Carbonates in Hungary

2021 DEVELOPMENTS

Growth picks up in 2021 thanks to some adaptation after the severe disruption in the previous year

After the stagnancy in growth in 2020 due to disruptions induced by the onset of the COVID-19 pandemic, growth picked up in 2021. Retailers as well as consumers adapted to the new situation with many turning their attention to e-commerce solutions for instance.

Package size polarising towards larger and smaller units leading to the demise of medium sized units

One reaction of suppliers to lowered on-trade and casual on-the go consumption was to alter packaging sizes towards larger as well as smaller units and away from mid-sized packaging. This move was a response to increased consumer price sensitivity and decreased impulse purchases.

Local brands fragmenting and diversifying towards low-calorie options

The Hungarian market stands out in general with a relatively large presence of locally produced products and brands actively supported by public policy. This is particularly true of the carbonates category where traditional local brands such as Márka or Xixo as well as newly emerging brands by entrepreneurs are increasing brand diversity.

PROSPECTS AND OPPORTUNITIES

Strong growth potential for low-calorie carbonates thanks to the health and wellness trend

Between 2010 and 2020 the Hungarian Soft Drinks Association reported that the average sugar and calorie content in the soft drinks and juice products of its members has been reduced by 43%. Its members entered a voluntary sugar reduction programme and redesigned their product formulas by introducing new and innovative products, increasing the proportion of their smaller pack sizes and expanding the proportion of low-calorie and calorie free products in their range.

Slow rebound for on-trade carbonates over the forecast period

In terms of the on-trade channel, carbonates is expected to rebound from a significant fall in 2020 during the forecast period. However, the category is only expected to return to 2019 levels by 2025 or even 2026.

The impact of affordable luxury further polarises the category

As a consequence of the prevailing trends, the category is expected to polarise between low-priced and more premium brands at the expense of mid-priced regular products. Concretely, private label, for instance, will grow in an economically strained environment thanks to the power of the retailers which own these products and which are more resilient to economic shocks.