World Market for Soft Drinks

Delivery

This report comes in PPT.

Key Findings

Unit prices increased across global soft drinks categories in 2022, driven by significant changes in price/package mix and reduced discounting of major brands by retailers

While retail price inflation within soft drinks may ultimately prove to be a short-term phenomenon, there is evidence that unit price increases in the first half of 2022 moved further and faster than in many other categories within consumer packaged goods. The unfolding consumer response in 2023 – as slower economic growth depresses household incomes – can be expected to accelerate downtrading behaviour and private label share growth in some markets.

Functional brands continue to demonstrate robust growth, led by energy drinks and sports drinks, but also including emerging new functional need-states for soft drinks

Packaged water and carbonated soft drinks brands remain a vital source of volume and profitability for the soft drinks industry, but functional beverages are the most important source of growth. Highly caffeinated “performance” workout energy drinks and electrolyte-enhanced recovery drinks remain an area of substantial innovation, as producers experiment with newer areas, like relaxation, mental focus, digestive health and other areas of functional benefit for beverage ingredients.

More sustainable business practices continue to be implemented within the global soft drinks industry, particularly in the area of plastic packaging waste and returnable or reusable materials

Soft drinks packaging continues to be a major contributor to household plastic waste. Coca-Cola Co, PepsiCo and other leading suppliers have committed to substantial rPET conversion over the next decade, while also promoting increased collection of plastic materials via returnable packaging units in major markets. Water stewardship/responsibility and decarbonisation also remain areas of investment for global soft drinks companies over the long term, in order to meet existing commitments.

A strong recovery in on-premise sales in 2022, following COVID-19 closures, is now imperilled by the prospect of economic downturn in 2023 and reduced consumer spending outside of the home

On-trade soft drinks volumes experienced strong growth in 2021 and 2022, particularly in North America and Western Europe as limited-service restaurants, bars/clubs and other important foodservice channels recovered from pandemic-related disruptions. However, global on-premise volume sales remains below the pre-pandemic 2019 baseline, with the prospect of weaker growth in 2023, as economic circumstances force households to reduce spending outside of the home.

Progress on sugar reduction is reflected in the relatively strong performance of reduced sugar products within carbonates, energy drinks and sports drinks

Excessive sugar consumption is strongly linked with obesity, diabetes and other serious health conditions. Soft drinks producers have responded to the significant role of drinks brands in consumer sugar consumption by offering a broader array of low- or zero-sugar alternatives, with some additional reformulation of core full-flavour products. In 2022, reduced sugar categories across energy drinks and sports drinks strongly outperformed regular, full-flavour variants.