carrying roughly 80 to 90 calories.” Amar Shrivastava, Head of Technical and Consultancy at Brewer World.
Hard seltzer is surely an untapped potential market and unexplored by the alcohol beverage industry, which is likely to show dynamic and lucrative business opportunities for new entrants.
For the alcohol-preferring consumers, picking up a pack of seltzers may not necessarily be on top of mind before heading to a social gathering. But it’s only a matter of time before these flavoured, low-calorie drinks become popular with the millennials who are increasingly looking for healthier and novel options.
On the other hand, seltzers might only remain a preferred choice for the urban population in the long run, since penetration in the rural sector might be difficult.
Dr Manbeena Chawla
(manbeena.chawla@mmactiv.com)