Rtds/High-Strength Premixes in Costa Rica

PROSPECTS

New flavour extensions and packaging updates continue to boost sales

Despite the broad penetration already achieved by major spirit-based RTDs in Costa Rica, local manufacturers and distributors continue to find new development opportunities through segmentation based on new flavour launches and packaging updates. In this context, further consolidation of top-of-mind brands under the control of Florida Bebidas continued to be seen in 2017, particularly Smirnoff Ice, which continued to take advantage of new flavour updates based on the wide versatility provided by vodka-based drinks.

Further segmentation over the coming five years

As demand for RTDs/high-strength premixes becomes more mature, it is expected that major manufacturers and distributors will continue to focus on developing additional levels of segmentation based on gender, age and product innovation. They will use a broader base of trendy flavours and mixes of spirits/wine, whilst taking advantage of top-of-mind umbrella brands capable of generating immediate awareness of such proposals.

Niche development opportunities

It is also expected that players will become more proactive in following the changing expectations of young and more mature consumers who were loyal buyers of high sugar drinks earlier in their lives, but are anticipated to continue moving away from such proposals as their health concerns increase. Products with a healthier positioning, including sugar-free products and products containing all-natural ingredients, are set to find niche development opportunities over the forecast period, targeting middle- and high-income buyers, who will continue to find value in the convenience of RTD proposals.

COMPETITIVE LANDSCAPE

Florida Bebidas maintains its dominant position

Maintaining the same competitive strength from the review period, the local brewer Florida Bebidas maintained its strong dominance in RTDs/high-strength premixes in Costa Rica in total volume terms during 2017. The regional player continued to take advantage of its economies of scale, derived from the leading role it plays in the other alcoholic and non-alcoholic drinks categories in which it participates, benefiting from strong distribution and marketing networks which help to support the high penetration of its broad portfolio of local and international brands.

New competitors are anticipated to increase their penetration to 2022

As other major alcoholic drinks distributors in Costa Rica continue to look for additional revenue opportunities over the coming five years, they are anticipated to increase their attention on the development potential offered by RTDs/high-strength premixes, challenging the dominant position of a single player that concentrates most of its sales on a few brands that focus on flavour variations to increase awareness. In this context, mid-priced international proposals, such as the recently introduced Mokai, are expected to find appealing development opportunities, based on their capacity to provide new alcoholic drinks mixes (cider-based in this case), whilst still offering value and good availability across modern grocery retailers.

Florida Bebidas will have to respond

In response to the new product launches, Florida Bebidas is expected to increase the number of its own offerings, which will address the changing expectations of different segments of young local consumers, whilst reflecting the growing popularity that recent launches such as Bendito Té and Bliss are anticipated to have over the forecast period.

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