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On-trade Soft Drinks - China - April 2017

Published By :

Mintel

Published Date : May 2017

Category :

Beverages

No. of Pages : N/A

Multiple healthy ingredients are the essential purchase driver of on-trade soft drinks. Fruit- and milk-based blended smoothie can harness an opportunity as they are the most preferred ingredients. At the same time, restaurants and beverage manufacturers may also want to utilise natural ingredients to create strong sensorial appeal to attract consumers.

Table of Content

OVERVIEW
What you need to know
Covered in this report
Included
Excluded
Definitions
Figure 1: Definition of low/mid/high MHI groups, by city tier

EXECUTIVE SUMMARY
The market
A market enjoying stable growth
Figure 2: Best- and worst-case forecast for sales value of on-trade soft drinks, China, 2011-21
Packaged soft drinks dominate in on-trade channel
Figure 3: Value shares of on-trade soft drinks, by market segment, China, 2016
Figure 4: Value sales of packaged on-trade soft drinks, by market segment, China, 2016
Key players
Brands highlight food pairing, launch low-sugar versions, and strengthen sensorial appeal to attract consumers
The consumer
More soft drinks and less alcoholic drinks
Figure 5: Consumption trends of on-trade soft drinks, January 2017
Packaged soft drinks dominate in on-trade channels
Figure 6: Penetration of on-trade soft drinks, January 2017
Exploring new flavours and not just health benefits
Figure 7: Attitudes towards on-trade soft drinks, health benefits, January 2017
Figure 8: Attitudes towards on-trade soft drinks, new flavours, January 2017
Healthy ingredients are the most important purchase driver
Figure 9: Purchase drivers for on-trade soft drinks, January 2017
Fresh fruits, and vitamins and minerals are the most popular ingredients
Figure 10: Preferred ingredients, January 2017
Tea drinks have most distinctive image
Figure 11: Correspondence analysis – Perceptions of different beverages, Jan 2017
What we think

ISSUES AND INSIGHTS
What makes an ideal beverage menu?
The facts
The implications
Fruit- and milk-based smoothies can exploit a gap in the market
The facts
The implications
Eye-catching drinks made from healthy ingredients
The facts
The implications
Figure 12: Recipe of rainbow drinks, Starbucks, summer 2016
Figure 13: Grapefruit Soju, Bei Le restaurant, Shanghai, 2017

THE MARKET – WHAT YOU NEED TO KNOW
A market enjoying stable growth
Increasing spending on eating out and shifting from alcoholic drinks can drive future growth
Rise of beverage outlets and meal delivery can pose a challenge
Packaged drinks dominate on-trade channels

MARKET SIZE AND FORECAST
A market enjoying stable growth
Figure 14: Sales value of on-trade soft drinks, China, 2011-16
Stable growth expected to continue
Figure 15: Best- and worst-case forecast for sales value of on-trade soft drinks, China, 2011-21

MARKET DRIVERS
Increasing spending on eating out
Shifting from on-trade alcoholic drinks
Figure 16: Consumption trends of on-trade alcoholic drinks, January 2017
Figure 17: Consumption trends, drinking less alcoholic drinks in on-trade channels, January 2017

MARKET CHALLENGES
Competition from specialised beverage venues
Rise of O2O food delivery service

MARKET SEGMENTATION
Packaged soft drinks dominate in on-trade channel
Figure 18: Value shares of on-trade soft drinks, by market segment, China, 2016
Figure 19: Sales value of on-trade soft drinks, by market segment, China, 2011-16
Within packaged soft drinks, juice is the leading category, followed by herbal tea and CSDs
Juice category goes premium
Figure 20: Value sales of packaged on-trade soft drinks, by market segment, China, 2016
Herbal tea slows down in growth
Carbonated Soft Drinks (CSDs) lose popularity
Yogurt and Plant Protein Drinks (PPDs) have great potential

KEY PLAYERS – WHAT YOU NEED TO KNOW
Brands highlight food pairing, launch low-sugar versions, and strengthen sensorial appeal to attract consumers
Innovation highlights

COMPETITIVE STRATEGIES
Highlighting the concept of food pairing
Figure 21: Eat with Meals, Master Kong, October 2016
Figure 22: Ginger Coke, Coca-Cola China, March 2017
Figure 23: Carbonated natural mineral water, Badoit
Going healthy with low-sugar versions
Figure 24: Low sugar and sugar-free versions of herbal tea, Wang Lao Ji, June 2016
Figure 25: Qiqo Hao You, 2016
Strengthening sensorial appeals
Figure 26: Examples of drinks in appealing colour and stylish packaging, 2016

WHO’S INNOVATING?
Jia Duo Bao: Angry Birds limited edition
Figure 27: Angry Birds limited edition, Jia Duo Bao, May 2016
Mizone: Product lines exclusive to on-trade channels
Figure 28: Xi Qi and Chi Huo Zhuang, Mizone, May 2016
Coca-Cola Plus: Healthiest Coke yet
Figure 29: Health benefits of Coca-Cola Plus, Coca-Cola Japan, February 2016
Specialised beverage venues in Taiwan: Appealing colour and fun packaging
Figure 30: Examples of drinks with appealing colour, Taiwan, 2016
Figure 31: Examples of fun packaging, Taiwan, 2016

THE CONSUMER – WHAT YOU NEED TO KNOW
Consumers are more exploratory with flavours at on-trade than retail channels
Healthy ingredients are the most important purchase driver
Fruits, and vitamins and minerals are the most popular ingredients
Pairing with spicy dishes is worth targeting

CONSUMPTION TRENDS OF ON-TRADE SOFT DRINKS
People are drinking more soft drinks and less alcoholic drinks
Figure 32: Consumption trends of on-trade soft drinks, January 2017
Some consumers are shifting from freshly-made soft drinks to packaged ones, but less the other way around
Figure 33: Consumption trends, drinking less freshly-made and packaged on-trade soft drinks, January 2017
Female consumers aged 25-29 are fans of freshly-made soft drinks
Figure 34: Consumption trends, drinking more freshly-made on-trade soft drinks (percentage difference as compared to total), by age and gender, January 2017

PENETRATION OF ON-TRADE SOFT DRINKS
Packaged soft drinks dominate on-trade channels
Figure 35: Penetration of on-trade soft drinks, January 2017
Packaged probiotic drinks are most liked
Figure 36: On-trade penetration of probiotic drinks (percentage difference as compared to total), by age and gender, January 2017
Packaged and freshly-made juices each have their own stage
Figure 37: On-trade penetration, freshly-made juice/smoothie and packaged juice, by age, January 2017
Figure 38: Minute Maid Essentialdelight, Coca-Cola China, October 2016
Other categories follow closely
Popularity of freshly-made drinks varies across regions
Figure 39: On-trade penetration, freshly-made soft drinks, by region, January 2017

ATTITUDES TOWARDS ON-TRADE SOFT DRINKS
Nearly half of consumers are willing to pay premium for on-trade soft drinks
Figure 40: Attitudes towards on-trade soft drinks, paying premium, January 2017
Figure 41: Selected purchase drivers for on-trade soft drinks and preferred ingredients, January 2017
Health benefits are a more important concern than flavours
Figure 42: Attitudes towards on-trade soft drinks, health benefits, January 2017
When dining out, consumers are more exploratory with new flavours
Figure 43: Attitudes towards on-trade soft drinks, new flavours, January 2017
Drinks with a mild taste and a thin texture are preferred
Figure 44: Attitudes towards on-trade soft drinks, taste and texture, January 2017

PURCHASE DRIVERS FOR ON-TRADE SOFT DRINKS
Ingredients are what consumers care about most
Figure 45: Purchase drivers for on-trade soft drinks, January 2017
Figure 46: Separate seasonal menu, Cai Ni, Shanghai, March 2017
Consumers from tier one cities are adventurous about rare ingredients
Figure 47: Purchase drivers for on-trade soft drinks, is made with rare ingredients, by city tier, January 2017
Signature beverages can also help to boost sales
Young consumers are easily attracted by appearance
Figure 48: Purchase drivers for on-trade soft drinks, by age, January 2017

PREFERRED INGREDIENTS OF ON-TRADE SOFT DRINKS
Fresh fruits and vitamins and minerals are the most popular ingredients
Figure 49: Preferred ingredients of on-trade soft drinks, January 2017
Room for fresh vegetables and superfoods
Figure 50: Preferred ingredients of on-trade soft drinks, fresh vegetables and superfoods, by age and gender and household income, January 2017
More education needed on sparkling drinks
Figure 51: Cross-category innovations of carbonated drinks

PERCEPTIONS OF DIFFERENT SOFT DRINKS
Tea drinks have most distinctive image
Figure 52: Correspondence Analysis – Perceptions of different soft drinks, Jan 2017
Pairing with spicy dishes is worth targeting
Figure 53: Perceptions of different soft drinks, going well with spicy dishes, January 2017
Fast food restaurants can introduce a wider variety of drinks
Figure 54: Perceptions of different soft drinks, good for fast food restaurants, January 2017

MEET THE MINTROPOLITANS
Greater acceptance of paying premium for soft drinks when dining out
Figure 55: Attitudes towards on-trade soft drinks, paying premium, by consumer classification, January 2017
Mintropolitans value health benefits more and explore new flavours
Figure 56: Attitudes towards on-trade soft drinks, health benefits and new flavours, by consumer classification, January 2017
Marketing schemes and eye-catching styles play a larger role
Figure 57: Selected purchase drivers for on-trade soft drinks, by consumer classification, January 2017

APPENDIX – MARKET SIZE AND FORECAST
Figure 58: Sales value of on-trade soft drinks, China, 2011-21

APPENDIX – MARKET SEGMENTATION
Figure 59: Best- and worst-case forecast for sales value of packaged on-trade soft drinks, China, 2011-21
Figure 60: Best- and worst-case forecast for sales value of freshly-made on-trade soft drinks, China, 2011-21
Figure 61: Sales value of on-trade soft drinks, by segment, China, 2011-21

APPENDIX – METHODOLOGY AND ABBREVIATIONS
Methodology
Figure 62: Map of surveyed cities
Fan chart forecast
Abbreviations

List of Table

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