Concentrates in Switzerland

PROSPECTS

Preparation requirements limit growth for concentrates but offer potential for innovation

One of the reasons concentrates is smaller when compared to other soft drinks, is that they require preparation. As such, concentrates are missing opportunities for out-of-home consumption and on-the-go consumption trends.

Concentrates manufacturers target older and affluent consumers

Initially focusing on families with children, concentrate manufacturers are seeking to broaden their horizons and reach older consumer groups. This is being done by moving away from traditional flavours, such as mint and raspberry, towards more sophisticated and adult-focused offerings, generally with a premium positioning and higher margins.

In 2019, new flavours including matcha have been released, and hemp has the potential to disrupt the landscape

In Switzerland, hemp has become an attractive proposition as beverage players are innovating using the ingredient. Already available in powder concentrates, there is an opportunity for growth amongst different concentrates.

COMPETITIVE LANDSCAPE

The merger of SodaStream and PepsiCo boosted growth of SodaStream in concentrates

PepsiCo’s current business strategy is focused on brand diversification, and in December 2018 it completed its latest acquisition, the Israeli manufacturer SodaStream who was the leading player in concentrates at the time. Although SodaStream already benefits from strong recognition in Switzerland, the merger between PepsiCo and SodaStream proved to be very successful, boosting growth even-further for SodaStream in concentrates.

Private label sales remain steady in 2019, as consumers appreciate lower price-points

In Switzerland, private label remained the overall leader in concentrates in 2019, with Migros Genossenschaftsbund eG taking the top spot. Private label benefited from an established presence in the health and wellness and organic landscapes.

SodaStream is set to have competition increase, as new entries launch on the landscape

SodaStream is set to have increased competition over the forecast period, as there are new water sprinkler machines entering the landscape such as Aarke, Mysodapop and MySoda. In 2019, retailers such as Aldi and Coop are distributing the new product developments.

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