Carbonates in New Zealand

PROSPECTS

Reduced sugar and sugar-free options continue to gain popularity

In line with rising health-consciousness among New Zealanders, demand for reduced sugar and sugar-free products remained a key driver of growth in carbonates off-trade volume and current value sales in 2019. This trend was especially strong in cola carbonates, but was also evident in the non-cola carbonates category.

Recent innovations help to maintain interest in non-cola carbonates

Non-cola carbonates continued to expand at a steady pace in 2019, thanks in part to growing interest in new products and flavour variants introduced towards the end of the review period. For instance, in July 2018 Coca-Cola Amatil launched a Dry Ginger Beer variant of iconic local brand L&P.

Threat from healthier alternatives limits potential for further expansion

The outlook for carbonates over the forecast period is broadly favourable, with stable growth in overall off-trade volume and current value sales projected. However, the category’s potential for further expansion is hampered by increasing competition from other types of soft drinks.

COMPETITIVE LANDSCAPE

Coca-Cola Amatil maintains its dominant position

Coca-Cola Amatil continued to dominate carbonates in off-trade volume and value terms in 2019. The company’s extensive portfolio covers all major categories and includes well-established and widely distributed brands such as Coca-Cola, Sprite, Schweppes and L&P.

Second-ranked Frucor Suntory posts modest recovery in 2019

Frucor Suntory New Zealand Ltd remained the second leading player in carbonates in 2019. The company saw its overall off-trade volume and current value sales in the category decline over 2017-2018, partly due to the failure of the now-withdrawn low calorie product Pepsi Next, but also because core brands such as Pepsi and 7-Up struggled amidst intense competition from a host of rivals.

More players expected to launch smaller pack sizes

The health and wellness trend will remain one of the primary drivers of innovation in carbonates over the forecast period. Aside from developing reduced sugar and sugar-free variants, it is expected manufacturers will continue to try to appeal to health-conscious consumers by making their brands available in smaller pack sizes.

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