Demand for FF beverages is still yet to recover from the introduction of the government’s sugar tax in 2018 which resulted in prices soaring and putting them out of the reach of some lower income households. This situation was exacerbated by the outbreak of COVID-19 which put further pressure on consumer incomes and pushed more consumers to look for cheaper alternatives in 2020 and 2021.
FF plant-based and malt-based hot drinks saw strong growth in retail volume terms in 2020, particularly for the Milo brand, with consumers seeing this as a relatively healthy option. Some households chose to stockpile these products in 2020 due to concerns about potential supply shortages, which resulted in the category seeing flat growth in retail volume terms in 2021.
Despite a challenging year, the leading players in FF beverages continued to add variety to their portfolios, with one eye on the future and the developing health and wellness trend. For example, Mondelez Philippines launched Tang Coco Plus Buko Pandan under its popular Tang brand of powder concentrates.
Both retail volume and retail current value sales of FF beverages are set to return to growth from 2022 onwards. With consumers spending less time at home as life begins to return to normal and the threat posed by the pandemic fades, on-the-go consumption will revive.
Sales of FF hot drinks should benefit from the growing health and wellness concerns of locals many of whom will likely seek out healthier drinks options over the forecast period. For many families in the Philippines fortified/functional products are seen as important in ensuring they receive a complete nutrition.
E-commerce is set to emerge as an important source of growth for FF beverages over the forecast period, although traditional and modern retail channels are likely to remain important for the leading players. In the short term, home seclusion should continue to fuel demand for FF beverages through e-commerce with platforms such as Lazada and Shopee seeing huge gains since the start of the pandemic.
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This category includes fortified/functional beverages. When identifying fortified/functional products, we focus on products to which health ingredients or/and nutrients have been added as well as brands that are positioned to deliver a certain functionality. To be included here the enhancement has to be highlighted in the label or hold a health claim/nutritional claim. Fortified/functional food and beverages provide health benefits beyond their nutritional value and/or the level of added ingredients wouldn’t normally be found in that product. To merit inclusion in this category, the defining criterion here is that the product must have been actively fortified/enhanced during production. As such, inherently healthy products such as 100% fruit/vegetable juices are only included under "fortified/functional" if additional health ingredients (e.g. calcium, omega-3) have been added. To be included, the health benefit needs to form part of positioning/marketing of the product.See All of Our Definitions
This report originates from Passport, our Fortified/Functional Beverages research and analysis database.
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