With consumers increasingly opting for healthier beverages, the carbonated soft drinks market in India is seeing colas losing value share to flavoured drinks.

Colas, by industry estimates, now comprise only 38 per cent of the Rs 7,500 crore (Rs 7.5 billion) domestic market for sparkling drinks, while flavours (clear lime, cloudy lime, orange, apple) command 54 per cent. Until three years ago, cola products had a 46 per cent share of the total soft drinks market, while non-colas had 47 per cent.

An evidence of this shift comes from Sprite, a clear lemon drink from Coca-Cola India, which has replaced PepsiCo's flagship brand, Pepsi, at the number two spot in soft drink sales. PepsiCo, too, has noted the shift in demand for lime/ lemon drinks and has introduced a packaged lemonade, Nimbooz, under its 7Up brand.

Investment, it should be noted, continues apace in sparkling beverages. The 'per head' consumption is still low, at a yearly nine servings of 200 ml. But along with this comes the relative shift in preference for non-carbonated drinks.

"Around 120 billion litres of beverages are consumed by Indians every year, of which only 5 per cent are in the packaged segment. The opportunity for growing is immense across carbonated and non-carbonated categories," an industry observer said.

Coca-Cola and PepsiCo, the two giants, together control about 90 per cent of the carbonated beverage market in India. But the greater energy focus in both is on expanding their CSD portfolio by way of flavours and variants.

PepsiCo, for instance, has witnessed a big shift from a portfolio dominated by carbonated beverages to a more balanced one. "The ratio of our CSD portfolio to the non-carbonated one now stands at 2:1, a big change from 9:1 a few years back. We are now growing our non-carbonated category even as our CSD business continues to grow," Punita Lal, executive director (marketing), PepsiCo India, told Business Standard.