The soft drinks market - United Kingdom

1.1 Definition and scope of the study

The soft drinks market includes the different types of drinks listed below:

• Sodas
• Fruit and vegetable juices
• Syrups
• Iced teas

These are mainly marketed by food distribution networks (supermarkets, grocery stores, etc.) or out-of-home consumption locations (restaurants, bakeries, vending machines, etc.):

Overall, the market is driven by various innovations (packaging and new formats in particular) and marketing efforts that help to stimulate demand in a sustainable manner, but also by general price growth over many years.

The global market is dominated by North America and Europe in terms of consumption; however, Asia is the fastest growing area. In the Western World, brands try to differentiate themselves in order to maintain sales amid growing health concerns in society. Indeed, different flavors and healthier alternatives (zero calorie for instance) prevail.

Market structure remains somewhat concentrated on the global scene; the industry is dominated by global corporations like Coca Cola, PepsiCo, and Anheuser-Bush InBev.

In the UK, the Soft Drinks Industry Levy (SDIL) was implemented in April 2018. This implied that producers were faced with higher tax and requirements to reduce sugar contents. However, soft drink brands have maintained sales levels, and are expected to increase these going forward. Strong customer loyalty is the underlying factor for this phenomenon.

Moreover, the product offering will change going forward; as obesity in the UK is a growing problem, producers must turn to healthier alternatives, such as carbonated drinks, reduced sugar, and natural sweeteners.

In 2019, the most sold brand in the UK were Coca Cola, followed by Pepsi Max, Diet Coke and Highland Spring. Although the distribution of brand sales is fragmented, the company market share is dominated by Coca Cola and Pepsi who together held 32% of all soft drink sales in 2019.