Carbonates is expected to register slow but solid retail volume and current value growth in 2021, after seeing a significant drop in sales in 2020. Whilst measures to fight COVID-19, such as social distancing and a cap on the number of people dining indoors, affected sales for much of 2020, these were relaxed in 2021 as vaccination progressed and the number of cases reduced.
Sales of low and zero sugar carbonates have been rising for a few years thanks to the health and wellness trend, which has been pushing up demand for lower sugar beverages in general, including in carbonates. For instance, in 2021 sales of low calorie cola carbonates are expected to continue to grow at a higher rate than regular cola carbonates, thanks to the strong fundamental demand stemming from the health and wellness trend, which has been accelerated under COVID-19 as consumers have become more concerned with their own health and wellbeing during the pandemic.
The business environment remains fundamentally challenging for carbonates manufacturers despite the slight recovery in 2021, as the unhealthy image of the category is still on the minds of consumers and they are becoming bored by the product offerings from manufacturers, which have been similar for years. Indeed, the category was already seeing decline even before the pandemic.
On-trade and off-trade value sales of carbonates are forecast to remain fairly stable, seeing only slow growth over 2021-2026 in current terms, since the underlying fundamental demand is expected to remain sluggish. Meanwhile, both on-trade and off-trade volume sales of carbonates are expected to see declines in the forecast period, returning to the pattern seen pre-pandemic and not recovering to the 2019 level of sales.
Despite the decline expected in overall volume demand for carbonates in the forecast period, consumer demand for low and zero sugar carbonates, as well as tonic water, is set to remain stable, creating opportunities for manufacturers. For consumers, reduced sugar and sugar-free options are seen as being able to offer the right balance between taste and health.
Given that consumers have been bored with the existing product offerings from carbonates players, innovation has been seen from major manufacturers such as Coca-Cola and AS Watson Group to try to retain or ignite consumer interest in the category. To tap into the white space, emerging players and brands have been appearing, offering something new to consumers, and in doing so they hope to win more share.
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Carbonates
Sweetened, non-alcoholic drinks containing carbon dioxide are included here. All carbonated products containing fruit juice (“sparkling juices”) are included here, unless they are tea-based (these are included in carbonated RTD tea) or carbonated Energy drinks, which are included in Energy Drinks. Carbonated bottled water is also excluded. Carbonates are an aggregation of cola carbonates and non-cola carbonates, whether regular or low calorie. Euromonitor International includes both naturally and artificially-sweetened carbonates.
See All of Our DefinitionsThis report originates from Passport, our Carbonates research and analysis database.
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