Industry Insights (DP IB Business Management): Revision Note

The soft drinks market

• The global soft drinks market is experiencing significant growth and change, influenced by health trends, new products, and changing consumer tastes

Market Size and Growth

• In 2024, the global soft drinks market was valued at approximately $465.36 billion. It is expected to grow to $491.36 billion in 2025, with an annual growth rate of 5.6%

• By 2029, the market is expected to reach around $598.26 billion, driven by increasing demand for non-alcoholic beverages and innovative products

Leading Companies and Brands

• Major players in the market include The Coca-Cola Company, PepsiCo, and Keurig Dr Pepper

  • In 2024, The Coca-Cola Company held a 17% share of the global retail volume, maintaining its leadership position

  • PepsiCo and Keurig Dr Pepper also have significant market shares, with popular brands like Pepsi, Dr Pepper, 7Up, and Snapple

Product Types and Consumer Trends

• Consumers are increasingly choosing healthier and functional beverages

  • Energy drinks and bottled water are leading growth, reflecting a shift towards health-focused options

  • Prebiotic sodas, which support digestive health, are becoming popular. Brands like Olipop and Poppi have gained attention in this area

  • The Coca-Cola Company plans to launch "Simply Pop," a line of prebiotic sodas in flavors like Strawberry and Pineapple Mango, targeting health-conscious consumers 

Market Dynamics and Challenges

• Traditional carbonated soft drinks (CSDs) face challenges due to health concerns about high sugar content and artificial additives

  • This has led to a decline in CSD consumption, prompting companies to develop low- or no-calorie alternatives and functional beverages

  • For example, The Coca-Cola Company reported a 4.2% increase in net revenue in the fourth quarter of 2024, driven by higher prices and steady demand, especially in emerging markets like India

• The industry also faces regulatory pressures and consumer concerns related to health and environmental sustainability

  • Discussions about implementing sugar taxes and reducing plastic usage are influencing company strategies and product formulas

  • For instance, proposed policies targeting high-fructose corn syrup (HFCS) could lead companies to reformulate products and explore alternative sweeteners

Emerging Markets and Regional Insights

• Emerging markets are playing a crucial role in the growth of the soft drinks industry

  • For example, Reliance Consumer Products, part of India's Reliance Group, has launched its home-grown cola brand, Campa Cola, in the United Arab Emirates

  • This move aims to connect with the Indian expatriate community and local consumers, competing in a soft drinks market valued at around $1 billion in the UAE 

The healthy snacks market

• The global healthy snacks market is experiencing significant growth, driven by increasing health awareness and changing consumer preferences

Market Size and Growth

• In 2024, the global healthy snacks market was valued at approximately $91.1 billion

• Projections indicate that by 2033, the market will reach around $147.1 billion, growing at a rate of 5.19%

• This growth is attributed to busy lifestyles, urbanisation, and a demand for convenient, nutritious snack options

Leading Companies and Brands

• Leading companies are continually innovating to meet the demand for healthier snack options

• Major players in the healthy snacks industry include

  • General Mills, Inc.

    • Known for brands like Cheerios and Nature Valley, offering a range of cereals and granola bars.

  • PepsiCo, Inc.

    • Offers healthy snack options through brands like Quaker, providing products such as oatmeal and rice cakes.

  • Nestlé S.A.

    • Produces nutritious snacks under brands like Gerber, focusing on healthy options for children.

  • Unilever

    • Offers health-orientated snack products through brands like Ben & Jerry's, which has introduced lower-calorie ice cream options.

  • The Kraft Heinz Company

    • Provides a variety of snack products, including those under the Planters brand, known for nuts and trail mixes.

Product Types and Consumer Trends

• Consumers are increasingly seeking snacks that align with health and wellness goals. Trends in the healthy snacks market include

  • High-Protein Snacks

    • Products like protein bars, nuts, and meat-based snacks are gaining popularity as consumers look to increase protein intake

  • Plant-Based Snacks

    • Items made from lentils, chickpeas, and other plant sources cater to the growing number of consumers adopting vegetarian or vegan diets

  • Gut-Health-Focused Snacks

    • Prebiotic and probiotic snacks are emerging, aiming to support digestive health. For example, Coca-Cola has introduced a line of prebiotic sodas under its Simply brand to compete with startups like Olipop and Poppi

  • Low-Carb and Keto-Friendly Snacks

    • With the revival of low-carb diets, snacks that fit ketogenic guidelines, such as cheese crisps and nut-based bars, are becoming more prevalent

Market Dynamics and Challenges

• The healthy snacks industry faces several challenges:

  • Balancing Health and Taste

    • Consumers desire snacks that are both healthy and enjoyable, prompting companies to innovate without compromising on flavour.

  • Sustainability Concerns

    • There is growing pressure to adopt environmentally friendly practices, including sustainable sourcing and packaging.

  • Regulatory Hurdles

    • Navigating different countries' regulations regarding health claims and ingredient approvals can be complex for multinational companies.

The bottled water market

• The global bottled water market has seen significant growth in recent years, driven by increasing health awareness, concerns over tap water quality and a preference for convenient hydration options

Market Size and Growth

• In 2024, the global bottled water market was valued at approximately $335.5 billion

• Projections indicate that by 2034, the market will reach around $565.23 billion, growing at a rate of 5.35%

• This expansion is attributed to rising consumer demand for safe and healthy drinking water, especially in regions where tap water quality is questionable

Leading Companies and Brands

The market is dominated by several key players, including

• Nestlé S.A.

  • Owner of brands like Perrier, San Pellegrino, and Vittel

• The Coca-Cola Company

  • Produces bottled water under brands such as Dasani and Smartwater

  • In 2024, Coca-Cola faced legal challenges in Los Angeles County over allegations of misleading consumers about the recyclability of their plastic bottles

• PepsiCo, Inc.

  • Offers bottled water through brands like Aquafina

  • Similar to Coca-Cola, PepsiCo was also implicated in the Los Angeles County lawsuit concerning plastic bottle recyclability claims

Product Types and Consumer Trends

• Consumer preferences are shifting towards premium and functional bottled water options

• The premium bottled water segment was valued at $38.6 billion in 2024 and is projected to grow at a rate of 6.7% from 2025 to 2034

• This growth is driven by demand for products perceived as healthier and of higher quality, such as spring water, which reached $10.2 billion in 2024

Market Dynamics and Challenges

• The bottled water industry faces several challenges

  • Environmental Concerns

    • The production and disposal of plastic bottles contribute to pollution and greenhouse gas emissions

    • In 2024, Los Angeles County sued major bottled water companies over misleading claims about plastic recyclability, highlighting the growing scrutiny over environmental impacts

  • Resource Exploitation

    • There are concerns about the extraction of large volumes of water by multinational corporations, potentially affecting local water supplies

    • In 2024, reports emerged of foreign firms extracting billions of litres from UK aquifers for bottled water production, raising questions about sustainability and local water security

  • Health and Safety Issues

    • Incidents of contamination have raised questions about the safety of bottled water

    • For instance, in 2024, Perrier faced concerns after traces of fecal matter were found in one of its source springs, leading to the suspension and destruction of over 2 million bottles