Where Consumers Shop for Soft Drinks

December 2021

E-commerce proved to be one of the retail channel winners for soft drinks in 2020 and 2021. This resulted from the pandemic and confirmed consumers’ adoption of this shopping method, due to its convenience and the rise of home delivery. The on-trade shift that benefited retail in 2020 continued in 2021, as several markets still suffered from restrictions. Discounters have benefited from economic uncertainty and have proved to be a strong alternative to supermarkets, due to their low prices.

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Key Findings

Ongoing On-Trade channel shift benefits retail space in 2021

The shift from On-Trade consumption to retail consumption significantly benefited soft drinks retail sales in 2020, and continued to have a positive effect on home consumption in 2021, as the global pandemic situation is not yet close to being fully back to normal and several countries still experienced lockdowns during 2021.

E-commerce leads non-store growth in 2021

The pandemic accelerated the e-commerce trend, as more consumers resorted to online shopping for safety (since this ostensibly reduces the risk of catching the virus by not interacting with other consumers in physical stores) and convenience. 2021 saw the continuation of this trend in soft drinks and the wider fmcg space.

Modern grocery retailers is the largest channel, especially in developed markets

Developed markets lead modern grocery retailing, mostly explained by their good existing infrastructure. Conversely, in emerging markets, it is mostly traditional retailers that have the biggest market share. In terms of strong performers in 2020 and 2021, discounters performed extremely well, especially in Western Europe. This success is mostly driven by their competitive pricing and a wide range of SKUs that compete strongly with supermarkets’ offering. This resonates with consumers who are more cautious with their spending due to economic uncertainty.

Pandemic consolidates e-commerce growth

Asia Pacific is the biggest e-commerce market in the world, and the COVID-19 global pandemic reinforced its position. In Japan, one of the biggest regional markets, Amazon took first place ahead of domestic player Rakuten, thanks to strong logistics capacity and private label offerings that helped it overtake the Japanese player.

On-Trade recovery is expected to take four years

The negative impact of the pandemic on the On-Trade around the world has been unprecedented, and it is expected that it will take until 2024 for On-Trade volume sales to reach the pre-pandemic (2019) level.

Introduction

Scope
Key findings

Industry Snapshot

The recovery of on-the-go formats drives retail value growth in 2021
Healthy living trend boosts bottled water but hurts carbonates
Developing markets contribute the most growth

Channel Shifts

E-commerce boom more than offsets vending share decline
Vending giant Japan accounts for high RTD coffee non-store presence
Store-based retailing dominates; non-store boosted by e-commerce

Store-Based Channels

Traditional retailers remain important in developing markets
Consumers shifting behaviours drive growth of supermarkets
Discounters enjoy strong growth over review period
German groups lead the global discounter ranking
Lidl expands physical and online presence
US leads global growth in modern grocery
Walmart leads in modern grocery owing to strong presence in the US
Private label in juice and carbonates declines in 2021 after 2020 boost
North America dominates volume growth in private label
Economical pricing works for private label bottled water in the US

Non-Store Channels

Asia Pacific is the most significant region for non-store retailing
E-commerce boom reflects growing shift to a digital economy
New consumer behaviour fuels Deliveroo’s growth and quick commerce
Bottled water is the best selling soft drinks category in e-commerce
Amazon recovers lead in e-commerce in 2020
Pandemic consolidates online shopping trend in top 3 regional markets
Asia Pacific contributes most global soft drinks e-commerce growth
Artificial Intelligence in Japan provides boost to vending machines

On-Trade

On-Trade sales start to recover across regions in 2021
It took almost five years for the On-Trade to recover from 2008/2009
COVID-19 has had a devasting impact on soft drinks occasions
Smaller, sustainable, higher margin packaging launches

Future Developments

Developing regions and healthy beverages to drive future growth
Channel breakdown in 2026: Three takeaways
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