Carbonates in Singapore

2021 DEVELOPMENTS

New reduced sugar variants seek to strengthen health positioning

With limited product development in 2020 since manufacturers focused on their core brands, 2021 is starting to see players attempting to excite consumers with new offerings as a means to strengthen their health positioning and boost sales. For instance, Pepsi Black Mango was launched in June, while Coca-Cola Zero Sugar was launched with a new recipe and new packaging design.

Collaborations with celebrities serve to strengthen marketing activities

In order to strengthen marketing activities, players are seeking to collaborate with celebrities to increase their sales by expanding their consumer reach. For example, in 2021, Pepsi collaborated with K-pop group Blackpink to launch a limited edition Pepsi x Blackpink designs in 7-Eleven convenience stores.

Further penetration of e-commerce drives continual shift towards larger pack sizes and multipacks

As various restrictions were imposed throughout 2021 in Singapore, consumers spent prolonged periods of time at home for health, and remote work and school measures. As consumers have been less likely to venture outside with the virus in circulation, they are continuing to turn towards e-commerce to purchase various groceries including soft drinks.

PROSPECTS AND OPPORTUNITIES

Low calorie cola carbonates players set to invest in active marketing and new product developments to strengthen health appeal

As health-conscious consumers have a negative perception of carbonates due to high sugar content, carbonates players such as Coca-Cola and PepsiCo are continuously rebranding their products to strengthen their health positioning. In addition to launching new product variants such as Pepsi Black Mango or a reformulated Coca-Cola Zero Sugar, active marketing and campaigns in line with the government’s Health Promotion Board are key to promotions.

Non-cola carbonate seeks to grow through launch of new flavours

While non-cola carbonates such as tonic water/other bitters remain a niche in Singapore, the latter still offers plenty of growth potential, especially following with the recent entry of brands such as Double Dutch and Fever-Tree which have a premium positioning. The wide range of variants which include cucumber and elderflower seek to appeal to local consumers’ increasing sophistication and add excitement to the category.

On-trade sales will struggle to fully recover over the forecast period

As an increasing number of on-trade outlets reopen as social restrictions further ease, demand for carbonates through this channel is likely to slowly improve. However, it remains unlikely that volume sales of carbonates will fully recover to pre-pandemic levels through on-trade by 2026 due to the severity of declines in 2020.