2024
8
China Sparkling Drinks Market Report 2024
2024-12-02T16:01:58+00:00
REP98B0D0C2_695C_4858_8CAC_375EDAE983A2
3695
177791
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Report
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This report looks at the following areas:Future market outlook and growth prospects of China’s CSD marketCompetitive landscape of CSD marketNotable product innovation trends and growth opportunitiesConsumption trends and changes in…
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  6. China Sparkling Drinks Market Report 2024

China Sparkling Drinks Market Report 2024

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This report looks at the following areas:

  • Future market outlook and growth prospects of China’s CSD market
  • Competitive landscape of CSD market
  • Notable product innovation trends and growth opportunities
  • Consumption trends and changes in drinking occasions for CSDs and sparkling water
  • Purchase factors and barriers to consumption for sparkling drinks
  • Connections between sparkling drinks and interest areas
  • Consumer attitudes and preferences relating to sparkling drinks

Intentional spending and health-conscious attitudes pose a challenge to the sparkling drinks market. Brands must pay attention to evolving consumer demands, from a desire to reduce sugar intake to cutting back on sweetened products. They can enhance the competitiveness of sparkling drinks in food pairing scenarios through targeted communication and innovation, and satisfy the functional needs generated in dining occasions.

Rika Huang, Senior Analyst, China Insights

Market Definitions

This Report covers sparkling drinks, including CSDs and other sparkling drinks (eg sparkling water, sparkling juice, etc).

The market size of the Report covers CSDs only. All mainstream CSDs (ie traditional fizzy drinks, sodas, or pop) are included in the market size, including diet CSDs. Soda water, sparkling water, and tonic water (on-pack terms describe the products as water) are excluded from this market size because of their status as (flavoured) water rather than a traditional soft drink in China.

Sales data covers products sold through the following outlets:

  • Retail: This includes retail outlets where CSDs are purchased for the purpose of consumption off-premise, comprising supermarkets, convenience stores and other online retailers.
  • Non-retail: This includes anywhere CSDs are bought to consume on-site, eg leisure centres, hotels, restaurants, quick service restaurants, coffee shops and in the on-trade channel (ie pubs, bars, clubs).
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  1. Executive summary

    • Key issues covered in this Report
    • Definition
    • What you need to know
    • The market
    • On the backdrop of intentional spending and the pursuit of healthy lifestyles, CSD retail sales are expected to see a slight decline
    • The continued growth of foodservice channels is expected to boost overall CSD consumption
    • Market factors
    • Companies and brands
    • The two leading players maintain a strong position in the CSD market, while domestic brands face challenges
    • Key trends in marketing activities
    • Key new product trends
    • Graph 1: carbonated* non-alcoholic drink launches, by sub-category, 2019-24
    • Graph 2: non-alcoholic drink* launches, by share of carbonated texture, 2019-24
    • Examples of products that reflect these trends
    • The consumer
    • Non-diet CSDs have a higher penetration rate, but willingness to spend is declining, while diet/light versions remain niche
    • Graph 3: consumption trends, 2024
    • Addressing concerns about sugar and artificial sweeteners is a top priority for flavoured sparkling drinks
    • Graph 4: ranking of reasons for reducing consumption, 2024
    • Graph 5: reasons for reduced consumption, 2024
    • Leisure time and snack pairings remain the most important consumption occasions, but there is room for development
    • Graph 6: consumption occasions, 2024
    • Hotpot & malatang remain the top foods to pair with, while snack pairings offer opportunities
    • Graph 7: food pairings, 2024
    • Novel experiences offered by familiar brands are more appealing to consumers
    • Graph 8: purchase factors, 2024
    • In addition to minus claims, basic nutrient enhancement and functional upgrades can further enhance the competitiveness of sparkling drinks
    • Graph 9: ingredients of interest, 2024
    • Sparkling drinks are important for consumers with busy lives because of their relaxing nature, but there is need to further focus on the demand for reducing sweetness
    • Graph 10: consumer behaviour, 2024
    • Issues and insights
    • What we think
  2. The market

    • Market size and forecast
    • Amid the trends for intentional spending and rising health consciousness, CSD retail sales have seen a slight decline
    • Non-retail sectors continue to drive overall consumption growth for carbonated soft drinks
    • Growth is slowing in sparkling water
    • Market factors
    • The summer heatwave spurs consumption of non-alcoholic drinks, but trading up remains sluggish
    • Graph 11: trading up and down – non-alcoholic drinks, 2021-24
    • Graph 12: changes in spending – non-alcoholic drinks, 2023-24
    • CSDs and sparkling water are less essential in beverage consumption…
    • Graph 13: consumption frequency, 2023
    • Graph 14: drink spending priorities, 2024
    • … while there is limited willingness to trade up in sparkling drinks
    • Graph 15: trading up and down, 2024
    • Eating out is steadily growing, but at-home dining should not be overlooked
    • Graph 16: proportion of consumers who have spent more than last month – eating at home vs dining out, 2022-24
    • Natural sugar substitutes come out on top in terms of naturalness and flavour, but consumers still take their names at face value
    • Graph 17: perception of sweeteners – good taste, 2023 vs 2024
    • Graph 18: perception of sweeteners – natural, 2023-24
  3. Companies and brands

    • Market share
    • Two megabrands hold solid positions in the CSD market
    • Focus on holiday occasions…
    • … and leverage co-branding to extend presence in sugar-free CSDs
    • Han Kou Er Chang is in free fall; Arctic Ocean and Da Yao seek new growth
    • Marketing activities
    • Tap into AI to reach and attract consumers
    • Continue to invest in and explore food pairing scenarios
    • Expand into fashionable lifestyles
    • New product trends
    • Sparkling drink innovation continues to slow
    • Innovation declines in CSDs, but is active in healthier sparkling drinks
    • Graph 19: carbonated* non-alcoholic drink launches, by sub-category, 2019-24
    • Fermented sparkling drinks expand beyond kombucha
    • In the era of sugar-free tea, innovation is active in sparkling tea
    • Innovation around reducing sugar, fat and calories remains active
    • Graph 20: carbonated soft drink and sparkling water launches, by top 10 claims, 2019-24
    • Artificial sweeteners are used more than natural sweeteners, but usage is in decline
    • Graph 21: carbonated soft drink and sparkling water launches, by natural sweeteners, 2019-24
    • Graph 22: carbonated soft drink and sparkling water launches, by main artificial sweeteners, 2019-24
    • Leverage sour fruit flavours to strengthen perceptions of a vitamin C boost
    • Strong carbonation provides a more stimulating drinking experience
    • Predominant flavours show high growth momentum, leading to increased flavour homogenisation
    • Use alcoholic drinks as flavour inspiration
  4. The consumer

    • Consumption trends
    • Non-diet CSDs lead in penetration, while diet/light versions remain niche
    • Graph 23: changes in penetration of sparkling drinks, 2023-24
    • Graph 24: consumption trends, 2024
    • Consumption preferences are equally matched for sparkling and non-sparkling drinks
    • Graph 25: consumer behaviour – sparkling vs non-sparkling, 2024
    • Consumers are less willing to drink non-diet CSDs, while growth slows in diet/light CSDs
    • Graph 26: consumption trends – increased consumption, 2023 vs 2024
    • Graph 27: consumption trends – reduced consumption, 2023 vs 2024
    • Consumption shifts towards Tier 2 and 3 cities
    • Graph 28: consumption trends for sparkling water – increasing or maintaining consumption, by city tier, 2023 vs 2024
    • Graph 29: consumption trends for carbonated soft drinks – increasing or maintaining consumption, by city tier, 2023 vs 2024
    • Higher-income consumers still show stronger willingness to consume sparkling drinks, but there has been significant growth among respondents with lower incomes
    • Graph 30: consumption trends for carbonated soft drinks – increasing or maintaining consumption, by monthly household income, 2023 vs 2024
    • Graph 31: consumption trends for sparkling water – increasing or maintaining consumption, by monthly household income, 2023 vs 2024
    • Reasons for reduced consumption
    • Cutting back on sugar and artificial sweeteners are key reasons for reducing or stopping consumption
    • Graph 32: reasons for reduced consumption, 2024
    • Graph 33: ranking of reasons for reducing consumption, 2024
    • Excessive additives are the main factor hindering the consumption of flavoured sparkling water
    • Graph 34: reasons for reducing consumption – flavoured sparkling water, 2024
    • Consumers are concerned about the health issues that CSDs may cause
    • Graph 35: reasons for reducing purchases – non-diet carbonated soft drinks, 2024
    • Diet/light CSDs are recognised as being less harmful, but brands should be mindful of their 'artificial' image
    • Graph 36: reasons for reducing consumption – diet/light carbonated soft drinks, 2024
    • Consumption occasions
    • Leisure & entertainment and pairing with snacks remain the most important consumption occasions
    • Leisure & entertainment and pairing with snacks remain the most important consumption occasions
    • Graph 37: consumption occasions, 2024
    • Sparkling water has significant potential in sports scenarios, while CSDs lead in food pairings
    • Graph 38: consumption occasions, by respondents who are drinking more sparkling drinks, 2024
    • Tap into interest areas to unleash the potential of leisure occasions
    • Graph 39: areas of interest, 2024
    • Diverse interest areas offer rich opportunities to connect with consumers; boost category advantages by focusing on areas of overlap
    • Graph 40: increased consumption, by interest group, 2024
    • Food pairings
    • Hotpot & malatang remain the top foods to pair with, while snack pairings offer opportunities
    • Hotpot & malatang remain the top foods to pair with, while snack pairings offer opportunities
    • Graph 41: food pairings, 2024
    • Flavoured sparkling water is expected to dominate barbecue/hotpot/malatang dining occasions, while CSDs can leverage snacking to increase consumption
    • Graph 42: food pairings (by consumers who are drinking more of selected sparkling drinks), 2024
    • Purchase factors
    • A sense of novelty and brand reputation are both important factors
    • Graph 43: purchase factors, 2024
    • Graph 44: ranking of purchase factors – blurred beverages vs sparkling drinks, 2020 and 2024
    • Consumers with high-monthly household incomes are more interested in novel and unusual elements
    • Graph 45: purchase factors, by monthly household income, 2024
    • Nutrition fortification helps reach more consumers
    • Unflavoured sparkling water can achieve differentiated development through nutritional and functional enhancement
    • Graph 46: purchase factors, by respondents who drink more of selected sparkling drinks, 2024
    • Ingredients of interest
    • Basic nutritional enhancement and functional upgrades are preferred
    • Graph 47: ingredients of interest, 2024
    • Collagen and TCM ingredients can offer a boost to unflavoured sparkling water
    • Graph 48: ingredients of interest, by respondents who drink more of selected sparkling drinks, 2024
    • Consumer behaviour
    • CSDs are still indispensable in everyday consumption
    • Graph 49: consumer behaviour – necessity of carbonated soft drinks, by interest area, 2024
    • Graph 50: consumer behaviour – necessity of carbonated soft drinks, 2024
    • CSDs still face direct competition from flavoured sparkling water, while flavoured/unflavoured options are equally matched
    • Graph 51: consumer behaviour, 2024
    • Sugar substitutes are considered a healthy choice, but consumers are looking for reduced sweetness levels
    • Graph 52: consumer behaviour – sweetness and source of sweetness, 2024
    • Innovation in sour flavours is expected to help flavoured sparkling water seize a surprise victory
    • Graph 53: consumer behaviour – sour vs sweet, 2024
    • Unflavoured sparkling water can better meet demands to cut back on sweetness
    • Graph 54: consumer behaviour – unflavoured vs flavoured, by respondents who either agree or disagree with the statement, 2024
    • Graph 55: consumer behaviour – sparkling vs non-sparkling, by respondents who either agree or disagree with the statement, 2024
    • Sparkling drinks are strongly associated with relaxation
    • Graph 56: consumer behaviour – soothing mood, 2024
  5. Issues and insights

    • Meet dining-related functional demands through targeted innovations
    • As/paired with snacks is the most advantageous food pairing occasion for CSDs and sparkling water
    • Graph 57: consumption occasions, 2023
    • Pair soda with spicy snacks in a 'song of ice and fire'
    • CSD innovation in food pairing for relieving greasiness lags behind juice and RTD tea
    • Graph 58: non-alcoholic drinks carrying relieving greasiness/relieving spiciness/after a rich meal claims, by sub-category, 2020-24
    • Using pairing as the main positioning, leverage refreshing flavours to better complement foods
    • Healthy sparkling drink opportunities: Kombucha
    • Kombucha achieves growth in both popularity and volume sales
    • Graph 59: online** volume sales and value sales of kombucha products, 2023-24
    • Graph 60: mentions of and engagement with 'kombucha(康普茶)' on social media channels*, 2023-2024
    • Consumers see kombucha as tasty and especially focus on its bubbly texture and probiotic ingredients
    • Although skincare brands get in on the act, marketing must avoid exaggerating functionality
    • Promote local innovation to keep up with trends, emphasising the positioning of sparkling drinks
    • Enhance flavours to attract a wider audience
    • From reducing sugar to reducing sweetness
    • Zero sweeteners becomes the fourth 'zero'
    • Graph 61: carbonated soft drinks and sparkling water launches, by share of reduced sugar/sweetener launches, 2019-24
    • Products without sweeteners still have potential for varied flavour innovation
    • Emphasising that products are 'unsweetened' caters to the advanced demand for cutting back on sweetness
  6. Appendix – market size and forecast, research methodology and abbreviations

    • Market size and forecast
    • Methodology
    • Abbreviations

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