Carbonates in Singapore

PROSPECTS

Unhealthy perception drives down carbonates sales

Carbonates continued its overall decline in 2018, negatively impacted by growing health-consciousness amongst consumers in Singapore. An increasing number of consumers perceive carbonates to be too high in sugar and switched to alternative soft drinks with a healthier positioning such as RTD tea and bottled water, especially on-trade.

Players need to look to alternative options to halt decline

The decline in carbonates is expected to continue into the forecast period, as health-conscious consumers move further away from carbonates. Active marketing and creative packaging designs are expected to be a key form of product differentiation, as players compete for share in a shrinking landscape.

Product innovation focuses on reduced sugar

Amidst the overall decline of carbonates due to consumer perception of high sugar content and thus unhealthy, brands rushed to launch reduced sugar variants across various carbonates to appeal to health-conscious consumers. Low calorie cola carbonates witnessed the launch of Pepsi Black in 2018 as a response to the release of Coca-Cola Zero Sugar in 2017, both containing no sugar.

COMPETITIVE LANDSCAPE

Coca-Cola Singapore sweetens deal with Stevia

A key product development in 2018 was Coca-Cola Singapore’s introduction of reduced sugar variant Coca-Cola Stevia. Stevia is a plant extract which can act as a natural sweetener for beverages, allowing Coca-Cola Stevia to reduce its sugar content by 35% compared to the usual Coca-Cola Classic.

Other brands to follow Coca-Cola’s lead in healthier carbonate offerings

While the performance by Coca-Cola Stevia remains to be seen, it has set a precedent, with an increasing number of carbonates brands expected to introduce Stevia and other natural sweeteners to reduce their sugar content. This will allow them to both appeal to health-conscious consumers looking for reduced sugar beverages and pre-empt against a possible sugar tax that could be implemented.

PepsiCo attempts to keep pace with Coca-Cola

Following Coca-Cola Singapore’s launch of Coca-Cola Zero Sugar in mid-2017, PepsiCo responded by launching its own zero sugar Pepsi Black in early 2018 to compete. Pepsi Black is calorie free and comes with the Health Promotion Board’s Healthier Choice Symbol.

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