Smaller manufacturers continue to put pressure on dominant companies
The South African soft drinks market continues to see growth in brand presence from smaller manufacturers across the country. Most of the smaller companies are gaining ground through introducing products that are similar to existing brands but with lower price offerings. Such a development has allowed many of these manufacturers to gain some market share from cash-strapped consumers seeking bargains in a market where the general cost of living is on the rise whilst income growth is fairly small.
In-store brand promotions remain vital in stimulating soft drinks demand
Manufacturers in South Africa continued to focus on promoting their soft drinks brands in-store across South Africa. Most of the promotions involved providing samples for consumers to taste the products and if satisfied, coupons with instant discounts would be provided to interested consumers. Companies such as Quality Beverages, which is involved in the carbonates category also made use of local celebrities as brand ambassadors to promote and boost the image of its Jive brand.
Private label development continues to influence competition in South Africa
Retailers in South Africa continued to invest in improving their profitability prospects by constantly improving their private label products, including soft drinks. Private label soft drinks were seen to be highly prevalent in categories such as carbonates, juice and concentrates. The retailers involved in these categories are increasingly seeing growth in their revenue as consumer perception towards private label continues to change. South Africans previously perceived private label products to be of inferior quality, but retailers have fought to change this through increasing shelf space allocated to private label soft drinks and providing money back incentives on consumers who purchase such products.
Modern retail channels continue to drive volume sales growth of soft drinks
South Africans continued to do more of their soft drinks shopping through modern retail channels during 2013. The lower unit price points for most of these products was a key driver behind demand through channels such as supermarkets, whilst hypermarkets remained more popular amongst consumers who prefer bulk buying with an aim to get value for money deals. Convenience stores are generally perceived to be highly priced, but many consumers still prefer to make use of their services as they provide quick service as there are shorter queues and the general operating hours are generally longer compared to most supermarkets.
South Africans expected to seek more value-for-money products
Volume sales of most soft drinks products are expected to be driven by value added products over the forecast period. The current economic environment in South Africa has seen consumer income take a hit and consumers have been cutting back on their spending through avoiding products deemed non-essential. The introduction of added value products is however, expected to boost demand for soft drinks. Categories such as carbonates are expected to see larger pack sizes being introduced, while other manufacturers would also be expected to provide value packs that offer lower unit prices for bulk purchases.
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The Soft Drinks in South Africa market research report includes:
- Analysis of key supply-side and demand trends
- Detailed segmentation of international and local products
- Historic volumes and values, company and brand market shares
- Five year forecasts of market trends and market growth
- Robust and transparent market research methodology, conducted in-country
Our market research reports answer questions such as:
- What is the market size of Soft Drinks in South Africa?
- What are the major brands in South Africa?
- What potential exists for multinational vs. local soft drinks companies looking to increase market share?
- How have changing social attitudes affected soft drink sales?
- How have sustainability issues; such as environmentally-friendly packaging, legislation on recyclability, or the amount of plastic in bottles, affected the soft drink industry?
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This industry report originates from Passport, our Soft Drinks market research database.