Movement and trading restrictions meant that while the country was in a COVID-19-enforced lockdown, supermarkets were the major outlet from where consumers could purchase BFY beverages from late March to early May. This resulted in strong value sales growth through off-trade, however this was largely a transference of demand, as gains in off-trade sales were largely offset by on-trade declines.
Consumer concern regarding excessive sugar intake and the associated health problems that arise, particularly among children, continues to adversely influence consumer demand for non-alcoholic drinks in New Zealand. With New Zealand being a relatively small consumer market with many well-established brands, local players continue to focus their NPD activity on introducing sugar-free or reduced sugar variants of existing drinks.
The aforementioned trading restrictions through on-trade outlets did not hamper the performance of Coca-Cola Amatil, with the company’s strong presence through supermarkets helping to ensure that the company retained its leadership position, with on-trade demand effectively being transferred to off-trade channels. While Coca-Cola Zero continues to be sold in New Zealand despite having been phased out in other international markets, the company’s focus in BFY beverages continued to be in its “No Sugar” range with a focus on producing seasonal and limited-edition flavours, such as Coca-Cola Peach No Sugar, and Coca-Cola Raspberry - introduced again after public demand - which contains 50% less sugar than regular Coca-Cola.
With 2020 being an election year, the issue of sugary drinks and a potential sugar tax on soft drinks has been a topic of discussion, with the Green Party in particular having specific policies pertaining to restricting access of sugary drinks to children. A New Zealand Dental Association study, released a few months prior to the election, advocated for a sugar tax, finding that “A tax on sugar shows the greatest overall health benefits in this study, and if implemented, we think oral health could be one of the biggest improvements.
COVID-19 movement and gathering restrictions resulted in a significant slowdown of NPD research and activity, due to staff not being able to work in product development labs. Prior to the onset of COVID-19, Coca-Cola Amatil launched Coca-Cola No Sugar Orange into the New Zealand market.
The use of natural fruit and herbal ingredients within tea emerged as a key trend over the review period. Demand for caffeine-free tea also emerged, helping to drive the performance of green tea over the review period, which is perceived as a healthy tea variant due to its high antioxidant properties, therefore many manufacturers have also introduced reduced caffeine variants as part of their green tea ranges.
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