Carbonates in Colombia

2021 DEVELOPMENTS

Adverse economic situation influences sales of carbonates as consumers economise

One of the key factors to have emerged from the COVID-19 situation that continued to influence sales of carbonates during 2021 was the adverse and uncertain economic situation that has emerged as a result of the interruptions caused to commercial activity in key economic sectors. While Colombia’s consumer economy was already under pressure prior to the onset of the COVID-19 pandemic, price-sensitivity has become an even more salient issue for the leading players in soft drinks since the start of 2020.

On-trade sales of non-cola carbonates rebound as efforts to boost demand pay off

Non-cola carbonates recorded a very strong performance and on and trade volume terms in 2021 as the category rebounded robustly from the substantial declines recorded an on-trade volume terms during 2020. Although the category did not suffer as much as RTD tea or juice in terms of declining on-trade sales over the course of 2020 as a result of the COVID-19 pandemic, the fact that the category is so fragmented meant that it was vulnerable to sales declines as there was no dominant player to take the lead in supporting sales via strong marketing and promotional campaigns.

The Coca-Cola Co maintains its strong leading position in carbonates

Fomento Económico Mexicano SAB de CV, the local representative of the Coca-Cola Co, remained the strong leading name in carbonates in Colombia in 2021. Faced with the unique exigencies of the COVID-19 pandemic, the company has been able to rely on its vast financial resources to gain crucial advantages over its rivals.

PROSPECTS AND OPPORTUNITIES

Health and wellness trend promises a make-or-break moment for carbonates brands

The health and wellness trend has been one of the most important megatrends across various consumer goods industries in Colombia for some years, including packaged food, hot drinks and soft drinks. In terms of carbonates, the forecast period is likely to see the health and wellness trend pose considerable challenges to the leading brands as consumers become increasingly health-conscious, making it essential for brands to offer products that conform to the general principles of health and wellness.

Innovation set to lead to a wider range of products and more variety for consumers

While the COVID-19 pandemic has prevented numerous challenges to the leading players in carbonates, it has also created opportunities for brands to launch new products that are in line with emerging consumer trends and which have the potential to attract the attention of consumers and widen the consumer base for the brand. With this in mind, it is likely that the forecast period will see the launch of numerous new flavours under existing carbonates brands, while changes are likely to be seen in the ingredients that are used by the category’s incumbent leading brands as manufacturers look to improve their formulations and offer consumers something novel and different.

Return to widespread and frequent socialising to boost demand for premium mixers

Among the categories of carbonates that have strong prospects for robust growth during the forecast period are lemonade/lime, ginger ale and tonic water/other bitters, all of which can, to a large extent, attribute their popularity to their widespread use as mixers in variety of prepared alcoholic beverages. This applies especially to the on-trade, with premium brands likely to be among the big winners as consumers are often unwilling to trust less expensive brands of mixers when they are being added to high-priced alcoholic drinks.