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Carbonated Soft Drinks - China - March 2012

"China’s carbonated soft drink market is growing at a low-teen rate which is significantly faster than other global markets (US/UK). However, on a per capita basis, the consumption of carbonated soft drinks in China is still low at an estimated 10.34 litres per person in 2011 compared to an estimated 167.5 litres per person in the US in 2010, indicating the potential for growth in the marketplace. The dominance of Coca-Cola Company and PepsiCo of the carbonated soft drinks market in China has meant that smaller companies are struggling to establish themselves in the market."


- Tan Heng Hong, Research Manager

 

In this report we answer the following questions:

  • How can smaller players compete in a market dominated by Coca-Cola Co and PepsiCo?
  • Are there opportunities for natural carbonated soft drinks in China?
  • How mini packs can be successfully used to increase sales?
  • What other opportunities in the on-trade channel can be tapped to increase the potential for carbonated soft drinks in this channel?

 

Report Introduction:

China’s carbonated soft drink market is seeing low double digit growth, which is significantly faster than other global markets (US/UK). However, on a per capita basis, the consumption of carbonated soft drinks in China is still low at an estimated 10.34 litres per person in 2011 compared to an estimated 167.5 litres per person in the US in 2010, indicating the potential for growth in the marketplace. The dominance by The Coca-Cola Company and PepsiCo of the carbonated soft drinks market in China has meant that smaller companies are struggling to establish themselves in the market.

With obesity on the rise in China, consumers are increasingly trying to adopt a healthier lifestyle such as minimising the intake of artificial ingredients and exercising more. Companies have tapped the health trend with diet carbonated soft drinks, but increasingly, the trend has shifted towards natural products globally and this has opened new opportunities for companies to meet the demand for all-natural products.

Besides flavour innovation and natural carbonated soft drinks, the potential of single-serve package has not been fully exploited. Due to their small size, mini packs, if marketed creatively, can be a useful tool to drive sales.

The on-trade is another area that has not seen its potential fully utilised. The current challenge is to make carbonated soft drinks relevant to the eating out practices of Chinese consumers.

 

Liqueurs - UK - January 2012

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Table of contents

  1. Introduction

      • Definition
        • Report structure
        • Executive Summary

          • The market
            • The forecast
              • Figure 1: Forecast – Volume sales of carbonated soft drinks, 2006-16
              • Figure 2: Forecast – Value sales of carbonated soft drinks, 2006-16
            • Segmentation
              • Companies
                • Figure 3: Manufacturer retail volume share of the China CSD market, 2006-11
              • Issues
                • The demand for new flavours can challenge cola’s hegemony
                  • Figure 4: Repertoire of flavours bought, December 2011
                • Single serve has huge growth potential
                  • Figure 5: Time of day CSDs are typically drunk, by demographics, December 2011
                • CSDs can do more to tap into consumers’ growing health awareness
                  • Untapped opportunities to drive frequency of drinking in the on-trade
                    • Figure 7: Location CSDs are drunk, December 2011
                • Market Background

                  • Coca-Cola Company and PepsiCo dominate the market
                    • Figure 8: Manufacturer retail volume share, 2006-11
                    • Figure 9: Brand preference, by brand and tier city, December 2011
                  • CSD market growth outstrips most other key global markets
                    • Figure 10: China’s total carbonated soft drinks sales (on-trade and off-trade), by volume, 2006-11
                    • Figure 11: Carbonated soft drinks volume sales and CAGR % growth rate (in brackets), 2010
                  • Low per capita consumption presents opportunities
                    • Figure 12: Per capita consumption of carbonated soft drinks, by country, 2010
                  • Rising prices of raw materials is driving up costs
                    • Figure 13: China’s total carbonated soft drinks sales (on-trade & off-trade), by value, 2006-11*
                    • Figure 14: Swire Beverages (Revenue composition – own production in China), 2006 and 2010
                  • Competitive environment is challenging
                    • Figure 15: Usage of soft drinks, December 2011
                  • Consumer segmentation
                      • Figure 16: Carbonated beverages clusters, by age groups, December 2011
                  • Appeal of New Flavours Creates Opportunities for Smaller Companies

                    • Issues at a glance
                      • Consumers are keen to try new products
                        • Figure 17: Repertoire of flavours bought, December 2011
                      • Cola dominates the carbonated soft drinks category
                        • Figure 18: Carbonated soft drinks retail sales volume, by flavour, 2006-11
                      • Lemon/lemon-lime fastest growing flavour
                        • Innovation sees growth in flavour variety
                          • Figure 19: Percentage of new product launches, by date published and flavours (including blend), 2006-11
                        • Guarana flavour profits from energy drink association
                          • Figure 20: Guarana flavoured CSDs bought, by gender and age, December 2011
                          • Figure 21: Top 5 categories where "Guarana Extract" is used in new product launches worldwide, 2011
                        • Traditional Chinese flavours can keep mature consumers engaged
                          • Figure 22: Hawthorn, Plum and Jujube flavoured CSDs bought, by gender and age, December 2011
                          • Figure 23: Attitudes towards carbonated soft drinks, by age, December 2011
                          • Figure 24: Hawthorn, Plum and Jujube flavoured of CSDs bought, by region, December 2011
                        • Sarsi and Salted soda can expand in regional markets
                            • Figure 25: Sarsi flavoured CSDs bought, by region, December 2011
                            • Figure 26: Salt/salted flavoured CSDs bought, by region, December 2011
                            • Figure 27: Salted flavoured CSDs bought, by gender and age, December 2011
                            • Figure 28: Agreement with statement “I try to stick to a healthy diet”, by age and gender, December 2011
                          • What does it mean?
                          • Potential for Mini Packs to Meet Changing Consumer Needs

                            • Issues at a glance
                              • Single-serve can accelerate growth of ‘on-the-go’ market
                                • Figure 29: New carbonated soft drinks launches, by packaging size, 2006-11
                                • Figure 30: percentage of Sinopec & PetroChina petrol stations with non-fuel business, 2007-10
                              • Single-serve can meet workplace snacking needs
                                  • Figure 31: Time of day CSDs are typically drunk, by demographics, December 2011
                                  • Figure 32: Time of day snacks are typically eaten, December 2011
                                  • Figure 33: Price comparison of Coca-Cola versus cross category competitors, January 2012
                                • Lunch meals provide opportunity for new positioning
                                    • Figure 34: Location CSDs were bought at in the last 3 months, December 2011
                                  • Health can benefit smaller pack sizes
                                    • Repositioning can appeal to health-concerned parents
                                        • Figure 35: CSDs bought for children, by gender, December 2011
                                      • What does it mean?
                                      • Concern Over Artificial Ingredients/Sweeteners Raises Prospect for Natural Alternatives

                                        • Issues at a glance
                                          • Obesity and overweight consumers are a growing issue
                                            • Figure 36: Attitudes toward food and drink, December 2011
                                            • Figure 37: Attitudes toward CSDs, December 2011
                                            • Figure 38: New carbonated soft drinks with no additives/preservatives claims, 2006-11
                                          • Potential for stevia to address the lack of new launches in natural category
                                            • Figure 39: Stevia launches in CSD category, 2006-11
                                            • Figure 40: Top 5 countries where "Stevia" is used in new product launches across all categories, by quarter, 2011
                                            • Figure 41: Top 5 categories where "Stevia" is used in new product launches worldwide, 2011
                                            • Figure 42: Use of stevia in soft drinks in China. 2006-11
                                          • Diet segment can be revived by zero-calorie, natural sweeteners
                                            • Figure 43: Attitude towards carbonated soft drinks, December 2011
                                            • Figure 44: Brands of carbonated soft drinks bought in the last 3 months, December 2011
                                            • Figure 45: New carbonated soft drinks with claims of low/no/reduced calorie/sugar, 2006-11
                                          • Natural cane sugar and agave offer viable alternatives to high-fructose corn syrup
                                            • Figure 46: New agave-sweetened CSD global launches with claims as a % of total new global CSD launches with claims, 2007-11
                                          • What does it mean?
                                          • Dominance of International Brands Stifles Market

                                            • Issues at a glance
                                              • Pepsi tie up changes market dynamics
                                                • Figure 47: Manufacturer retail volume share of the China CSD market, 2006-11
                                              • Smaller brands struggling to make an impact in retail
                                                  • Figure 48: Local CSD brands bought, December 2011
                                                • Consumer segmentation highlights local differentiation
                                                  • Figure 49: Attitudes towards CSDs, by cluster groups, December 2011
                                                • Brazil provides guide for ‘co-operative’ model
                                                  • Local brands compete on heritage and provenance
                                                      • Figure 50: Attitudes towards carbonated soft drinks, by demographics, December 2011
                                                      • Figure 51: Attitudes towards carbonated soft drinks, by cluster groups, December 2011
                                                    • Coca-Cola Co, PepsiCo dominate new launches
                                                      • Figure 52: Carbonated soft drinks new launches, by launch type, 2006-11
                                                      • Figure 53: Cumulative new launches, by companies, 2006-11
                                                      • Figure 54: New launches, by company, 2006-11
                                                      • Figure 55: Brand preference, by age group, December 2011
                                                    • Local competitors focus on health and flavour variation
                                                        • Figure 56: Attitudes towards carbonated soft drinks, by cluster groups, December 2011
                                                        • Figure 57: Attitude on trust towards Chinese carbonated soft drink brand, by cluster groups, December 2011
                                                      • What does it mean?
                                                      • Food Pairing and Beverage Mixing Offer Opportunities in On-Trade

                                                        • Issues at a glance
                                                          • On-trade failing to capitalise on rise of eating out
                                                            • Figure 58: Location CSDs are drunk, December 2011
                                                            • Figure 59: Carbonated soft drinks retail and HoReCa volume and value split, 2006-11
                                                          • Improved pairings can attract consumers
                                                            • Figure 60: Time of day CSDs are typically drunk, by demographics, December 2011
                                                          • Carbonated Soft Drinks are ideal mixers
                                                            • Figure 61: Usage of carbonated soft drinks, by demographics, December 2011
                                                          • What does it mean?
                                                          • Future

                                                              • Figure 62: Fan chart forecast for carbonated soft drinks, at best-, worst-, and central-case scenario, 2006-16
                                                              • Figure 63: China’s carbonated soft drinks actual and forecast volume and value, 2006-16
                                                            • Methodology
                                                            • Appendix

                                                              • Market size, segment and share data
                                                                • Figure 64: Carbonated soft drinks brands and their ultimate owners
                                                                • Figure 65: Total carbonated soft drinks sales (on-trade & off-trade), by volume, 2006-11
                                                                • Figure 59: Total carbonated soft drinks sales (on-trade & off-trade), by value, 2006-11
                                                                • Figure 66: Carbonated soft drinks retail and horeca volume and value split, 2006-11
                                                                • Figure 61: Total volume of carbonated soft drinks market (on-trade/off-trade), by flavour, 2006-2011
                                                                • Figure 62: Total value of carbonated soft drinks market (on-trade/off-trade), by flavour, 2006-2011
                                                                • Figure 67: Carbonated soft drinks retail sales volume, by flavour, 2006-11
                                                                • Figure 68: Carbonated soft drinks retail sales value, by flavour, 2006-11
                                                                • Figure 65: Manufacturer retail volume share, 2006-11
                                                                • Figure 66: Manufacturer retail value share, 2006-11
                                                              • Market size and forecast
                                                                • Figure 69: Additional best case/worst case, 2009-16
                                                                • Figure 70: Fan Chart – volume of carbonated soft drinks, 2006-16
                                                                • Figure 71: Volume of carbonated soft drinks, 2006-16
                                                                • Figure 72: Additional best case/worst case, 2009-16

                                                            Companies Covered

                                                            To learn more about the companies covered in this report please contact us.

                                                            Carbonated Soft Drinks - China - March 2012

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