Table of Contents
Executive Summary
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- The market
- Loss in on-trade consumption means a market contraction in 2020
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- Figure 1: Short-, medium- and long-term impact of COVID-19 on CSDs and sparkling drinks, August 2020
- Total CSD volume consumption expects to recover to 2019 level between 2023-24
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- Figure 2: Total volume sales (retail and non-retail) and forecast of CSD, China 2015-25
- Figure 3: Retail value sales and forecast of CSD, China 2015-25
- Other sparkling drinks with healthier image will recover more quickly than CSD
- Companies and brands
- Coca-Cola’s healthier alternatives continue to strengthen its market leadership
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- Figure 4: Retail value and volume share of leading CSD players, 2017-2020
- Re-branding domestic CSD players to evoke nostalgic feeling
- The consumer
- Sparkling drinks enjoy popularity during and after COVID-19
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- Figure 5: Changes in consumption, April 2020
- Bubbles equal to refreshing and delightful drinking experience
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- Figure 6: Consumption impression, by gender, April 2020
- Under-30s finding it hard to differentiate diet and regular CSDs
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- Figure 7: Perception of diet CSDs, April 2020
- COVID-19 lockdown shifts focus to online retail spaces to manage risks
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- Figure 8: Purchasing channel, April 2020
- Opportunities to attract males with carbonated sports and energy drinks
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- Figure 9: Interest in innovation, April 2020
- Taste remains the key decision factor for majority
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- Figure 10: Attitudes towards sparkling drinks, April 2020
- What we think
Issues and Insights
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- Increased health awareness prompted by COVID-19 outbreak accelerating L/N/R sugar trend
- The facts
- The implications
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- Figure 11: Claims in new sparkling non-alcoholic drinks launches, China, Jul 2015 – Jun 2020
- Adaptability of carbonation opening up blurring opportunities in drinks
- The facts
- The implications
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- Figure 12: Examples of sparling sports and energy drinks, UK and China 2019-2020
- Young consumers aged 18-29 could make better choice facilitated by clarified on-package information
- The facts
- The implications
The Market – What You Need to Know
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- COVID-19 will impact on-trade volume sales of CSD
- Increasing numbers of players fuelling competition in sparkling water
Market Size and Forecast
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- Growth in retail sales cannot offset loss in on-trade consumption
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- Figure 13: Volume and value sales of CSD, China 2015-20
- Mintel forecasts volume sales will return to pre-COVID level between 2023-24
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- Figure 14: Retail volume sales and forecast of CSD, China 2015-25
- Figure 15: Retail value sales and forecast of CSD, China 2015-25
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- Figure 16: Non-retail volume sales and forecast of CSD, China 2015-25
- Figure 17: Total volume sales (retail and non-retail) and forecast of CSD, China 2015-25
Market Factors
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- COVID-19 outbreak fuelling innovation in healthy version of fizzy drinks
- Government proactively encouraging sugar reduction as part of healthy dietary guideline
- More players entering fierce competition by adding fizzy drinks to drive consumption
Key Players – What You Need to Know
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- Domestic CSD players re-entering the market fuelling competition
- Emerging brands extending product lines to sparkling water with signature flavours
- Sugar becoming the public enemy
- Sugar spotlight sets the tone for product innovation
Market Share
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- Coca-Cola’s growth led by increased exposure through online channels and healthy variation; PepsiCo suffered in both value and volume sales
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- Figure 18: Retail value and volume share of leading CSD players, 2017-2020
- Domestic brands re-entering competition aiming to evoke childhood memories
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- Figure 19: Hankou Er Change’s newly released CSD featuring cities in China
Competitive Strategies
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- Adopting ‘three zeros’ as the new standard
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- Figure 20: Fsjuice’s flavoured sparkling water with ‘three zeros’ claims
- Mega-brand leveraging the power of digitisation to create synergy
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- Figure 21: Coca-Cola’s ‘coke with meal’ campaign with Meituan-Dianping
- Signature flavours helping famous teashops to expand
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- Figure 22: MiniHeytea flavoured sparkling water poster claiming ‘quality guaranteed by Heytea’
- Levelling up the sponsorship game to stay close to young consumers
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- Figure 23: Nongfu’s TOT sparkling rice wine and tea drinks sponsoring popular reality show
Who’s Innovating?
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- Competition bubbling up in flavoured sparkling water
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- Figure 24: Percentage of newly launched sparkling non-alcoholic drinks subcategories, China, Jul 2015 – Jun 2020
- Figure 25: Flavoured sparkling water, China
- Slashing sugar in non-alcoholic drinks to help consumers reduce waistline
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- Figure 26: Average sugars (grams per 100g/ml) in new non-alcoholic drinks launches, China, Jul 2015 – Jun 2020
- Figure 27: Claims in new sparkling non-alcoholic drinks launches, China, Jul 2015 – Jun 2020
- Fizzy juice positioning as a light, nutritional, and flavourful hydration
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- Figure 28: Sparkling juice drinks, global
- Low ABV fizzy booze aiming to capture attention in China
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- Figure 29: Carbonated RTD alcoholic drinks, China
- Figure 30: Hard seltzer, global
- Caring for digestive health with functional ingredients beyond fibre
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- Figure 31: Flavoured sparkling drinks with gut friendly claims, global
- Protein and vitamins bringing fizzy drinks above and beyond
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- Figure 32: Upbeat sparkling protein water, UK
The Consumer – What You Need to Know
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- Palatable flavours and bubbles go well together
- Confusion exists in differentiating sugar from sugar alternatives in carbonated drinks
- Premium opportunities in adding carbonation to soft drinks
Consumption Usage
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- Intriguing flavours and bubbles are hard to resist
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- Figure 33: Changes in consumption, April 2020
- Females aged 25-29 enthusiastic about dabbling in healthy drinks
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- Figure 34: Changes in consumption, by gender and age, April 2020
- Tier 2 and lower cities usage catching up
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- Figure 35: Changes in consumption, those who claimed ‘drinking more’ and ‘about the same’ by city tiers, April 2020
- Education level is another divider for consumption behaviour
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- Figure 36: Changes in consumption, those who claimed ‘drinking more’ by education, April 2020
Consumption Impression
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- Carbonation creates refreshing and delightful drinking experiences
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- Figure 37: Consumption impression, by gender, April 2020
- Multi-sensational drinking experience enticing consumers aged under 30
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- Figure 38: Consumption impression, by gender and age, April 2020
Perception of Diet CSD
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- Diet CSD stands for trendiness; but confusion exists
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- Figure 39: Perception of diet CSD, April 2020
- Young consumers aged under 30 puzzled by sugar and calories in CSD
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- Figure 40: Perception of diet CSD, by gender and age, April 2020
- Figure 41: Perception of diet CSD, by gender and age, April 2020
- High income earners’ preference is rooted in their ability to distinguish the difference
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- Figure 42: Perception of diet CSD, by monthly personal incomes, April 2020
- Figure 43: Perception of diet CSD, by monthly personal incomes, April 2020
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- Figure 44: Perception of diet CSD, by monthly personal incomes, April 2020
- Figure 45: Perception of diet CSD, by monthly personal incomes, April 2020
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- Figure 46: Perception of diet CSD, by monthly personal incomes, April 2020
Purchasing Channel
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- Offline retailers enjoying good foot traffic
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- Figure 47: Purchasing channel, April 2020
- Convenience element attracting 18-24 year old
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- Figure 48: Purchasing channel, by gender and age, April 2020
- High income earners embracing omnichannel retailing
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- Figure 49: Purchasing channel, by monthly personal income, April 2020
- Parents with kids utilising multiple channels to find sparkling drinks to satisfy family members
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- Figure 50: Purchasing channel, by family structure, April 2020
Interest in Innovation
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- Sports and energy drinks could be revitalised with carbonation
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- Figure 51: Interest in innovation, April 2020
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- Figure 52: Percentage of newly launched RTD energy drinks and sports drinks with carbonated (fizzy/ sparkling/ bubbly) texture, by region, Jul 2015 – Jun 2020
- Females curious about sweet sparkling beverages
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- Figure 53: Interest in innovation, by gender and age, April 2020
Attitudes towards Sparkling Drinks
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- Long lasting, mild carbonation preferred by most consumers
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- Figure 54: Attitudes towards sparkling drinks, April 2020
- Premium-looking glass bottles attracting more females aged 30-39
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- Figure 55: Attitudes towards sparkling drinks, April 2020
- Taste matters the most
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- Figure 56: Attitudes towards sparkling drinks, April 2020
- Confused about functionality of sparkling water
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- Figure 57: Attitudes towards sparkling drinks, April 2020
- Figure 58: Attitudes towards sparkling drinks, by gender and age, April 2020
Meet the Mintropolitans
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- More MinTs embracing palatable flavours as well as bubbles
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- Figure 59: Consumption Usage, by consumer classification, April 2020
- MinTs understand diet CSDs
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- Figure 60: Attitudes towards sparkling drinks, by consumer classification, April 2020
Appendix – Market Size and Forecast
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- Figure 61: Total volume sales and forecast of CSD, China 2015-25
- Figure 62: Retail value sales and forecast of CSD, China 2015-25
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Appendix – Methodology and Abbreviations
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- Methodology
- Abbreviations
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