Carbonates in Russia

PROSPECTS

Cooler summer in 2019 adversely impacts demand for carbonates

While the carbonates category saw continued growth in 2019, the performance was somewhat down on the previous year. This was because the summer weather of 2019 was not as hot as in the previous year, coupled with the maturity of the category in 2018 – a year that saw demand boosted by the FIFA World Cup football tournament.

Reduced sugar non-cola carbonates perform well in light of health trend

With a health trend evident in Russia, reduced sugar non-cola carbonates are expected to see growth over the forecast period, continuing the performance seen in 2019. In line with this trend, 2019 saw Coca-Cola Refreshments ZAO launch several new products in reduced sugar non-cola carbonates: Fanta Citrus, Fanta Manguava, Sprite and Schweppes.

Proposed tax hike likely to result in increased retail prices

As part of the strategy to strengthen public health in Russia, discussion of the introduction of excise taxes on sugary drinks has intensified. State regulation will adversely affect the development of soft drinks if these restrictions are enforced.

COMPETITIVE LANDSCAPE

Multinationals dominate, but local player Aqualife PK OAO gains share

Coca-Cola Refreshments ZAO consolidated its leading position in the carbonates category in 2019, with a share gain underpinned by its new launches in non-cola carbonates. Overall, international players still lead carbonates in Russia, with Coca-Cola and PepsiCo Holdings OOO dominating sales.

Deka AO falls foul of tax investigations

Further shifts in leaders of kvass players are expected, as a major player in the kvass category in Russia, Deka AO, has faced legal problems. In March, a criminal case was initiated against the company under Part 1 of Article 199 of the Criminal Code (non-payment of taxes on a large scale).

Alcoholic drinks players explore expansion into carbonates due to high competition in beer

High competition in the beer environment in Russia is forcing major players in alcoholic drinks to consider expansion into carbonates. In 2019 Baltika Pivovarennaya Kompaniya OOO launched new brand Barley Bros in other non-cola carbonates.

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