Soft Drinks: Half-Year Update

Delivery

This report comes in PPT.

Key Findings

Global soft drinks forecast revised downward in Q2 2025

Expectations for 2025 and 2026 soft drinks volume growth have been lowered as a volatile macro outlook, slower GDP growth and weaker personal income dampen consumption. These revisions suggest that affordability remains a core limiting factor, especially for highly discretionary on-trade beverage categories.

On-trade sales outlook remains weak across Europe and Asia

Western Europe and China have both seen sharp downgrades to on-trade category forecasts. Reduced foot traffic, affordability concerns and a shift to delivery are limiting growth for carbonates, premium bottled water, juices and other foodservice-linked segments.

Pricing power is diminished in a flat inflation/flat volume environment

After contributing meaningfully to value growth in 2023, real price increases have flattened in 2025. With constant pricing expected over the forecast period, value gains will now depend more heavily on stimulating volume growth and category mix.

Input cost relief despite tariff volatility - for now

Despite global trade tensions, most key beverage input costs, such as aluminium, sugar and crude oil, have declined year on year. Coffee remains a significant outlier due to weather-related supply shortages. Orange juice has also eased due to improved inventory and lower climate risk.

Fragmentation and functionality define the competitive landscape

Premium BFY brands are growing, but largely benefitting from affluent consumer interest. Meanwhile, value-seeking behaviour is rising across other segments, widening the gap between functional, digital-native start-ups and aggressively priced local brands.