Where Consumers Shop for Soft Drinks

February 2023

E-commerce continues to account for a relatively small share of global retail sales of soft drinks, with small local grocers still the leading individual channel thanks to the popularity of such outlets in many emerging markets. However, modern grocery retailers as a whole are the dominant force for retail sales. While the on-trade is recovering from its 2020 losses incurred during COVID-19 lockdowns and foodservice closures, sales are not expected to return to pre-pandemic levels before 2024.

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This report comes in PPT.

Key findings

E-commerce is growing but there is regional variation

Online sales are rising globally, with North America leading the way. However, some countries like the UK and Germany are seeing a decline in e-commerce growth. Price-sensitive consumers and lack of infrastructure remain the main challenges for the channel.

Physical stores are still important, but reasons for visiting are changing

Consumers still value physical stores for trust, immediacy, and convenience. Small local grocers remain crucial, especially in developing countries. At the same time, on-the-go consumption is recovering, with convenience stores benefiting.

The pandemic has reshaped consumer behaviour

More and more individuals are opting to purchase their groceries online, either for delivery or pick-up. At the same time, more consumers are looking for discount grocers and private label brands, as more people seek value for their money.

New retail models are emerging

Social media platforms are becoming marketplaces for drinks discovery and purchase, benefiting online brands and challenging established ones to innovate. Subscription services offer convenience with automatic delivery, and affordability and convenience are key for both online and physical channels.

The on-trade channel is recovering slowly

The recovery of on-trade sales has been hampered by inflation, supply chain issues, and labour shortages. Bottled water is leading the way as a beverage choice, while consumers are choosier about when to go out, seeking experiences that offer good value for their money.

Key findings
Global off-trade value growth rate returns to pre-pandemic levels in 2022
Reduced-sugar energy drinks seeing particularly strong growth in 2022
Industry players explore different ways of mitigating rising supply chain costs
The many drivers of inflation within soft drinks
The soft drinks industry begins to move the needle on sugar, led by low/zero alternatives
Sustainability concerns making a mark on consumption and consumer decision-making
Offline retail continues to dominate soft drinks, despite recent e-commerce gains
Australasia, Asia Pacific and Western Europe with the biggest e-commerce shares
Middle East and Africa lacking the infrastructure for greater online sales
New consumer behaviour fuels Deliveroo’s growth and quick commerce
Small local grocers still have an important role to play
In spite of pressure from e-commerce, supermarkets performing strongly
C-stores record a healthy 2017-2022 CAGR despite the impact of the pandemic
Pressure on margins for players in an inflationary environment?
Grocery retailers still dominate sales of soft drinks
Aldi has moved up to join Lidl in the top three modern grocery retailers
Strong growth in actual sales of private label bottled water over 2017-2022
North America and Western Europe account for the bulk of private label sales
Private label now up to a 50% share of still bottled water sales in the US
Strong e-commerce growth due to the pandemic…
…but e-commerce remains a relatively undeveloped sales channel in soft drinks
Bottled water continues to clearly lead e-commerce sales of soft drinks
E-commerce still a relatively minor retail distribution channel in soft drinks
Latin America and Eastern Europe record the strongest CAGRs
Pinduoduo continues moving up the rankings
Asia Pacific and North America the biggest regions for vending
Japanese players dominate the top five vending companies
On-trade continues its gradual recovery in 2022
High inflation rates likely to hit both off- and on-trade sales
Inflation a short-term trend, cutting sugar intake and sustainability are long-term trends
Key takeaways

Soft Drinks

This is the aggregation of the following categories; Carbonates, Fruit/vegetable juice, Bottled water, Functional drinks, Concentrates, RTD tea, RTD coffee and Asian speciality drinks.

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