Beverages Industry Analyst Brian Morgan discusses five types of soft drinks in this global industry overview. Morgan explains how the soft drinks industry was impacted by the recession – value sales in soft drinks were down globally, and a slowdown in growth impacted developed markets.
Carbonates, which has experienced some decline, still composes 40% of all volume sales of soft drinks worldwide. There is room for growth in this sector particularly in undeveloped countries where the markets have not been tapped.
Bottled water surpassed carbonates in 2008 to become the leading category in soft drinks by volume terms. But like most categories, there was a slowdown in growth in 2009. This was due partly to the economy, but also because of a growing thought that bottled water packaging is excessive and harms the environment. There are still opportunities for growth in added-value water, specifically sports waters.
Juices have also seen a slowdown during the recession, particularly in developed markets. Most of the growth prior to the recession had been seen in 100% juices and healthier juice drinks. Since the recession, fruit-flavored drinks, which offer minimal juice content, came out on top in terms of growth.
Functional drinks, a category comprised of sports drinks and energy drinks, had their struggles in the recession as well. Sports drinks suffered an alarming slowdown, mainly due to Gatorade showing decline for the first time after years of double digit growth. Functional waters, such as Vitamin Water, took sales away from sports drinks. Energy drinks have struck a chord with young people, who replaced coffee or soda with energy drinks as a source of energy boosts. Still, the recession pushed sales of energy drinks down to single digit growth.
One category that continues to perform well is ready-to-drink tea. RTD Tea combines many of the attributes that people look for in beverages: natural healthiness, fruit flavors and antioxidants, and well-known brand names. Segmentation in RTD is becoming more prevalent. In China, for example, regional brands are mixed with new national brands that are coming onto the scene.
This video is also available to watch on