The soft drinks segment, which was among the worst-hit due to pandemic-induced restrictions, has emerged as one of the fastest growing categories in 2022 on the back of a sharp recovery.
As per data sourced from Kantar, the bottled soft drinks segment in the January-September period in 2020 was trailing pre-pandemic (2019) volumes by 23 per cent. Cut to 2022, the category volume growth in January-September period was up 38 per cent over the total 2019 levels.
Recovery rate double
The marketing data and analytics firm pointed out that the recovery seen in the category has been one of the sharpest in recent history with nearly one year’s worth of volumes of 2019 being achieved in half a year in 2022.
K Ramakrishnan, MD-South Asia, Kantar Worldpanel, pointed out that factors such as the scorching summers in 2022 enabled the category to record more than double the volumes in summer this year compared to the summer last year. Other factors such as resurgence in out-of-home channels and pent-up demand backed by consumers getting back to socialising also led to surge in aerated beverage sales this year, he added.
Overall in the 12-month period ended September, the bottled soft drinks category garnered a growth of 59 per cent (MAT September 2022).
Higher distribution
Soft drink makers also stepped up on distribution which led to an increase in category penetration. In the 12 months period ended September 2021, the category’s penetration in urban regions was pegged at 41 per cent in urban and 23 per cent in rural regions. In the 12 month period ended September 2022, the category penetration grew to 38 per cent in rural and 52 per cent in urban markets. While in urban markets soft drinks were consumed by 13 million additional households, while rural’s penetration growth represented 32 million additional households, as per estimates by Kantar.
Capacity up
In-line with the strong growth visible in 2022, bottlers of Coca-Cola and PepsiCo in India have stepped up focus on ramping up manufacturing capacity. Coca-Cola India has earlier stated that its bottlers are in the process of investing $1 billion to expand manufacturing capacity by 30-40 per cent till March 2023. Varun Beverages, the leading bottler of PepsiCo, is also in the process of investing about ₹1,200–1,300 crore for capacity enhancement.