Soft Drinks Market - Forecasts from 2023 to 2028

The soft drinks market is estimated to grow at a CAGR of 3.82%, reaching US$305.216 billion in 2028 from US$234.739 billion in 2021.

Over the next years, market development is anticipated to be aided by rising disposable incomes, changing lifestyles, and an expanding population. Additionally, it is expected that millennial popularity and increased R&D spending in the food and beverage business would fuel industry demand. Consequently, major players are witnessing high profits in the market. For instance, for the fiscal year that ended on March 31, 2022, RRVL recorded consolidated sales of 199,704 crores ($ 26.3 billion) and a net profit of 7,055 crores ($ 931 million). The purchase of the Campa brand was a component of Reliance's plan to expand its FMCG division and give it a clear focus by creating its private labels and purchasing formerly well-known regional brands.

Continuous product developments by key market players

Over the forecast period, it is anticipated that new product releases will continue to be a top strategy for industry players. Major Melon Zero Sugar and Mtn Dew Major Melon were two new products PepsiCo introduced in January 2021 within its carbonated soft drink category. With this new carbonated soft drink, the firm hopes to give its customers a flavor of nostalgia. It comes in 12-ounce bottles in a pack of 12 and 20-ounce bottles.

Additionally, in November 2022, NourishCo Beverages, a 100% subsidiary of Tata Consumer Products Ltd (TCPL) and the manufacturer of Himalayan packaged water, premium honey and preserves, and ready-to-serve fruit drinks is betting on the unorganized nature of the beverages market in India and plans to introduce products that satisfy regional tastes while standing out from the competition in terms of innovation.

Strategies adopted by companies to drive market growth.

Companies are adopting strategies to entice a younger generation of tech-savvy customers. For instance, in April 2022, Zero Sugar Byte, a limited-edition beverage from Coca-Cola, is said to have "the flavor of pixels," according to the company. It is inspired by the gaming industry, namely the online video game Fortnite and the metaverse (the collective term for 3D virtual worlds that stimulate social engagement).

Firms are continuously working on their version of differentiated flavors to increase their market share in the highly competitive soft drinks industry. In March 2023, for example, Nestlé announced that it would soon introduce a coffee-lemonade-hybrid soft drink. It has applied to the Intellectual Property Office to register the term "Coffeenade" under two classes: class 32, which covers lemonades and fizzy beverages with a coffee taste, and class 30, which covers coffee-based beverages and iced coffee.

Similarly, in January 2023, a new soft drink with a lemon-lime taste named STARRY was introduced by PepsiCo. It is available at shops and food service establishments across the US in Regular and Zero Sugar varieties.

In addition, in January 2023, a new flavor was introduced by UK startup ZAG Drinks to expand its menu. With ZAG ICE, a new non-alcoholic beverage line created exclusively for adults during social gatherings, the category of adult soft drinks is given a revitalizing, fresh viewpoint.

The United States remains the dominant market in the North American region.

The United States is one of the world's largest consumers of soft drinks, with a significant portion of its population regularly consuming these beverages. The market is dominated by well-established brands such as Coca-Cola, PepsiCo, and Dr. Pepper Snapple Group, which have a strong presence and offer a diverse portfolio of products.

Shifts in consumer lifestyles and preferences have significantly impacted the market. Consumers increasingly seek convenient and on-the-go beverage options to fit their busy routines. Soft drinks, especially bottled water, energy drinks, and ready-to-drink teas and coffees, cater to these evolving consumer needs. Moreover, soft drink companies continuously innovate and introduce new products to attract consumers. They are expanding their product portfolios with new flavors, variations, and packaging designs. This constant innovation helps drive consumer interest and supports market growth.

On the other hand, increasing disposable income levels positively impact the soft drinks market. As consumers have more purchasing power, they are more likely to spend on beverages, including soft drinks, as a part of their daily routine and social activities. Moreover, technological advancements have enabled the development of new manufacturing processes, packaging solutions, and distribution channels. These advancements streamline operations, improve product quality, and enhance the overall efficiency of the soft drink industry.

Market Developments:

• In June 2023, Bisleri International, India's leading packaged drinking water brand and the country's first manufacturer of carbonated soft drinks (CSD), introduced three new, enticing flavors: Bisleri Pop (a carbonated drink with an orange flavor), Bisleri Rev (a carbonated drink with a cola flavor), and Bisleri Spyci Jeera. The new lineup of fizzy drinks captures GenZ's contemporary palate and the quest for the most refreshing taste. Each beverage has a powerful flavor that goes well with the functional stimulus.
• In May 2022, a Russian beverage manufacturer introduced a new line of soft drinks to replace the legendary brands that had abandoned the Russian market in the aftermath of its invasion of Ukraine. Russian drink manufacturer Ochakovo stated that CoolCola, Fancy, and Street would be available to consumers instead of Coca-Cola, Fanta, and Sprite. Since the Coca-Cola Company discontinued operations in Russia, the three international soda brands have been mostly absent from Russian store shelves. While Coca-Cola products are still available in stores, their costs have soared by almost 200% since the ban.
• In October 2022. Pepsico announced the reopening of the Pepsi-Cola Soda Shop by introducing a new, limited-edition flavor called Zero-Sugar Cream Soda Cola. As customers look for low-calorie choices, the demand for goods with lower sugar content is rising. Some nations employ budgetary measures, such as raising taxes, to lower the consumption of sugary beverages.

Market Segmentation:

By Type

• Carbonated
• Bottled Water
• Juice Drink
• Functional Drink
• Others

By Packaging

• Bottles
• Canned
• Soda Fountain

By Distribution Channel

• Online
• Offline

By Geography

• North America
• United States
• Canada
• Mexico
• South America
• Brazil
• Argentina
• Others
• Europe
• United Kingdom
• Germany
• France
• Spain
• Others
• Middle East and Africa
• Saudi Arabia
• UAE
• Israel
• Others
• Asia Pacific
• Japan
• China
• India
• South Korea
• Indonesia
• Thailand
• Others