Carbonates in Finland

2020 IMPACT

Off-trade sales see moderate decline in 2020, but on-trade sales plummet as primary outlets close

Off-trade volume sales of carbonates are expected to see moderate decline in 2020, but on-trade sales are set to plummet, as cafés, bars and restaurants closed during lockdown and have operated at limited capacity since, or even shut down permanently. Even when the Finnish governments lifted the lockdown restrictions, they remained more rigid for bars and clubs, which are very important for sales of carbonates.

Local companies strengthen their positions by emphasising local origin and offering more premium carbonates

While multinationals Coca-Cola Finland Oy and PepsiCo Nordic Finland Oy are expected to continue to collectively dominate sales of carbonates in Finland in 2020, domestic company Hartwall Oy Ab is also set to retain its third ranking, albeit with a slightly reduced share than across the review period. In a highly uncertain competitive environment, the largest multinational companies are better able to withstand the economic impact of the pandemic than their smaller counterparts.

Innovations with reduced-sugar content appeal to Finns, inviting new players and brands to provide new options

Within carbonates, innovations in reducing sugar content appeal to Finns. New domestic company Rajamäen Raikastusjuoma generated interest in 2019 by introducing the first apple cider vinegar drink in Finland.

RECOVERY AND OPPORTUNITIES

On-trade sales will bounce back in 2021, while e-commerce offers opportunities for development

After a troublesome year, on-trade carbonate sales are expected to bounce back in 2021 and record moderate in the first half of the forecast period, while current value growth will result from higher unit pricing and premiumisation trends. Off-trade sales in current value terms will be marginal, mainly due to the maturity of the category.

Health and wellness and premium launches expected to drive value growth, despite lower demand for carbonates overall

The negative impact on carbonates resulting from the implementation of a sugar tax in 2014 began to fade towards the end of the review period, with volume growth boosted substantially from 2017 onwards by multipack sales of the most popular carbonate brands—Coca-Cola, Pepsi and Hartwall Jaffa. However, carbonates continue to be perceived as unhealthy compared with other soft drinks options, and this is especially pertinent in 2020 as Finns become more concerned about obesity.

Health and wellness trends will generate interest in non-carbonates containing juice and functional ingredients, but prices will need to remain affordable

Sales of non-carbonate products that are considered healthier are growing strongly, and therefore represent a threat to carbonates in the future. Products such as kombucha are still small compared to carbonates but have a strong growth potential.