Carbonates in Estonia

2021 DEVELOPMENTS

Carbonates face competition from healthier soft drinks

The widespread closure of foodservice establishments during the government-mandated lockdown in 2020 significantly impacted volume sales of on-trade carbonates. In 2021, following the reopening of foodservice outlets, on-trade volume sales recovered, while full recovery to pre-pandemic levels is anticipated by 2024.

Coca-Cola continues to dominate thanks to its ubiquitous presence in Estonia and well-established distribution networks

Coca-Cola HBC Eesti continued to dominate carbonates in off-trade current value terms in Estonia in 2021, with the company’s global Coca-Cola, Fanta and Sprite brands maintaining very strong positions that have been capable of withstanding the worst impact of the pandemic. Local producer A Le Coq held second position, thanks to its strong presence in Estonia and the popularity of its Limonaad, Kelluke and Valge Klaar brands, which have a historic presence in Estonia and are valued by local consumers.

Smaller players capitalise on demand for local, natural ingredients, while tonic water gets a boost from off-trade closures

As consumers pay more attention to the ingredients in products, some smaller local producers are gaining attention. ÕUN Drinks OÜ’s Õun brand is produced using local apples—something that appeals to health-conscious Estonian consumers.

PROSPECTS AND OPPORTUNITIES

Carbonates faces long-term competition from healthier soft drinks

Carbonates is expected to record reasonable growth in off-trade volume terms over the forecast period, and constant growth in on-trade volume sales. Nevertheless, carbonates is a mature category in Estonia, and it will see ongoing competition from other soft drinks categories such as bottled water, which has been highly innovative in recent years and appeals to consumers who are increasingly concerned about the link between obesity and immunity in the aftermath of the pandemic.

Low-sugar and natural carbonates will become more prevalent, while tonic water offers scope for growth

Due to the unhealthy image of carbonates and negative publicity in recent years, producers are expected to enhance their products to make them seem more natural and appeal to an increasingly discerning public. Consequently, healthy ingredients and increased juice content and low-sugar credentials will be highlighted on packaging.

E-commerce sales will continue to grow as Estonians shop from the comfort of their own homes

In contrast with most other retail channels, e-commerce gained share during the COVID-19 pandemic as greater numbers of Estonians shopped online to avoid the inconvenience and potential health risks associated with face-to-face shopping experiences. This trend is likely to continue across the forecast period as local consumers continue to use ever-more sophisticated digital platforms to purchase carbonates from the comfort of their own homes.