Soft Drinks: Quarterly Briefing Q2 2018

Overall stability in global soft drinks

GDP forecasts are largely in line with baseline forecasts from January 2018, contributing to welcome stability in the short-term soft drinks forecast. A modest increase in US growth prospects contributes to a small overall increase in global projections, while most regions remain consistent with initial researched projections.

Hydration categories yield most promising opportunities

Hydration products - ranging from packaged, still bottled water to added-value functional water and plant waters - represent the biggest slice of opportunity globally as consumers prioritise lower sugar options and added-value water. Hydration consequently remained the focal point of innovation in Q2 for global producers, including in Asia where opportunities are strongest long term.

Strong quarter from Coca-Cola

Among major beverage producers, Coca-Cola experienced the most positive quarter of growth in April 2018, with unit case volume increasing system-wide. The company experienced a long-awaited rebound in the company’s beleaguered Diet Coke low-calorie cola brand in the US after a major rebranding and new flavour launch earlier in the year.

First look at the new Keurig Dr Pepper

The other major piece of company news in the beverages industry was the first full public filings of the Keurig Dr Pepper company, a venture formed following January’s announcement of an USD18.7 billion acquisition of Dr Pepper Snapple Group by Keurig Green Mountain - itself a vehicle of the hot drinks investment group JAB Holdings Co since 2016. The new company has a strong presence across the major expected growth categories in US beverages.