Euromonitor International’s soft drinks forecast has been updated in accordance with new macroeconomic data. While the 5-year forecast remains consistent with expectations at the time of publication, there remains a high degree of uncertainty about on-trade availability in 2021/2022. In Europe and the US, the first quarter offers signs of accelerating recovery, with vaccine rollouts and increased consumer mobility boosting out-of-home channels, as some government restrictions are eased.
This report comes in PPT.
Euromonitor International’s 2021-2025 baseline forecast for the soft drinks industry, published in November 2020, has been updated in line with the new macroeconomic outlook. The 5-year global industry forecast remains largely consistent with initial expectations, albeit with a high degree of uncertainty about on-trade assumptions and 2021 downgrades in some developing countries. Volume growth of 4.5% is expected for FY2021, a 0.2pp downgrade versus the researched baseline.
The first two months of 2021 presented the first signs of an accelerating recovery, as the US, the UK, Israel and many Western European markets accelerated their roll out of COVID-19 vaccines. Consumer mobility outside the home has also rebounded strongly in Australia, New Zealand and China as government restrictions are eased. Many soft drinks bottlers reported a quarterly increase in on-premise sales during February trading updates.
The road to recovery remains a long one, however, particularly for soft drinks sold through foodservice channels, following 20-40% volume declines experienced in major markets during FY2020. Permanent closures within restaurants and bars will impact overall volume, with value-seeking behaviours also likely to limit a speedy return to pre-pandemic consumption outside of the home.
In an uncertain operating environment, new product innovation has been limited over the last quarter. Leading manufacturers have instead reduced SKUs, discontinued underperforming brands and focused on higher margin changes to price/package mix to compensate for reduced on-premise business, with some targeted introduction of functional products within existing core brands.
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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