Affordability, Value and Soft Drinks Insights

Consumer-led reassessment of affordability and value restricts short-term recovery and reshapes long-term opportunities for non-alcoholic drinks.
Emerging consumer markets are increasingly crucial for volume growth.
Health, functionality, and lifestyle have become primary drivers of value in the soft drinks category.

Rising Value-Driven Retail Channels: Retail channels like club stores, grocery discounters, and vending are on the rise. Local food service increasing due to demand for tailored products.
Rising Price Effects: Ageing populations and smaller household sizes in developed markets complicate perceptions of affordability.
Growth Outlook (2024-2029): Focus on affordable branded options, especially in fragmented retail environments; local compliance and partnerships are crucial for success.

Emerging Market Influence: Markets like Africa, the Middle East, and Asia Pacific (APAC) will be key for future volume growth, with over 80% of absolute growth projected there.
Health and Wellness Trend: Consumers increasingly prioritize health, pushing demand for functional drinks, lo/no sugar products, and nutrient-rich options.
Consumer Spending: Rising prices globally have shifted spending towards budget-friendly brands; the demand for more affordable formats is apparent.

Inflation's Impact: Significant price inflation, particularly in Western Europe and North America, has led to decreased consumption of non-alcoholic beverages.
Changing Consumer Preferences: Affordability pressures are leading consumers to prioritize essential spending over indulgent purchases.
Growth of Local Brands: Affordable, regionally-tailored brands are gaining traction, as consumers seek value in local products.

Strategic Innovation Required: Marketers must adapt strategies for regional nuances in pricing, packaging, and distribution to meet the preferences of the local consumer base.
Emerging Consumer Class: Rising incomes in MEA and APAC present vast untapped potential, where new innovations in beverages must align with local culture and expectations.
Retail Evolution: The ongoing fragmentation in retail necessitates strategies that embrace local distribution and innovative product offerings better suited to emerging consumer segments.

Functional Beverage Expansion: Drinks that focus on hydration, energy, mental health, and gut health are essential as consumers gravitate toward premium functional drinks.
GLP-1 Medication Influence: Growing popularity of GLP-1 medications for health management may impact beverage consumption, necessitating the development of suitable options catering to this market.

Cultural Influence on Brands: The success of lifestyle-oriented beverage brands like Prime shows the importance of community engagement and lifestyle branding in appealing to consumers.
New Non-Alcoholic Categories: There is an emerging luxury tier in non-alcohol drinks, where identity and aesthetics play a crucial role in attracting consumers.

Balancing Affordability and Quality: The industry must balance price-sensitive strategies with high-quality offerings to ensure sustained growth amidst economic pressures.
Channel and Consumer Strategy: Long-term success relies on adapting to post-pandemic consumer behaviors, focusing on value and affordability in pricing to meet the evolving demands of both low- and middle-income consumers across various geographies.

Local and Tailored Strategies: Invest in localized strategies to foster consumer loyalty, addressing unique demographic shifts and price affordability.
Embrace Innovation in Health Products: Focus on innovative health products that meet the needs of emerging consumers while ensuring affordability aligns with regional purchasing power.