Health and wellness was a major trend in beverages internationally towards the end of the review period. In Malaysia, better for you beverages recorded two years of strong consumption growth in 2018 and 2019.
The restricted retail opening hours as part of the lockdown measures during the health crisis and the desire of many to minimise their social contacts led to an increase in planned weekly or monthly shopping for groceries. This led to declines in impulse sales as shoppers worked through their shopping lists methodically in order to spend as little time as possible in retail outlets.
After two years of fairly steep price hikes, particularly on reduced caffeine coffee and BFY reduced sugar soft drinks, manufacturers avoided any significant increases, with all categories of better for you beverages witnessing price increases below the rate of inflation in 2020. Whilst this was probably an attempt to demonstrate solidarity with cash-strapped consumers during the pandemic, many players were wary of high price hikes and concerned about losing sales to less expensive competitors given the severe impact of the crisis on consumer disposable incomes in 2020.
Better for you beverages is expected to record moderate, if accelerating, constant 2020 retail value growth over the forecast period and approach pre-pandemic levels of absolute sales as early as 2021. However, the strong double-digit rates witnessed immediately prior to the pandemic appear to be over for some time to come.
Health consciousness is expected to increase globally after the devastating impact of the COVID-19 pandemic. The potential risks of excessive sugar consumption have been widely published internationally, and it is highly likely that more Malays will seek to reduce their intake going forward.
Although retaining a negligible share of sales of better for beverages in 2020, e-commerce did record the strongest growth in retail, with many store-based channels witnessing lower sales as consumers cut back on shopping trips during the crisis. Even some Malays which had previously been wary of online shopping began to value the convenience and contactless shopping model during the health crisis.
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This report originates from Passport, our Better For You Beverages research and analysis database.
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