The dilution ratio of concentrates is expected to become a key tool to avoid additional charges derived from the sugar tax which came into effect on 1 April 2018 (set at ZAR0.21/100ml of sugar added above 4g/100ml).
Following the absence of Brookes in concentrates in 2018, new entrants are expected to capitalise on the opportunity by introducing reduced sugar ranges to attract a niche audience. Such products are expected to be positioned as premium, with higher LSM consumers becoming increasingly aware of product content.
Liquid concentrates will continue to hold the highest value share within the category despite innovation emerging in powder variants. The trend will be supported by the equity of brands such as Oros, as well as the extensive distribution channels held by players such as Continental Beverages.
As economic constraints impacted South Africa, with consumers adjusting their purchases to their shrinking disposable incomes, price increasingly became a key competitive tool. Manufacturers were further challenged by private label’s expansion, as such products were often sold at a more affordable price.
Bromor Foods retained its leadership of concentrates in 2018 despite the absence of Brookes, which resulted in the company losing value share. Furthermore, the company was challenged by a declining demand for its sports drink concentrate Game, with consumers increasingly shifting to RTD variants claimed to be more convenient.
During the review period, Kraft Foods officially discontinued the distribution of Tang Plus. The move was partly due to disruptive supply with the Rand depreciation exacerbating the situation, as weakened currency increased importation costs.
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This industry report originates from Passport, our Soft Drinks market research database.