This report examines the changing distribution environment for global soft drinks, identifying the fastest growth channels across store-based, traditional, modern grocery, non-store and on-trade. As consumer category preferences continue to evolve, how can beverage producers master a new omnichannel environment for non-alcoholic drinks?
Channel distribution within soft drinks has remained broadly stable, even as longer-term shifts occur at the category level, with consumers moving towards packaged bottled water and healthier beverage options at the expense of added sugar drinks, across both take-home, immediate and foodservice points of sale.
As emerging consumer markets in Asia, Latin America and the Middle East and Africa dominate volume (litre) growth opportunities in global beverages, the main retail beneficiaries are fragmented, independent traditional grocers at the global level (even as modern, chained grocery outlets slowly take share in each of these individual markets).
Leading grocery and convenience-store retailers have faced pressure to accentuate healthier, lower sugar options on the shelf, reducing the space available to high sugar products (particularly those marketed towards children). The strong growth in packaged water also provides opportunities for store-brand products, with private label performing strongest in the bottled water category.
While the growth in grocery e-commerce will benefit beverage categories overall (coffee and packaged water perform well in some online channels), the decline in in-store trips could simultaneously threaten lucrative, high-margin immediate consumption occasions unless brands are able to build impulse “moments” into the e-commerce routine.
Beverage brands must prepare for a channel environment that generally prioritises smaller format stores in urban environments, premium foodservice occasions outside the home and e-commerce of all kinds (subscription, delivery and click & collect).
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