Carbonates in Colombia

PROSPECTS

Business as usual for the popular carbonates category

In 2019, carbonates continued to recover from its strong volume sales dip in 2017, with growth remaining steady after returning in 2018. Manufacturers were dynamic in terms of promotional activities in-store, offering multipacks of family-sized bottles with assorted flavours.

Players must offer less sugary beverages to appease the health trend

Concerns regarding sugar intake and the threat of taxes being imposed on sugary beverages have been driving reformulation in carbonates, which has been increasingly evident since 2017. In cola carbonates, FEMSA offers three alternatives of reduced sugar Coca-Cola and in 2018 launched a campaign encouraging consumers to alternate between regular and reduced sugar products.

Carbonate mixes yet to bear fruit

Carbonates with fruit content are still questioned by consumers who remember carbonated juices, products that were introduced in Colombia but were not able to survive, and many do not fully understand that a carbonate can be healthier by adding juice content. Postobón’s Postofrut with 12% juice content disappeared from retailers’ shelves in 2018, having been launched the previous year.

COMPETITIVE LANDSCAPE

Leading players are busy pushing volume sales

Leading carbonates companies FEMSA and Postobón have been struggling for volume share for a number of years, despite both having strong distribution networks. However, FEMSA is the leader by far in cola carbonates, in which most of its marketing activities are focused on Coca-Cola, in both mass media and in-store promotions, leading to a lower price per litre.

A low-price advantage is not everything

Despite Colombians considering price as a key variable for decision making, and more so in an economically stressful environment, the disruptive price strategy of Ajecolombia SA in carbonates is not attracting consumers in large numbers and the company’s sales and share continued to decline in 2019. Colombians continue choosing traditional brands that offer frequent price promotions, or opt for other regional or smaller brands such as Glacial, Pool or Klie, which are seen more often on retailers’ shelves.

On-trade sales struggle as more alternatives are on the menu

Sales of carbonates through consumer foodservice operators are registering low growth, as the range of healthier alternatives for consumers is widening. As well as carbonates, Colombians can choose from bottled water, premium RTD teas or freshly prepared products such as lemonade, juices or smoothies, and therefore be more mindful with their consumption amid rising health-awareness.

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