No-sugar soda market gets fizzy as regional firms latch on to health hook

Subscribe to enjoy similar stories. Bengaluru: India’s regional beverage makers are discovering that cutting sugar, not prices, may be the next growth lever as they give established aerated beverage players a run for their share in the mass market. They are rolling out low- and no-sugar flavoured soda variants to tap a growing base of young, health-conscious consumers in their core markets.

Seeing rising demand for low- and no-sugar drinks, Punjab-based Lahori Zeera plans to launch a stevia-based version of its flagship drink by March, co-founder and chief operating officer Nikhil Doda told Mint. While the company is introducing a zero-sugar option, Doda defended the nutritional profile of its existing products, saying they are not perceived as ‘junk’ because they combine sugar, salt and lemon juice. “It kind of acts as an electrolyte, it’s like ORS," he said, adding that oral rehydration solutions contain sugar and salt, but aren’t viewed as sugary beverages.

The pricing is competitive to lure new consumers into the niche segment. The company's sugar-free variant will be sold at an entry-level ₹10 maximum retail price for a 200ml bottle. The regular variant is also priced ₹10 for a 160 ml bottle, Doda said.

Sugar-free variants are typically priced higher, say industry experts. Santosh Sreedhar, partner at Avalon Consulting, said sugar alternatives are more expensive than sugar itself and sales volumes are lower, which is why sugar-free drinks typically retail at a 30-50% premium over regular variants as brands use the segment to tap a niche, higher-paying consumer base. In south India, House of Bindu, a Karnataka-based legacy player, was the pioneer of introducing jeera into the market way back in 2002.