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Soft Drinks in China

China soft drinks market: Stable growth expected between 2012-17

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2014-02-26 04:32:03 - Soft Drinks in China - a new market research report on

Volume and value growth in the China soft drinks market was weaker in 2012 compared to 2011 through both on-trade and off-trade channels, but the market continued to show a healthy performance. Over the review period, the whole soft drinks sector seemed close to mature, whilst there were few events which could stimulate the performance of the whole market. Health-orientated soft drinks such as RTD tea, fruit/vegetable juice and bottled water continued their dynamic development in 2012, whereas soft drinks with a less healthy image, such as carbonates, witnessed stagnant growth in China.

Lots of existing soft drinks faced the situation that their products were not that attractive after a long-term development in the market, because their brand images were out



of fashion and their tastes were not that attractive. During the review period, leading companies paid more attention to new product developments. Crystal sugar pear juice was the most popular beverage in 2012. Uni-President Enterprises Corp firstly introduced this beverage in the Chinese market, which received a warm welcome and attracted many followers. Suntory Holdings Ltd, which is one of the leading innovators in China, launched the Yue Yang series of juice drinks, which includes Honeysuckle Pear Juice and Longan Red Jujube Juice. Those beverages with traditional Chinese tastes were labelled as natural and with benefits for health function; thus, increasingly health-conscious consumers preferred them rather than carbonates.

During the review period, the competition was very fierce between both domestic and international brands, but internal competition of the domestic brands was fierce as well. In 2012, the herbal tea war between Jiaduobao and Wong Lo Kat intensified. Guangzhou Wanglaoji Pharmaceutical Co Ltd used the brand name Wong Lo Kat, whilst Guangdong Jiaduobao Beverage & Food Co Ltd used Jiaduobao as its brand name, after a long-term law case about the trademark.

Supermarkets and hypermarkets are on a major expansion drive, which has led to an increase in soft drinks volume sales. Although supermarkets and hypermarkets have higher entrance expenses than other off-trade channels, most soft drinks players are willing to put their products on sale there due to their wide consumer base. Besides, in most developed cities in China, supermarkets and hypermarkets have seen robust growth. However, independent small grocers continue to play a significant role as distributors for basic food and drinks, especially in places like rural areas that have no major department stores, supermarkets or hypermarkets.

The soft drinks industry is anticipated to see stable growth over the forecast period. Most categories of soft drinks are expected to become mature if no significant new products or policies can stimulate the market performance. Besides, consumers will switch amongst different soft drinks, for example from carbonates to the healthy alternative of RTD tea.

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