After the blip that was the pandemic, resulting in declining sales in 2020, with the on-trade particularly badly hit, soft drinks has since been recording positive growth in Asia Pacific, which is expected to continue in the coming years. Bottled water will remain the dominant product in the region, with zero- and reduced-sugar options of other product types, eg still RTD tea, expected to generally continue outperforming the overall market.
This report comes in PPT.
While off-trade sales quickly returned to their pre-pandemic levels, the size of the on-trade losses suffered in 2020 as a result of lockdowns and foodservice closures meant that this channel was still looking to reach its 2019 sales levels again in a number of countries at the end of the 2019-2024 period. This recovery has also been impacted by the high inflation hitting consumer spending power across the region.
While there is a split between countries like China and Japan, where modern grocery retailers like supermarkets lead sales of soft drinks, and India or Pakistan, where small local grocers still dominate distribution, South Korea boasts the biggest e-commerce share of 30%, while vending (16%) remains a key channel in Japan, popular with soft drinks players for the attractive margins it offers on their products.
Mirroring PepsiCo’s model, Coca-Cola is shifting its focus in India by prioritising brand-building and delegating bottling operations to local partners. By focusing on brand-building and leveraging the expertise of independent bottlers, Coca-Cola India aims to enhance its operational efficiency, improve market penetration and strengthen its position in the Indian soft drinks market.
With inflation pushing up prices, there has been a significant shift towards private label products in the Japanese market, particularly in categories in which consumers find it difficult to perceive differences in taste, such as bottled water. This has led to a noticeable decline in sales for established brands. In response, major manufacturers are implementing strategies to promote their brand image and compete more effectively with private label products.
This is the aggregation of the following categories; Carbonates, Fruit/vegetable juice, Bottled water, Functional drinks, Concentrates, RTD tea, RTD coffee and Asian speciality drinks.
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