Global Soft Drink Sales Continue to Decline as Consumers Shift to Fruit Juices: FMI Study

Over 3 thousand billion tons of powdered soft drinks were consumed in 2018, equaling a market value of US$ 10.6 billion. FMI’s new study reveals that consumption of powdered soft drinks is projected to grow at a subdued 2.3% y-o-y in 2019. Key factors identified in the FMI study can have a prominent influence on the overall growth of the powdered soft drinks market.

Waning popularity of powdered soft drinks on the back of increasing demand for RTD beverages

Overall soft drink consumption is hit by growing natural label demand and increasing health consciousness

Continued popularity of powdered beverages in generation X and millennials supports the dwindling sales of powdered soft drinks

“Soft drinks consumption continued to dwindle in the past half a decade with evolving consumer demand trends such as nourishment, low or no-sugar, natural, clean label and sustainability. Despite their unique space in the beverage industry, popularity of powdered soft drinks declined in parallel to the meteoric rise in innovations and new flavors of other types of soft drinks. Traditional popularity combined with steady flavor innovations are likely to sustain powdered soft drinks sales with a projected 2.8% annual growth in revenues in 2019,” says FMI.

Orange Flavored Powdered Soft Drinks Top Selling

Orange remains the most popular flavor among a plethora of fruit flavors offered by beverage manufacturers. The FMI study finds that consumption of orange flavored powdered soft drinks is expected to surpass 1065 billion tons in 2019 and account for over 31% of all the powdered soft drinks market consumption.

Despite the introduction of multiple variants to stand-out in the market competition, orange followed by apple continues to capture consumer traction owing to their traditional popularity among consumers. Apple is the second most highly liked flavor in beverages and held nearly 20% of all the powdered soft drinks consumption in 2018.

With the evolving palate of consumers for different flavors, FMI study finds that collectively apple, mango and berry will grow at over 3% y-o-y in 2019 and account for over one-third share of total consumption.

Sales in Household Application Highest

The study reveals that powdered soft drinks’ huge demand continued in the household application in the past decade. In 2019, sales in the household application will account for over 85% of all powdered soft drinks sales globally. Powdered beverages witnessed significant penetration in household application due to affordability combined with taste.

While the sales in household application continue to grow steadily, FMI shows that purchase of powdered soft drinks among institutional buyers will witness a steady rise with a 3.4% annual growth projected in 2019.

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Distribution through Mass Grocery Retailers Significant

Over 38% of all the powdered soft drinks sold in 2018 were through mass grocery retailers. Owing to the affordable prices provided by these retailers, mass grocery retailers remain the prime choice of consumers for grocery purchase. Similar trend follows in powdered soft drinks market wherein consumer purchase of powdered beverages through mass grocery retailers continue to rise.

According to the study, distribution of powdered soft drinks through hypermarket/supermarket and discount stores remains second highest wherein collectively they accounted for 45% of the total powdered soft drinks consumption in 2018.

Pouches and Sachets of Powdered Soft Drinks Highly Preferred Packaging Solutions

FMI thoroughly studied consumer preference for different packaging solutions of powdered soft drinks available in the market. The study shows that pouches and sachets are highly preferred packaging solutions for powdered soft drinks among consumers. Over 86% of the powdered soft drinks sold were packaged in pouches and sachets in 2018. While the status-quo is expected to continue in the future, the FMI study finds that consumption of powdered soft drinks in bulk packaging is expected to at 3.8% annual rate in 2019.

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Europe Leads Consumption, APEC Consumers Grow Rapidly

As per FMI regional valuation, Europe accounted for nearly one fourth of the powdered soft drinks consumer in 2018. North America is the second largest consumer of powdered soft drinks. While the status-quo is expected to continue in 2019, the study reveals that APEC will outsell these prominent consumers beyond 2019. Developing economies in APEC and MEA are likely to witness increasing consumption of powdered soft drinks with the expanding middle class that prefers affordable products in their purchase.

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