What does the future hold for soft drinks in China? - data

This year’s Winter Olympics, hosted by Beijing in February, gave Just Drinks grounds to consider the opportunity for soft drinks brand owners in China.

Back in 2019, The Coca-Cola Co partnered with Chinese dairy group Mengniu to become the joint beverages and dairy sponsors for the Olympics from 2021 until 2032. While the financial details weren't disclosed, reports at the time put a value of US$3bn on the arrangement.

After the US and Mexico, China is Coca-Cola's third-largest market. It’s little surprise, then, that the group dominates the country's soft drinks category in terms of value: In 2020, Coca-Cola accounted for 24.4% of the market.

Tingyi Holding Corp, which bottles for PepsiCo in China and owns the Master Kong food and beverage brand, also held a notable proportion of the market, at 15.5%.

Overall, GlobalData predicts that between 2021 and 2025, the value of the soft drinks category in China is set to increase by a third. However, there is significant variation in this figure on a segmented level. According to GlobalData, the value of ‘enhanced water’ will increase the most over the five-year period, by just under 62%.

Iced & RTD coffee is also set to be popular in the country, with a forecast increase in value of 59.5%.

This bright future comes as innovation has gone into overdrive. The number of new launches in soft drinks has skyrocketed in China, with new stock keeping units (SKUs) increasing by 234.1% in five years.

One such product is the ‘Dragon Fruit Pear Mixed’ Juice launched by Deqing Jiajun Beverage Co. Launched in 2021, the beverage has been described as an “unusual formulation for the juice category”. Another product with an unusual flavour pairing from last year is the soy & white peach-flavoured Naichafengweiyinliao (milk tea flavoured beverage) by Ningbo Bokang Food Technology Co.

Despite the strong growth predictions for China, other large global economies are set to see even more substantial growth in soft drinks, with India and Germany set to see a 54.3% and 38.6% increase, respectively.

[GlobalData defines enhanced water to be “sweetened and non-sweetened waters, carbonated and non-carbonated, enhanced with vitamin/minerals and/or other functional ingredients".]

Figures have been sourced from GlobalData’s Product Launch Analytics' database, which tracks innovative product releases around the world.