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On-trade Soft Drinks - China - April 2017

“Multiple healthy ingredients are the essential purchase driver of on-trade soft drinks. Fruit- and milk-based blended smoothie can harness an opportunity as they are the most preferred ingredients. At the same time, restaurants and beverage manufacturers may also want to utilise natural ingredients to create strong sensorial appeal to attract consumers.”
– Summer Chen, Research Analyst

This Report discusses the following key topics:

  • What makes an ideal beverage menu?
  • Fruit- and milk-based smoothies can exploit a gap in the market
  • Eye-catching drinks made from healthy ingredients

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Table of contents

  1. Overview

    • What you need to know
      • Covered in this report
        • Included
          • Excluded
            • Definitions
              • Figure 1: Definition of low/mid/high MHI groups, by city tier
          • Executive Summary

              • The market
                • A market enjoying stable growth
                  • Figure 2: Best- and worst-case forecast for sales value of on-trade soft drinks, China, 2011-21
                • Packaged soft drinks dominate in on-trade channel
                  • Figure 3: Value shares of on-trade soft drinks, by market segment, China, 2016
                  • Figure 4: Value sales of packaged on-trade soft drinks, by market segment, China, 2016
                • Key players
                  • Brands highlight food pairing, launch low-sugar versions, and strengthen sensorial appeal to attract consumers
                    • The consumer
                      • More soft drinks and less alcoholic drinks
                        • Figure 5: Consumption trends of on-trade soft drinks, January 2017
                      • Packaged soft drinks dominate in on-trade channels
                        • Figure 6: Penetration of on-trade soft drinks, January 2017
                      • Exploring new flavours and not just health benefits
                        • Figure 7: Attitudes towards on-trade soft drinks, health benefits, January 2017
                        • Figure 8: Attitudes towards on-trade soft drinks, new flavours, January 2017
                      • Healthy ingredients are the most important purchase driver
                        • Figure 9: Purchase drivers for on-trade soft drinks, January 2017
                      • Fresh fruits, and vitamins and minerals are the most popular ingredients
                        • Figure 10: Preferred ingredients, January 2017
                      • Tea drinks have most distinctive image
                        • Figure 11: Correspondence analysis – Perceptions of different beverages, Jan 2017
                      • What we think
                      • Issues and Insights

                        • What makes an ideal beverage menu?
                          • The facts
                            • The implications
                              • Fruit- and milk-based smoothies can exploit a gap in the market
                                • The facts
                                  • The implications
                                    • Eye-catching drinks made from healthy ingredients
                                      • The facts
                                        • The implications
                                          • Figure 12: Recipe of rainbow drinks, Starbucks, summer 2016
                                          • Figure 13: Grapefruit Soju, Bei Le restaurant, Shanghai, 2017
                                      • The Market – What You Need to Know

                                        • A market enjoying stable growth
                                          • Increasing spending on eating out and shifting from alcoholic drinks can drive future growth
                                            • Rise of beverage outlets and meal delivery can pose a challenge
                                              • Packaged drinks dominate on-trade channels
                                              • Market Size and Forecast

                                                • A market enjoying stable growth
                                                  • Figure 14: Sales value of on-trade soft drinks, China, 2011-16
                                                • Stable growth expected to continue
                                                  • Figure 15: Best- and worst-case forecast for sales value of on-trade soft drinks, China, 2011-21
                                              • Market Drivers

                                                • Increasing spending on eating out
                                                  • Shifting from on-trade alcoholic drinks
                                                    • Figure 16: Consumption trends of on-trade alcoholic drinks, January 2017
                                                    • Figure 17: Consumption trends, drinking less alcoholic drinks in on-trade channels, January 2017
                                                • Market Challenges

                                                  • Competition from specialised beverage venues
                                                    • Rise of O2O food delivery service
                                                    • Market Segmentation

                                                      • Packaged soft drinks dominate in on-trade channel
                                                        • Figure 18: Value shares of on-trade soft drinks, by market segment, China, 2016
                                                        • Figure 19: Sales value of on-trade soft drinks, by market segment, China, 2011-16
                                                      • Within packaged soft drinks, juice is the leading category, followed by herbal tea and CSDs
                                                        • Juice category goes premium
                                                          • Figure 20: Value sales of packaged on-trade soft drinks, by market segment, China, 2016
                                                        • Herbal tea slows down in growth
                                                          • Carbonated Soft Drinks (CSDs) lose popularity
                                                            • Yogurt and Plant Protein Drinks (PPDs) have great potential
                                                            • Key Players – What You Need to Know

                                                              • Brands highlight food pairing, launch low-sugar versions, and strengthen sensorial appeal to attract consumers
                                                                • Innovation highlights
                                                                • Competitive Strategies

                                                                  • Highlighting the concept of food pairing
                                                                    • Figure 21: Eat with Meals, Master Kong, October 2016
                                                                    • Figure 22: Ginger Coke, Coca-Cola China, March 2017
                                                                    • Figure 23: Carbonated natural mineral water, Badoit
                                                                  • Going healthy with low-sugar versions
                                                                    • Figure 24: Low sugar and sugar-free versions of herbal tea, Wang Lao Ji, June 2016
                                                                    • Figure 25: Qiqo Hao You, 2016
                                                                  • Strengthening sensorial appeals
                                                                    • Figure 26: Examples of drinks in appealing colour and stylish packaging, 2016
                                                                • Who’s Innovating?

                                                                  • Jia Duo Bao: Angry Birds limited edition
                                                                    • Figure 27: Angry Birds limited edition, Jia Duo Bao, May 2016
                                                                  • Mizone: Product lines exclusive to on-trade channels
                                                                    • Figure 28: Xi Qi and Chi Huo Zhuang, Mizone, May 2016
                                                                  • Coca-Cola Plus: Healthiest Coke yet
                                                                    • Figure 29: Health benefits of Coca-Cola Plus, Coca-Cola Japan, February 2016
                                                                  • Specialised beverage venues in Taiwan: Appealing colour and fun packaging
                                                                    • Figure 30: Examples of drinks with appealing colour, Taiwan, 2016
                                                                    • Figure 31: Examples of fun packaging, Taiwan, 2016
                                                                • The Consumer – What You Need to Know

                                                                  • Consumers are more exploratory with flavours at on-trade than retail channels
                                                                    • Healthy ingredients are the most important purchase driver
                                                                      • Fruits, and vitamins and minerals are the most popular ingredients
                                                                        • Pairing with spicy dishes is worth targeting
                                                                        • Consumption Trends of On-trade Soft Drinks

                                                                          • People are drinking more soft drinks and less alcoholic drinks
                                                                            • Figure 32: Consumption trends of on-trade soft drinks, January 2017
                                                                          • Some consumers are shifting from freshly-made soft drinks to packaged ones, but less the other way around
                                                                            • Figure 33: Consumption trends, drinking less freshly-made and packaged on-trade soft drinks, January 2017
                                                                          • Female consumers aged 25-29 are fans of freshly-made soft drinks
                                                                            • Figure 34: Consumption trends, drinking more freshly-made on-trade soft drinks (percentage difference as compared to total), by age and gender, January 2017
                                                                        • Penetration of On-trade Soft Drinks

                                                                          • Packaged soft drinks dominate on-trade channels
                                                                            • Figure 35: Penetration of on-trade soft drinks, January 2017
                                                                          • Packaged probiotic drinks are most liked
                                                                            • Figure 36: On-trade penetration of probiotic drinks (percentage difference as compared to total), by age and gender, January 2017
                                                                          • Packaged and freshly-made juices each have their own stage
                                                                            • Figure 37: On-trade penetration, freshly-made juice/smoothie and packaged juice, by age, January 2017
                                                                            • Figure 38: Minute Maid Essentialdelight, Coca-Cola China, October 2016
                                                                          • Other categories follow closely
                                                                            • Popularity of freshly-made drinks varies across regions
                                                                              • Figure 39: On-trade penetration, freshly-made soft drinks, by region, January 2017
                                                                          • Attitudes towards On-trade Soft Drinks

                                                                            • Nearly half of consumers are willing to pay premium for on-trade soft drinks
                                                                              • Figure 40: Attitudes towards on-trade soft drinks, paying premium, January 2017
                                                                              • Figure 41: Selected purchase drivers for on-trade soft drinks and preferred ingredients, January 2017
                                                                            • Health benefits are a more important concern than flavours
                                                                              • Figure 42: Attitudes towards on-trade soft drinks, health benefits, January 2017
                                                                            • When dining out, consumers are more exploratory with new flavours
                                                                              • Figure 43: Attitudes towards on-trade soft drinks, new flavours, January 2017
                                                                            • Drinks with a mild taste and a thin texture are preferred
                                                                              • Figure 44: Attitudes towards on-trade soft drinks, taste and texture, January 2017
                                                                          • Purchase Drivers for On-trade Soft Drinks

                                                                            • Ingredients are what consumers care about most
                                                                              • Figure 45: Purchase drivers for on-trade soft drinks, January 2017
                                                                              • Figure 46: Separate seasonal menu, Cai Ni, Shanghai, March 2017
                                                                            • Consumers from tier one cities are adventurous about rare ingredients
                                                                              • Figure 47: Purchase drivers for on-trade soft drinks, is made with rare ingredients, by city tier, January 2017
                                                                            • Signature beverages can also help to boost sales
                                                                              • Young consumers are easily attracted by appearance
                                                                                • Figure 48: Purchase drivers for on-trade soft drinks, by age, January 2017
                                                                            • Preferred Ingredients of On-trade Soft Drinks

                                                                              • Fresh fruits and vitamins and minerals are the most popular ingredients
                                                                                • Figure 49: Preferred ingredients of on-trade soft drinks, January 2017
                                                                              • Room for fresh vegetables and superfoods
                                                                                • Figure 50: Preferred ingredients of on-trade soft drinks, fresh vegetables and superfoods, by age and gender and household income, January 2017
                                                                              • More education needed on sparkling drinks
                                                                                • Figure 51: Cross-category innovations of carbonated drinks
                                                                            • Perceptions of Different Soft Drinks

                                                                              • Tea drinks have most distinctive image
                                                                                • Figure 52: Correspondence Analysis – Perceptions of different soft drinks, Jan 2017
                                                                              • Pairing with spicy dishes is worth targeting
                                                                                • Figure 53: Perceptions of different soft drinks, going well with spicy dishes, January 2017
                                                                              • Fast food restaurants can introduce a wider variety of drinks
                                                                                • Figure 54: Perceptions of different soft drinks, good for fast food restaurants, January 2017
                                                                            • Meet the Mintropolitans

                                                                              • Greater acceptance of paying premium for soft drinks when dining out
                                                                                • Figure 55: Attitudes towards on-trade soft drinks, paying premium, by consumer classification, January 2017
                                                                              • Mintropolitans value health benefits more and explore new flavours
                                                                                • Figure 56: Attitudes towards on-trade soft drinks, health benefits and new flavours, by consumer classification, January 2017
                                                                              • Marketing schemes and eye-catching styles play a larger role
                                                                                • Figure 57: Selected purchase drivers for on-trade soft drinks, by consumer classification, January 2017
                                                                            • Appendix – Market Size and Forecast

                                                                                • Figure 58: Sales value of on-trade soft drinks, China, 2011-21
                                                                            • Appendix – Market Segmentation

                                                                                • Figure 59: Best- and worst-case forecast for sales value of packaged on-trade soft drinks, China, 2011-21
                                                                                • Figure 60: Best- and worst-case forecast for sales value of freshly-made on-trade soft drinks, China, 2011-21
                                                                                • Figure 61: Sales value of on-trade soft drinks, by segment, China, 2011-21
                                                                            • Appendix – Methodology and Abbreviations

                                                                              • Methodology
                                                                                • Figure 62: Map of surveyed cities
                                                                              • Fan chart forecast
                                                                                • Abbreviations

                                                                                Companies Covered

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

                                                                                On-trade Soft Drinks - China - April 2017

                                                                                US $3,990.00 (Excl.Tax)