Other Hot Drinks in Denmark

PROSPECTS

Unhealthy image continues to curb demand for other hot drinks

Other hot drinks posted a slight decline in retail volume sales in 2018, maintaining the negative trend observed throughout the review period. The primary reason for the poor performance of this category in recent years is that other hot drinks products are widely perceived as being high in sugar and lacking in nutritional value, which puts them at odds with the prevailing trend towards rising health awareness among Danes.

Lack of investment undermines development potential

Another factor that contributed to the poor performance of other hot drinks over the review period was that the category witnessed remarkably little innovation and promotional activity, which limited its ability to retain the interest of consumers. Given that demand in the category has been falling steadily for several years, it is not expected that investment in new launches and marketing campaigns will improve significantly over the short-to-medium term.

Winter is the peak demand season for other hot drinks

The period between December and Easter is the peak demand season for other hot drinks in Denmark. This is because chocolate-based flavoured powder drinks are traditionally seen as beverages for keeping warm on cold winter days.

COMPETITIVE LANDSCAPE

Nestlé maintains its dominant position in 2018

Nestlé continued to dominate other hot drinks in retail value sales terms in 2018. This was mainly due to the commanding lead held by its Nesquik brand, though the company also offers the Nestlé Choco Hot brand.

Presence of private label products remains weak

The aggregate value share of private label in other hot drinks remained low in 2018, after having declined continuously over the review period. While the expansion of private label portfolios is a key strategic focus for major retailers in Denmark, their interest in this category is limited due to its relatively small size and poor prospects.

Smaller players could benefit from launching healthier products

Due to the dominant position of Nestlé and the category’s limited potential for expansion, new product development activity in other hot drinks looks set to remain minimal over the forecast period. Accordingly, no significant changes in the competitive environment are expected.

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