Other Hot Drinks in Sweden

PROSPECTS

Demand for other hot drinks remains lukewarm

Other hot drinks recorded steep retail volume declines over the early part of the review period, as chocolate-based flavoured powder drinks were considered to be unhealthy due to the high sugar content. Parents opted to purchase fewer of these drinks for their children.

On-the-go Swedes now have more convenient options

Portion packs continue to gain in popularity within other hot drinks. For example, O’Boy offers 10 plastic pouches in one folding carton pack, with the water-soluble portions marketed as creating a beverage that is convenient to drink when out and about, with only the addition of warm water necessary.

Other hot drinks stagnates in foodservice despite lifestyle trends

While retail volume sales of other hot drinks dipped slightly in 2019, foodservice volume sales rose fractionally, as eating out and visiting cafés when meeting friends, working or studying have been gaining in popularity among Swedes over the last decade. With growth in the number of on-trade outlets, the trend is expected to remain strong, which could be jeopardised only by another financial crisis, as Swedish households are rather indebted due to housing loans.

COMPETITIVE LANDSCAPE

Mondelez has a sweet position at the summit of other hot drinks

Mondelez Sverige remained the clear leader in other hot drinks with its O’Boy brand in 2019. The brand is a synonym for chocolate-based flavoured powder drinks for many Swedes.

Organic and lower-sugar offerings are on the rise

In percentage terms, organic or no added sugar products recorded the strongest retail value growth in 2019, including Kung Markatta’s Kung Markatta Chokladdryck and Coop Sverige AB’s Änglamark organic private label other hot drinks. Luthman Backlund Foods AB’s N!CK'S with no added sugar and Lantmännen Cerealia AB’s Ögonblink in convenient portion pouches also performed well, although N!CK'S developed from a lower base.

Prices are creeping up as expensive niche ranges consolidate

The average off-trade unit price of other hot drinks continued to increase at a low but steady rate in 2019. Sales of more expensive products, such as Kung Markatta Chokladdryck and N!CK'S, increased, albeit from low bases, meaning a small rise in the price of dominant brand O’Boy would have had more of an impact on the average unit price.

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