Value sales growth rebounds in 2012
The soft drinks industry saw improved current value growth in 2012, thanks to the country’s higher economic performance, which improved consumers’ disposable income and purchasing power. The value growth in 2012 was higher than the previous year’s growth but lower than that registered in 2010 and during the pre-economic crisis period when GDP growth was higher. Nevertheless, the modest economic performance in 2012 benefited most soft drinks categories, especially RTD coffee, sports and energy drinks and bottled water, which registered strong sales growth. Carbonates experienced moderate growth but performance was significantly higher than the previous year.
Increasingly active lifestyles stimulate soft drinks demand
In 2012, consumers began to adopt more active lifestyles as a result of the growing popularity of sports such as marathon running and soccer. Manufacturers leveraged on this trend by using sports celebrities such as Manny Pacquiao and Phil Younghusband to endorse their brands. Some companies also sponsored athletic events and sports teams in order to gain exposure. As a result categories such as 100% juice, functional bottled water and energy drinks saw strong demand in 2012.
Multinationals still dominate soft drinks industry
Multinationals continue to dominate the soft drinks industry through the leadership of the Coca-Cola Export Corp. However, domestic companies such as the Asia Brewery, Philippine Spring Water and Universal Robina are gaining shares against multinational counterparts due to their innovation and lower-cost product offering. Nevertheless, multinationals continue to have an overall higher value share due to the presence of numerous strong key international players including PepsiCo International, Kraft Foods Philippines and Nestlé Philippines.
Supermarkets: the most important modern distribution channel
Outside of the ubiquitous sari-sari (traditional local convenience stores, covered under other grocery retailers), supermarkets is becoming the most important contributor of volume sales in all soft drinks categories as this channel is a convenient place at which to shop, is widespread as it has numerous branch presences across the county and its products are cost competitive. Improved disposable income and the increasing availability of supermarkets in underserved areas enable low-income consumers to shop in supermarkets who traditionally make main purchases in the variety stores. Apart from supermarkets, the growing distribution channels for soft drinks also include convenience stores and hypermarkets, and forecourt retailers saw double-digit volume growth in 2012.
Soft drinks industry expected to post modest CAGR over the forecast period
The positive economic outlook for the Philippines over the forecast period is expected to benefit the soft drinks industry, which is expected to have modest annual constant value growth. Carbonates and bottled water will continue to be the major contributors of volume and of value sales whilst RTD coffee, sports and energy drinks and concentrates will see the fastest off-trade constant value growth. Consumers will continue to prefer mainly the standard brands although brands in all price bands are expected to profit from higher consumption of soft drinks between 2012 and 2017.
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Discover the latest market trends and uncover sources of future market growth for the Soft Drinks industry in Philippines with research from Euromonitor's team of in-country analysts.
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The Soft Drinks in Philippines 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 Philippines?
- What are the major brands in Philippines?
- 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.