Carbonates in Latvia

PROSPECTS

Demand hit by population decline and cooler weather in 2019

Carbonates is seeing a downturn in off-trade volume sales in 2019, as the population, notably the younger audience, declines and migrates to healthier options, such as bottled water. In addition, the cooler summer of 2019 hindered the impact of seasonal sales.

Push for healthier lifestyles threatens consumption rates among younger generations

Influenced by rising health awareness, the Latvian population is seeking healthier lifestyles. Therefore, consumers are making healthier choices, more often choosing bottled water over carbonates rich in sugar/sweeteners, caffeine and artificial additives.

Low calorie versions offer consumers way to remain loyal to favourite brands

Manufacturers are looking to renew their portfolios to cater to health and wellness trends and reshape carbonates in Latvia. Many consumers are unwilling to give up their favourite cola carbonates or lemonades, but they are considering low sugar/calorie and additive-free versions of iconic drinks.

COMPETITIVE LANDSCAPE

Coca-Cola uses low sugar and small pack strategies to retain brand interest

Coca-Cola HBC Latvia remains the clear leader in carbonates with iconic, well-supported and widely available brands. Coca-Cola has a well-diversified portfolio of products in all key areas of soft drinks, which enables it to ride the wave of consumer migration across categories.

More natural and low calorie options offer growth opportunities in mature category

While lower sugar intake is at the forefront of consumer concerns and company strategies, manufacturers are developing more broadly-defined new products to win over consumers. Thus, supported by strong marketing investment, Aldaris launched a new brand of non-alcoholic brewed barley drinks, Barley Bros, in summer 2019.

International investments grow the presence of smaller brands and private label

There is significant company activity in carbonates in Latvia at the end of the review period. While Coca-Cola HBC Latvia is a clear leader, it is seeing a strong drop in off-trade value share in 2019, although a small increase in off-trade volume share is evident.

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