Soft Drinks Global Industry Overview

Strategy Briefing

About This Report

Feb 2019

This report provides an overview of the global soft drinks industry in 2018, with topline forecasts at the category level for each region, category and top countries. Areas of growth are identified alongside the top five macro trends expected to shape the global beverage industry and consumer over the next five-years.

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Soft Drinks Global Industry Overview

Examining five trends shaping Soft Drinks

Creating Value in a World of Water

Over the last five-years, bottled water accounted for 96% of the liquid volume growth in global soft drinks across off-trade, bulk retail and on-trade channels. Generating value in a drinks industry increasingly dominated by water is perhaps the core strategic challenge of beverages long-term, utilising flavour, sourcing, packaging and functional ingredients to create new, high-growth premium tiers in water.

The Sustainability Crisis in Packaged Beverages

Soft drinks packaging is the number one source of rigid plastic waste across consumer industries, with no forecast reduction over the short-term. In addition to mounting concern over single-use packaging, the industry faces mounting pressure to address long-term issues relating to water security, water scarcity, and fair water rights in many regions.

The End of Sweetness? Diverging Post-Sugar Routines

Consumer awareness of sugar-reduction is high, with almost half of global consumers citing limited or no-added sugar as a food and beverage priority according to a recent Lifestyle Survey. However, there remain vast differences in preferred sugar reduction strategies, linked to divergent regional and generational attitudes to artificial sweeteners, flavoured water alternatives, and the tolerance of less-sweet product formulations.

Omnioccasions: Finding Growth Between the Lines

Beverage brands are seeking growth ‘between the cracks’ of existing retail channels of trade to find new consumer occasions for beverage growth, including automated retail and public/institutional venues outside the home. Similarly, there’s an urgent need to stimulate beverage sales in foodservice: on-trade soft drinks’ growth has generally lagged behind retail, but represents an opportunity given strong growth in meals consumed outside the home.

Prevention & Purpose: The Growing Role of Beverages in Wellness Routines

Functionality in beverages is evolving from simply energy and hydration to a broader list of need-states and ingredients. Drinks for relaxation, strength, gut health, beauty, and general well-being can be a long term value driver in beverages. Packaged soft drinks will form a bigger part of preventative health regimens and play more of an everyday, throughout-the-day role in wellness.

Introduction

Scope
Important changes to research coverage in 2019
Examining five trends shaping Soft Drinks
Areas of opportunity in 2019

Global Outlook

A positive performance for global Soft Drinks in 2018
Soft Drinks is the sixth largest consumer goods industry
Japan stays top in terms of per capita Soft Drinks spending
Asia and the MEA are the standout growth regions for global drinks
Bottled Water and Low-Calorie Carbonates trend up in 2018
Premium, less-sweet RTD Tea and cold brew coffee perform well
China and India lead forecast growth markets over 2018-2023
Beverages ‘Market Potential’ demonstrates long-term opportunity
E-commerce, warehouse and discount channels outperform in drinks

Leading Companies and Brands

Global Soft Drinks is becoming more fragmented
Although Coca-Cola, PepsiCo stay on top, regional players are gaining
Energy and added-value water dominate top brands in 2018
Standout brands 2016-2019

Top Five Trends Shaping the Industry

Global Megatrends and the Soft Drinks industry
Examining five trends shaping Soft Drinks
Creating value in a ‘world of water’
The sustainability crisis in packaged beverages
The end of sweetness? Diverging post-sugar routines
Omnioccasions: finding growth between the lines
Prevention & purpose: the growing role of beverages in wellness routines

Market Snapshots

Global snapshot of Carbonates
Global snapshot of Bottled Water
Global snapshot of Juice
Global snapshot of RTD Tea
Global snapshot of RTD Coffee
Global snapshot of Concentrates
Global snapshot of Energy Drinks
Global snapshot of Sports Drinks
Global snapshot of Asian Speciality Drinks
Regional snapshot: Asia Pacific
Regional snapshot: North America
Regional snapshot: Latin America
Regional snapshot: Western Europe
Regional snapshot: Middle East and Africa
Regional snapshot: Eastern Europe
Regional snapshot: Australasia

Appendix

Definitions