Sparkling Drinks - China - September 2020

Sparkling Drinks - China - September 2020

  • Mintel
  • September 2020
  • Food
  • 0 pages

Report Description

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Sparkling beverages have proven their popularity through the surge in sales of sparkling water, and their wide range of application will allow extension into other drinks categories. The shrinking population of key younger consumers and enduring concerns around sugar pose challenges for CSDs going forward. With low/no/reduced (L/N/R) sugar and calories being the new standard, the industry’s efforts in product innovation to bring ‘better for you’ (BFY) items to the market would sustain the market growth.

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Table of Contents

OVERVIEW

What you need to know
Key Issues covered in this Report
Report Scope

EXECUTIVE SUMMARY
The market
Loss in on-trade consumption means a market contraction in 2020
Figure 1: Short-, medium- and long-term impact of COVID-19 on CSDs and sparkling drinks, August 2020
Total CSD volume consumption expects to recover to 2019 level between 2023-24
Figure 2: Total volume sales (retail and non-retail) and forecast of CSD, China 2015-25
Figure 3: Retail value sales and forecast of CSD, China 2015-25
Other sparkling drinks with healthier image will recover more quickly than CSD
Companies and brands
Coca-Cola’s healthier alternatives continue to strengthen its market leadership
Figure 4: Retail value and volume share of leading CSD players, 2017-2020
Re-branding domestic CSD players to evoke nostalgic feeling
The consumer
Sparkling drinks enjoy popularity during and after COVID-19
Figure 5: Changes in consumption, April 2020
Bubbles equal to refreshing and delightful drinking experience
Figure 6: Consumption impression, by gender, April 2020
Under-30s finding it hard to differentiate diet and regular CSDs
Figure 7: Perception of diet CSDs, April 2020
COVID-19 lockdown shifts focus to online retail spaces to manage risks
Figure 8: Purchasing channel, April 2020
Opportunities to attract males with carbonated sports and energy drinks
Figure 9: Interest in innovation, April 2020
Taste remains the key decision factor for majority
Figure 10: Attitudes towards sparkling drinks, April 2020
What we think

ISSUES AND INSIGHTS
Increased health awareness prompted by COVID-19 outbreak accelerating L/N/R sugar trend
The facts
The implications
Figure 11: Claims in new sparkling non-alcoholic drinks launches, China, Jul 2015 – Jun 2020
Adaptability of carbonation opening up blurring opportunities in drinks
The facts
The implications
Figure 12: Examples of sparling sports and energy drinks, UK and China 2019-2020
Young consumers aged 18-29 could make better choice facilitated by clarified on-package information
The facts
The implications

THE MARKET – WHAT YOU NEED TO KNOW
COVID-19 will impact on-trade volume sales of CSD
Increasing numbers of players fuelling competition in sparkling water

MARKET SIZE AND FORECAST
Growth in retail sales cannot offset loss in on-trade consumption
Figure 13: Volume and value sales of CSD, China 2015-20
Mintel forecasts volume sales will return to pre-COVID level between 2023-24
Figure 14: Retail volume sales and forecast of CSD, China 2015-25
Figure 15: Retail value sales and forecast of CSD, China 2015-25
Figure 16: Non-retail volume sales and forecast of CSD, China 2015-25
Figure 17: Total volume sales (retail and non-retail) and forecast of CSD, China 2015-25

MARKET FACTORS
COVID-19 outbreak fuelling innovation in healthy version of fizzy drinks
Government proactively encouraging sugar reduction as part of healthy dietary guideline
More players entering fierce competition by adding fizzy drinks to drive consumption

KEY PLAYERS – WHAT YOU NEED TO KNOW
Domestic CSD players re-entering the market fuelling competition
Emerging brands extending product lines to sparkling water with signature flavours
Sugar becoming the public enemy
Sugar spotlight sets the tone for product innovation

MARKET SHARE
Coca-Cola’s growth led by increased exposure through online channels and healthy variation; PepsiCo suffered in both value and volume sales
Figure 18: Retail value and volume share of leading CSD players, 2017-2020
Domestic brands re-entering competition aiming to evoke childhood memories
Figure 19: Hankou Er Change’s newly released CSD featuring cities in China

COMPETITIVE STRATEGIES
Adopting ‘three zeros’ as the new standard
Figure 20: Fsjuice’s flavoured sparkling water with ‘three zeros’ claims
Mega-brand leveraging the power of digitisation to create synergy
Figure 21: Coca-Cola’s ‘coke with meal’ campaign with Meituan-Dianping
Signature flavours helping famous teashops to expand
Figure 22: MiniHeytea flavoured sparkling water poster claiming ‘quality guaranteed by Heytea’
Levelling up the sponsorship game to stay close to young consumers
Figure 23: Nongfu’s TOT sparkling rice wine and tea drinks sponsoring popular reality show

WHO’S INNOVATING?
Competition bubbling up in flavoured sparkling water
Figure 24: Percentage of newly launched sparkling non-alcoholic drinks subcategories, China, Jul 2015 – Jun 2020
Figure 25: Flavoured sparkling water, China
Slashing sugar in non-alcoholic drinks to help consumers reduce waistline
Figure 26: Average sugars (grams per 100g/ml) in new non-alcoholic drinks launches, China, Jul 2015 – Jun 2020
Figure 27: Claims in new sparkling non-alcoholic drinks launches, China, Jul 2015 – Jun 2020
Fizzy juice positioning as a light, nutritional, and flavourful hydration
Figure 28: Sparkling juice drinks, global
Low ABV fizzy booze aiming to capture attention in China
Figure 29: Carbonated RTD alcoholic drinks, China
Figure 30: Hard seltzer, global
Caring for digestive health with functional ingredients beyond fibre
Figure 31: Flavoured sparkling drinks with gut friendly claims, global
Protein and vitamins bringing fizzy drinks above and beyond
Figure 32: Upbeat sparkling protein water, UK
THE CONSUMER – WHAT YOU NEED TO KNOW
Palatable flavours and bubbles go well together
Confusion exists in differentiating sugar from sugar alternatives in carbonated drinks
Premium opportunities in adding carbonation to soft drinks

CONSUMPTION USAGE
Intriguing flavours and bubbles are hard to resist
Figure 33: Changes in consumption, April 2020
Females aged 25-29 enthusiastic about dabbling in healthy drinks
Figure 34: Changes in consumption, by gender and age, April 2020
Tier 2 and lower cities usage catching up
Figure 35: Changes in consumption, those who claimed ‘drinking more’ and ‘about the same’ by city tiers, April 2020
Education level is another divider for consumption behaviour
Figure 36: Changes in consumption, those who claimed ‘drinking more’ by education, April 2020
CONSUMPTION IMPRESSION
Carbonation creates refreshing and delightful drinking experiences
Figure 37: Consumption impression, by gender, April 2020
Multi-sensational drinking experience enticing consumers aged under 30
Figure 38: Consumption impression, by gender and age, April 2020

PERCEPTION OF DIET CSD
Diet CSD stands for trendiness; but confusion exists
Figure 39: Perception of diet CSD, April 2020
Young consumers aged under 30 puzzled by sugar and calories in CSD
Figure 40: Perception of diet CSD, by gender and age, April 2020
Figure 41: Perception of diet CSD, by gender and age, April 2020
High income earners’ preference is rooted in their ability to distinguish the difference
Figure 42: Perception of diet CSD, by monthly personal incomes, April 2020
Figure 43: Perception of diet CSD, by monthly personal incomes, April 2020
Figure 44: Perception of diet CSD, by monthly personal incomes, April 2020
Figure 45: Perception of diet CSD, by monthly personal incomes, April 2020
Figure 46: Perception of diet CSD, by monthly personal incomes, April 2020

PURCHASING CHANNEL
Offline retailers enjoying good foot traffic
Figure 47: Purchasing channel, April 2020
Convenience element attracting 18-24 year old
Figure 48: Purchasing channel, by gender and age, April 2020
High income earners embracing omnichannel retailing
Figure 49: Purchasing channel, by monthly personal income, April 2020
Parents with kids utilising multiple channels to find sparkling drinks to satisfy family members
Figure 50: Purchasing channel, by family structure, April 2020

INTEREST IN INNOVATION
Sports and energy drinks could be revitalised with carbonation
Figure 51: Interest in innovation, April 2020
Figure 52: Percentage of newly launched RTD energy drinks and sports drinks with carbonated (fizzy/ sparkling/ bubbly) texture, by region, Jul 2015 – Jun 2020
Females curious about sweet sparkling beverages
Figure 53: Interest in innovation, by gender and age, April 2020

ATTITUDES TOWARDS SPARKLING DRINKS
Long lasting, mild carbonation preferred by most consumers
Figure 54: Attitudes towards sparkling drinks, April 2020
Premium-looking glass bottles attracting more females aged 30-39
Figure 55: Attitudes towards sparkling drinks, April 2020
Taste matters the most
Figure 56: Attitudes towards sparkling drinks, April 2020
Confused about functionality of sparkling water
Figure 57: Attitudes towards sparkling drinks, April 2020
Figure 58: Attitudes towards sparkling drinks, by gender and age, April 2020

MEET THE MINTROPOLITANS
More MinTs embracing palatable flavours as well as bubbles
Figure 59: Consumption Usage, by consumer classification, April 2020
MinTs understand diet CSDs
Figure 60: Attitudes towards sparkling drinks, by consumer classification, April 2020

APPENDIX – MARKET SIZE AND FORECAST
Figure 61: Total volume sales and forecast of CSD, China 2015-25
Figure 62: Retail value sales and forecast of CSD, China 2015-25

APPENDIX – METHODOLOGY AND ABBREVIATIONS
Methodology
Abbreviations

 

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