The Manufacture and Wholesale of Non-Alcoholic Beverages in South Africa 2024

Challenges

Increases in the sugar tax could raise costs for producers and discourage consumption of sugary drinks. Increasing cost of raw materials, electricity and other input costs.

Introduction

Soft drink revenue grew strongly in 2023. Although carbonated soft drinks containing sugar are more popular, increasing numbers of consumers are buying low-sugar or sugar-free products or switching to healthier alternatives, like still or carbonated water and 100% fruit juices. The industry is responding to these demands by continuously innovating and introducing new flavours and products. Energy drinks, currently the fastest-growing carbonated drink, have attracted new local players and international investments. While global brands dominate, local brands are competing by focusing on price and flavour innovation. Major players reported that trading conditions continue to be affected by pressure on consumer spending.

Opportunities

CBD products. Growing demand offers opportunities for product innovation in low calorie and low sugar options. Growth in energy drinks sector provides opportunities to introduce new products and flavours. Sustainable packaging.

Outlook

The strong demand for bottled water is expected to continue. The outlook for health drinks is positive as major brands promote their products. Major players report that consumer demand will remain constrained, and raw material and packaging costs will remain high, putting pressure on volumes in the year ahead. A revised sugar tax, which will likely be implemented in coming years, may result in manufacturers increasing prices to retain margins or reformulating products with less sugar. Energy drinks, which recorded the biggest volume increase in 2023 are forecast to continue to grow. The fruit juice category is expected to enjoy a positive outlook in the short to medium term.

Report Coverage

This report focuses on the manufacture and wholesale of non-alcoholic beverages which include carbonated soft drinks, bottled water, sports drinks, energy drinks, health drinks, cordials and concentrates, and dairy and fruit blends. The report includes information on the state of the industry, recent investments and new products and notable players. There are profiles of 26 companies including major international companies such as Nestlé, Coke manufacturers and bottlers such as Coca-Cola Beverages Africa and Coca-Cola Peninsula Beverages, Pepsi manufacturers and bottlers including PepsiCo subsidiary Pioneer Foods and The Beverage Company, major local producers such as Tiger Brands and RFG, and local brands such as BOS.

Trends

Consumers are increasingly buying bottled water, particularly 5L packs, to stock up in case of shortages. Increased sales of private label due to lower prices and quality improvements. Increasing demand for greater choice. Larger pack sizes are driving growth due to their affordability. Move to sustainable packaging. Rising demand for healthier alternatives to traditional sugary drinks.