Citi has highlighted increasing competitive intensity in the beverages segment following distributor interactions across FMCG categories in Lucknow. The brokerage noted that Campa has been gaining market share through its Rs 10 price point, consolidating demand away from smaller local brands.
According to Citi’s channel checks, beverage companies have stepped up investments ahead of the summer season. The brokerage observed increased channel incentives, wider distribution reach and greater penetration of visi-coolers, alongside the launch of products at the Rs 10 price point as companies attempt to capture or defend market share during the peak consumption period.
The brokerage also pointed to a shift towards premiumisation in the energy drinks category. Citi noted that demand is increasingly moving towards Rs 50–60 cans, compared with the more common Rs 20 for 250ml PET bottles, indicating evolving consumer preferences in the segment.
In the alcoholic beverages category, growth in the state has been supported by favourable policies, with spirits outperforming beers. Citi also observed that in FMCG general trade, low unit packs (LUPs) are gaining greater relevance, while both channel partners and consumers are increasingly relying on organised distribution networks for larger pack sizes.
Based on its sector view, Citi’s top buy ideas include Britannia Industries, Godrej Consumer Products and Varun Beverages. The brokerage’s top sell calls are ITC, Colgate-Palmolive India and United Breweries.
Disclaimer: The views and investment tips expressed above are those of the brokerage and do not represent the views of this publication. This article is for informational purposes only and does not constitute investment advice.