Despite fortified/functional beverages recording slower retail value and volume growth in 2020 compared to 2019, most likely linked to reduced on-the-go consumption, the COVID-19 pandemic contributed to further positive growth for certain categories. Although the increase was weaker than in previous years, this included growth for sports drinks, functional waters and energy drinks as Australians adapted their routines in response to the lifestyle changes wrought by the pandemic.
Australia has an active young population who continued to consume functional water and sports drinks during 2020. Sales of these FF beverages were supported by the fact that Australia’s lockdown period did not last for more than two months in the majority of states and in many areas, exercise was still allowed in parks and outdoor areas.
Coca-Cola Amatil recorded further value growth to maintain a healthy lead over second-ranked Frucor Suntory Australia Pty Ltd in fortified/functional beverages in 2020, reflecting the player’s wide portfolio across a number of categories. Coca-Cola aimed to boost sales of its sports drinks range, notably Powerade, through the “Sweat It Out” campaign launched in January 2020.
Over the forecast period, fortified/functional beverages is expected to record stronger average retail value growth at constant 2020 prices compared to the review period. FF energy drinks and FF RTD teas are set to offer some of the best growth prospects after the COVID-19 pandemic boosted awareness around health and the need to remain physically active in order to maintain a healthy immune system.
Following the launch of Monster Super Fuel by Coca-Cola Amatil, innovation is expected to focus on the emergence of hybrid energy and sports drinks as consumers increasingly seek added functional benefits in their traditional drinks. This is set to translate into more energy drinks with electrolytes and key vitamins such as B3 and B6 that are designed around aiding focus and exercise recovery.
Innovation is expected to extend to packaging as smaller formats become a key element of a strategy to grow the consumer base for fortified/functional beverages to include lower-income demographics. Within distribution, leading grocery retailers are expected to continue their use of strong price discounting to attract new consumers to functional water, which offered further growth potential at the end of the review period.
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