The Rise of the Carbonated Beverages Market Amidst Pandemic Uncertainties

February 18, 2022
min read

According to new data from Nielsen, even though carbonated drinks dipped in popularity compared to their better-for-you (BYF) drinks, the former actually grew 11% in several outlets at the end of January. Information Resources Inc also reported that there was a 9% increase in several outlets for 52 weeks ending on May 16th.

Photo of Cola Pouring Into a Glass with Ice Cubes
Drinks and food on a table

What Brands Need To Do

While these numbers are promising, brands are stepping up and finally taking notice that diversifying their portfolio should be at the top of their list both pre and post pandemic. It’s the best way to ensure their brand remains sustainable with a customer base that is slowly transitioning to healthier and diverse options.

Take Coca-Cola for instance. While most soda companies spent money adding coffee, water and sports drinks to their offerings, Coca-Cola spent $5.1 billion buying Costa Coffee. Not one to be left behind, arch rival PepsiCo spent $3.2 billion acquiring SodaStream. The fact is that carbonated drinks are not going anywhere soon as they are the main product for these giant brands.

In the last few years, both beverage brands have introduced smaller cans which are low in sugar and are available in a range of flavors. These are of course, aimed at health conscious consumers who are starting to dominate the market. Both brands have realized that in order to remain relevant with consumers, they need to look into particular tastes. Their efforts have borne fruit – both beverage giants are investing more into developing solutions that can ensure their longevity.

Coca-Cola for instance, is working with grocery customers to alter supply chains and prioritize delivery of core brands as more people adjust to working at home and reduce stock-up trips. They are doing everything they can to aid the customer.

During these challenging times, brands like Coca-Cola are targeting comfort, familiarity, and customer dedication with solid distribution channels. Decades of building relationships with families and communities with value added products are finally paying off.

The fact is that during trying times when nothing seems certain, people turn to the familiar for comfort. Beverage brands are taking note of this. Coca-Cola will continue to invest in packaging options at different price points that can meet customer needs while increasing revenue for each outlet. Recent successes in South Africa and other countries have proved promising. 

The Importance of Digital Solutions 

With the pandemic going nowhere anytime soon, there has also been a surge in online beverage sales. It has doubled in some countries as more and more people choose home delivery options. Coca-Cola has also jumped on the bandwagon by not only opting for cheaper and better packaging options, but also by boosting investments in digital marketing, in-app visibility with online grocers, and by enabling digital fulfilment models.

Bottlers are also looking onto B2B solutions to improve customer orders and deliveries. The company is also going to roll out a B2C platform in Latin America which consumers can use to order groceries and drinks from local stores. 

Rise in Popularity of ‘Healthier’ Beverages 

Lead analyst for IBISWorld Inc, Jacqueline Hiner, believes that none of those solutions will bear fruit if they are not supporting healthy soft drinks. As per her research, sales have declined for products that contain high fructose corn syrup and sugar as more and more people focus on their health amidst the pandemic.

While there was a surge in demand of carbonated drinks during these last two years, a significant growth in healthy eating has placed some strain on those figures. It has not been enough to make up for the decline in traditional sugary carbonated drinks. 

However, the demand for specialized products has increased, especially for those that are made with less processed ingredients such as cane sugar and drinks that don’t have artificial sweeteners. Producers of carbonated drinks have also released healthier alternatives to the health conscious market. 

Many brands are also releasing seasonal flavors to make consumers interested. For example, MTN DEW has provided a healthier option in the form of Baja Blast Zero Sugar for its health conscious patrons and released two new flavors as well. 

Coca-Cola is responsible for 45% of the total global volume of drink sales so it is focusing more on refreshing itself. One of the initiatives it invested in was Coca-Cola Zero Sugar which is basically Coke Zero that tastes like original Coke. The brand also expanded by adding new flavors such as Zesty Blood Orange, Strawberry Guava, and Blueberry Acai. 

The efforts have paid off big time. Coca-Cola is boasting growth in double digits for its new, healthy drink along with those of a new flavor, Orange Vanilla Coke. All in all, drink sales of the brand rose 1% in the first quarter and the brand made 6% progress in sales growth. 

The Carbonated Landscape 

Keeping all of the aforementioned facts in mind, we can say that the carbonated beverage industry will continue to go strong as it evolves to meet changing consumer demands. As more and more realize that ‘diet’ doesn’t equate to a healthier drink, beverage brands such as Coca-Cola are finally pulling the wool off their eyes by replacing them with ‘sugar-free’ options. 

These changes and replacements are finally providing health conscious consumers with beverages that not only taste great, but also won’t affect their waistlines drastically. People can now indulge in their favorite drinks without guilt. 

No one can say what the future has in store for the beverage industry. As new variants of the virus emerge every couple of months or so, the need for healthy consumables will rise rather than decline. Brands that do not wish to remain behind have to get with the program and meet those demands head on. 

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