This report examines the competitive strategies of the major brand owners within global soft drinks as they navigate the recovery from on-trade collapse in 2020. Competitive activity over the past year is profiled, with a focus on the strategic direction of each major producer - from energy drinks M&A to action on sustainability.
Southeast Asia has varying consumer profiles that require companies to adopt different strategies in order to maintain strength in domestic markets or expand to new markets. While local companies’ strategies are typically more tailored towards the consumer segments in each market, global companies’ strategies are often shaped by global initiatives, with varying success across various markets.
For global companies, such as Coca-Cola and PepsiCo, reformulating their products, as well as introducing new products with low or no sugar, has been a focus in recent years. In addition to aligning with global strategies, rising health consciousness among consumers and the implementation of sugar tax in several countries has led to local companies reformulating their products too.
A focus on affordable products remains a common strategy in order to address a large population in Southeast Asia with relatively low disposable incomes. This strategy has enabled some local companies to maintain their leadership, particularly in markets like Indonesia, often against global companies which have good penetration and strong brand equity.
As the COVID-19 situation in Southeast Asia remains uncertain, the opportunity for e-commerce in Southeast Asia remains high. While the share of e-commerce in soft drinks distribution is currently still quite small, more players are pushing for a greater presence in this channel.
While recovery in the foodservice is expected, it remains a distant prospect.
As such, bringing flavours that are typically found in foodservice to retail, particularly tea, could be an opportunity for players to regain some lost ground.
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