Carbonates in Estonia

PROSPECTS

The health and wellness trend continues to have a strong impact

The health and wellness trend, which continues to impact soft drinks globally, continued to play an important role in Estonia in 2018, as it manifested in stagnating volume sales of carbonates. Due to the unhealthy image of carbonates and the negative publicity the category received in recent years, Estonians cut back on the consumption of carbonates, and there was extra scrutiny in terms of children’s consumption of carbonates.

Uncertainty regarding the implementation of a sugar tax in Estonia

As of 2018, no definite steps to implement a sugar tax in Estonia had been taken by the Estonian government. The World Sugar Research Organization sent a query to the Estonian government in July 2018; however, there have been no further talks regarding the specifics of imposing a sugar tax in Estonia, and it is unlikely that any changes will be seen in 2019.

Carbonates is set to stagnate over the coming years

Carbonates is already a mature category in Estonia, with rather high per capita consumption. In addition, due to the negative publicity the category has received due to increasing consumer awareness and the sugar tax discussion, producers have been struggling to drive growth.

COMPETITIVE LANDSCAPE

Foreign player Coca-Cola leads

Coca-Cola HBC Eesti held the lead in carbonates in off-trade value terms in 2018, with the global brands Coca-Cola, Fanta and Sprite, which have established strong positions within the category in Estonia. The local producer A Le Coq held second position, as it manages the popular soft drinks brands Limonaad, Kelluke and Valge Klaar.

Carbonates is losing out to flavoured bottled water

Carbonates in Estonia is seeing strong competition from other soft drinks categories, especially bottled water, as the latter is an innovative and dynamic category that has managed to attract consumers’ attention with constant new product developments. Furthermore, sales of bottled water were boosted by the prevalent health and wellness trend, and carbonates are often left on the shelves of supermarkets, as consumers prefer flavoured bottled water as they consider it a healthier option.

Smaller domestic players are expected to become more significant

As consumers are paying more attention to the ingredients in products, some smaller local producers which highlight the natural content of their products are likely to start taking share from big multinationals which lack the dynamic advantage in the market. An example of such a producer is ÕUN Drinks OÜ, a small local player that promotes its Õun soft drinks brand.

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