Soft drinks sees better performance in 2013 than in 2012
With a better economic backdrop and upbeat consumer confidence, soft drinks’ total value sales accelerated in 2013. Major categories like carbonates, juice, and RTD tea reported improvements in volume sales. Local consumers continue to purchase soft drinks as beverages to drink during snack times and meal times. The economic improvement in the Philippines continues to benefit the category. Soft drinks manufacturers’ efforts in widening their distribution channels and keeping their products affordable has bolstered consumer demand.
Price remains a key consideration in purchasing decisions
Most Philippine consumers remain price-conscious, choosing products that are more affordable. This trend can be seen in carbonates where lower-priced brands have gained significant market value shares as they appeal to price-conscious buyers. The increasing popularity of single-serve packaging in RTD tea, the growing value share of litro packs of powder concentrates, and the dominance of returnable glass packaging in carbonates and energy drinks all reflect the local market’s emphasis on value for money.
Multinationals lead soft drinks
The Philippine market is dominated by the local arms of huge foreign beverage firms. In 2013, the combined value shares of The Coca-Cola Export Corp, and PepsiCo International Inc alone made up the bulk of off-trade value sales in soft drinks. These companies benefit from their wide portfolio of brands spanning across multiple soft drinks categories. Despite this supremacy, domestic players experienced significant growth in value share during the year, especially those that are positioned in the more vibrant categories.
Proximity dictates choice of distribution channel
Philippine consumers buy from retailers that are closest to where they live; making direct selling and other grocery retailers such as sari-sari stores the primary distribution channels in soft drinks. Direct selling distributed 84% of volume sales in the largest soft drinks category, bottled water, in 2013. Direct selling comprises water-refilling stations, which supply bulk bottled water in Philippine neighbourhoods. Meanwhile, sari-sari stores cater to lower- and middle-income consumers, in both urban and rural areas. It should be noted that consumers do not stock up on soft drinks but purchase these products as the need arises. Thus, retailers that are located near customers share the bulk of the sales in soft drinks.
Soft drinks will experience moderate growth in the medium term
The local soft drinks market will continue to grow in the forecast period, though more sluggishly compared with the review period. Large categories like carbonates, concentrates, juice and bottled water will be challenged by maturity. Population growth and economic improvement will be the expected growth drivers in these relatively mature categories. Meanwhile, 100% juice and sports drinks will be among the fastest-growing products, driven by consumers’ pursuit of a more active and healthier lifestyle.
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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.