How to Set up Business of Health Drinks in India

Narendra Kumar

16 Jan, 2021

In India, awareness about health and fitness among the people has increased to a significant extent. People due to their busy lifestyle are unable to take care of their health. Therefore, they are trying to get different health products in order to complete their nutritional deficiency. In this scenario, Energy drinks/Health drinks have made a good place in the market especially among the Indian youth. Most of the people are considering these drinks as a substitute to boost their stamina and energy levels.

The growth of Health Drinks in Indian Market

Indian market is one of the fastest developing consumer markets, especially for a product targeted towards the young and as well as young adults. Health /Energy drink has entered the market in the recent past and captures the whole market at a faster rate in comparison to other products like soft drinks^[1].

Growing health consciousness, increased urbanization among the people especially youth has increased the demand for such drinks. The market size of these drinks in India is estimated at about Rs 700 crore, and climbing up 20-25% year-on-year.

Red Bull GmbH –is one of the finest examples of Energy Drinks entered the market in 2002 and established its long-lasting presence across the country.

Challenges for Energy Drinks In Maintaining Its Market

In accordance, to the worries of people for their health, the market for energy drinks is expanding and is expected to grow further. Therefore, there is an abundance of pressure upon the drink manufacturers in competiting the challenges of supplying drinks that consumers feel are safe to consume.

Points to be Taken Care of Implementing the Decision of Energy Drink Business

• Finance Arrangement: The applicant has to make a wise decision regarding the arrangement of capital either to take a loan from a bank or looking for an attractive investment.
• Information about customer and market: The applicant must be clear regarding the proper profile of their customers and what are their This will helps in framing wise decisions about your brand based on evidence and understanding.
• Sort out your manufacturing and certification: In order to prove that the drink which applicant is making is safe and legal for the larger retailers, the applicant needs to get their production site certified.
• Estimation of cost and pricing: Applicant must be clear about its expenses incurred in making this drink and deciding selling price which will be profitable and as well as fit in its target marketplace.
• Position your brand: Applicant need to collect information regarding the markets in which they can sell their brand with a monopoly, it will help them in targeting the consumers effectively.
• Designing of packaging:  Packaging should be designed in such a way that product should be safe inside and it should be an eye-catching as well as appeals to your consumer what your brand stands for.
• Marketing Plan: Applicant needs to make a genuine marketing plan and has to raise awareness of their brand, build relationships with potential customers or can take the help of social media.
• Business Plan: It is one of the most important factors to be considered, a Simple and persuasive business plan, not only helps to take the opportunity but also helps in convincing any investor and lender for investing in your project.

Permissions and Licenses Required to start Health Drink Business

• Company Registration: Business registration is the first and foremost step for commencing the business of manufacturing Health Drinks. It should be set up under an artificial legal entity like a company or LLP.
• GST Registration: After the implementation of GST, it is mandatory for every business carrying out a taxable supply of goods or services and whose turnover exceeds the threshold limit  to register under GST and obtain GST number
• PF Registration: If there are more than 20 employees in the company or manufacturing unit, then it is obligatory upon the unit management to obtain EPF registration.
• ESI Registration: It is mandatory in India for all Businesses that employ 10 or more employees to obtain Employee’s State Insurance ESI Registration.
• Pollution Certificate: It is mandatory for every establishment before commencing its activity to obtain No Objection Certificate from the State Pollution Control Board
• Drug and Pharmaceuticals license: If the drink include caffeine in it then has to take permission from the Food and drug department regarding the limit of caffeine in the drink

Role of FSSAI in health Drinks:

FSSAI or the Food Safety and Standards Authority of India have taken a lot of steps to strip off the term health or energy drinks from these concoctions available in the market. It has been obligatory upon the manufacturer to carry a safety warning on the label of their drinks so that the consumers came to know what they are actually drinking. Moreover, the label must also disclose if these drinks are not suitable for consumption for lactating or pregnant women and children, people who are sensitive to caffeine”.  The label must also indicate the limit of consumption in a single day.

Recently, the agency has finalized the latest NOI standards to be ensured in these drinks.

Steps taken by the FSSAI

• In case of some health drinks, the Food Safety and Standards Authority of India withdrew the NOC of their products and recalled them considering them as unsafe
• On June 11th, 2015, the Authority indicates the manufacturers of one of the popular health drinks, “Restless Energy Drink” and recommended them to recall it immediately from the market.
• In the year 2014, the FSSAI’s scientific panel observes that an irrational Ginseng and Caffeine combination impose an opposing effect on the human body. The company has been directed to stop the production, sale, and distribution of healthy drink in the market which contains this combination.

Things to be compiled before applying for FSSAI License for Health Drinks:

• A hazard analyst test must be done.
• Employees must be trained in handling the correct food product
• Distributors must ascertain the quality of food items.
• Limits must be ascertained for every controlling point. Proper procedures must be framed for maintaining food production standard and verification procedure must be established to confirm corrective actions.

Therefore, for the safety purpose, it is mandatory for the manufacturer to take the FSSAI license so that consumers can consume various foods and drink products without any stress or fear of contamination or adulteration.

How Enterslice can help you?

Enterslice an award-winning company has 100 per cent expertise in providing legal services related to the business of Health Drinks. Interested one may raise their queries on info@enterslice.com.

Also, Read:

FSSAI introduction of Organic Food Regulations