The Impact of Changing Trends on Carbonated Soft Drinks Market
The Global Carbonated Soft Drink market is expected to grow at a compound annual growth rate of 2.17% to reach a market size worth US$ 56,949.96 million by 2027. This market was valued at US$ 48,988.516 million in 2020.
Carbonated beverages or fizzy drinks comprise dissolved carbon dioxide in carbonated water, along with a natural or artificial flavor and sweetener. Usually, fruit juice, high-fructose corn syrup, sugar, or sugar substitutes are used as sweeteners along with other additives such as preservatives, caffeine, colorings, and other excipients. These non-alcoholic effervescent beverages are usually popular among kids due to their high sugar content. With the changing times, soft drinks too have evolved to meet the changing aesthetics and tastes of the consumers. With the addition of various soft drinks like diet cokes and energy drinks has enabled the carbonated beverages to meet the multiple demands of various target groups. Increased adoption of the e-commerce business model and growing demand for diet cokes and similar drinks are expected to drive the market growth.
According to analysts, the growing demand for the diet coke or zero-calorie carbonated beverages is expected to propel the market growth.
In the past few there has been an increasing health consciousness among people of all ages. With the growing number of chronic diseases, people are beginning to put emphasis on a healthy diet. Covid-19, in particular, had accelerated this transition. During the pandemic, the stress experienced by the people increased owing to several uncertainties. According to a study conducted by the American Phycological Association in 2020, for instance, 78 percent of the participants reportedly admitted that the pandemic had brought significant levels of stress in their day-to-day lives. The onset of health conditions associated with stress is prompting consumers to pick healthy food and beverages to enhance their mental and physical well-being. In response to this paradigm shift among consumers, the manufacturers are stepping up to meet their evolving needs. Consequently, the launch of diet coke instantly attracted the attention of many owing to the low calorie and sugar intake. These drinks use artificial sweeteners such as saccharin, aspartame, or cyclamates to sweeten the drinks as a substitute for sugar. Coco-Cola, the global leading beverages manufacturer, had rolled out a new and enhanced formula for its offering, 'Coco-Cola Zero Sugar drink'. This strategic launch had reportedly helped the brand grow its volume by a double-digit figure in 2021. According to the company's annual report 2021, this new formulation has helped the brand propel its sales in 80 percent of the market regions the product has been launched. Recently, in March 2022, Coco-Cola India launched this new offering in India, as well in line with its 'Beverage for Life Strategy'. Similarly, in April 2021, Dr. Pepper launched the Dr. Pepper Zero Sugar series in 23 different appealing flavors.
The increasing initiatives by the various countries to decrease the sugar intake in the diet are further adding impetus to market growth.
At the same time, the sugar reduction initiatives employed by the multiple countries in order to offer consumers more options with smaller portion sizes and less sugar are further expected to supplement this trend. The 'Balance Calorie Initiative' launched by North America's American Beverage Association aims to reduce the number of calories in beverages by 20 percent by 2025. According to the latest report released by the association in early 2022, the beverage calories consumed per person have been reduced by 10 percent, reaching halfway toward its goal. Furthermore, approximately 60 percent of beverages released as of today consist of zero or low sugar. Similarly, the Mexican Beverage Industry Association pledged to reduce the calorie content in its members' product portfolio by 20 percent between 2018 to 2024. At the same time, European Soft Drinks Industry too pledged to decrease the sugar additives in the beverages by an additional 10 percent by 2025 across all the counties under European Union and the United Kingdom. This initiative represented the overall reduction of average added sugars by 33% and is an extension of its past milestones. Several popular beverage manufacturers like Coco-Cola, PepsiCo, and Bulldog Americas Cooperation, among many others, are actively participating in these organizations to offer better offerings to their consumers.
According to analysts, North America is expected to occupy the dominant share of the market in the upcoming years.
By geography, the global carbonated soft drink market is segmented into five regions: Asia Pacific, Europe, North America, South America, and the Middle East and Africa. The dominant market share in North America is attributed to changing dietary habits and the increasing demand for healthy beverages. Furthermore, the increasing initiatives are taken by the companies and organizations, Balance Calorie Initiative, for instance, in North America as cited above, and the strategic developments deployed by several major brands are driving the market share. PepsiCo and Bally's strategic partnership is a prime example of this. In October 2021, the duo entered into a partnership, wherein the latter named the former as the official beverage provider at its casinos and resorts across New Jersey. According to this collaboration, PepsiCo's wide range of beverages portfolio, including carbonated soft drinks, energy drinks, and sparkling waters, among many others, will be supplied to more than 14 Bally's properties spread across ten states. At the same time, Asia Pacific is expected to witness the fastest growth in the coming years for the carbonated soft drink market. The countries like India, China, and South Korea, among many others residing in the regions, are expected to occupy a dominant market share. Coco-Cola had reportedly witnessed high demand for reduced-sugar beverages in the region.
Covid-19 Insights
Covid-19 had a positive impact on the global carbonated soft drink market. Amid the pandemic, the increasing adoption and development of e-commerce played a crucial growth. During the initial period of the pandemic, the stockpiling of groceries and household necessities by consumers, including beverages, played a significant role in the expansion of market sales. Keurig Dr. Pepper, for instance, observed a 4.27 percent surge in the sales of carbonated soft drinks. Furthermore, the growing health and hygiene consciousness amid the pandemic further increased the demand for zero or fewer calorie drinks.
