The Chinese Soft Drinks Market: What Consumers Drink and Why?




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Product Synopsis

This report provides the results for the Soft Drinks market in China from Canadean's unique, highly detailed study of consumers' Consumer Packaged Goods (CPG) consumption habits, and forms part of an overall series covering all CPG product markets. Its coverage includes, but is not limited to, consumption behaviors, the extent to which consumer trends influence their consumption, the value of the market these trends influence, and brand and private label choices as well as retailer choices in organized sector. Much of this information can also be analyzed by specific consumer groups, providing hard and fast data on consumers and markets at the product category level.

Introduction and Landscape

Why was the report written?

Marketers in the Soft Drinks market face a major challenge. Understanding market size and segmentation is valuable, but the key to effective targeting is knowing just how valuable specific consumer groups are, and being able to quantify the impact of consumer trends. This data report solves these problems by providing survey-based data on consumer trends and consumer groups, and market data that shows the exact size of consumer groups, how much of the Soft Drinks market they account for, and which consumer trends drive their behavior.

What is the current market landscape and what is changing?

As consumer confidence increases proportionally to economic recovery, consumer trends will be directly affected. Since the global financial crisis of 2008-2009 the organized retail market has been characterized by an increase in the amount of discounted and own-brand products. Consumers have traded down in more essential product categories such as Bottled Water and Juices, while consumption has declined in product categories such as Sparkling Soft Drinks, Concentrates, Functional Drinks, Smoothies, and Ready to Drink products. However, the Chinese economy has recovered quickly, and as economic and market recovery continues over 2012, consumption patterns will record a positive trend in both the Medium and Heavy frequency bands and the amount of Non-users should decrease.

What are the key drivers behind recent market changes?

Consumers' uptake of products and the influence of consumer trends are fundamental causes of change in markets - making knowing what these trends are and the extent of their influence crucial. The survey-based data provided in this report examines over 20 consumer trends that affect the market and examines the share of consumption across 26 consumer groups. This data provides a detailed insight into exactly who the consumer is and just how much impact the latest consumer trends are having.

What makes this report unique and essential to read?

The data provided is unique in the market as it tracks consumer behavior through to its actual value impact on a product market. This provides readers with a unique data analysis of the market, allowing marketing tactics and strategy to be updated in line with the very latest consumer behaviors.

Key Features and Benefits

  • Consumer data, based upon proprietary surveys and then consumer group tracking and modeling for the following specific categories: Bottled Water, Sparkling Soft Drinks, Concentrates, Functional Drinks, Smoothies, Juices, and Ready to Drink Tea and Coffee.
  • Detailed consumer segmentation covering over 26 consumer groups, 20 consumer trends, and consumption frequency for each product category.
  • Consumer penetration for brands and private labels, based upon the original survey and then subsequent consumer tracking and modeling.
  • Unique retailer choice data at the product category level organized sector, based upon the original survey and then subsequent consumer tracking and modeling.

Key Market Issues

  • Consumer segment analysis reveals that Bottled Water has a particularly low penetration rate among Older Consumers, where over half are Non-users compared to a high of 30% among Older Young Adults. This indicates that Older Consumers are less likely to pay for bottled water, instead turning to alternatives such as tap water or other Soft Drinks at a greater frequency than younger consumers.
  • While the Smoothies category features a high proportion of Non-users, of those that do consume the product, many do so at a Heavy frequency. Heavy consumption is particularly evident among Kids and Babies and Tweens and Early Teens.
  • While overall penetration of Ready to Drink Tea and Coffee is similar amongst men and women, men are more likely to be Heavy consumers. In contrast, more women consume at a Medium frequency, highlighting the potential for these consumers to transition into Heavy consumption.

Key Highlights

  • Cohort group analysis reveals that Pre-Mid-Lifers have the highest value share of the Soft Drinks market with20%, indicating that it is the most important target group.
  • Brand analysis reveals that private labels have more than20% penetration in the Smoothies market in China, compared to less than 10% penetration in Sparkling Soft Drinks. This is due to the lack of strong national brands, compared to the Sparkling Soft Drinks market that features companies such as Coca-Cola and PepsiCo.
  • Juices account for more than 30% of total sales in the Chinese Soft Drinks market. It is followed by Smoothies, Bottled Water, and Ready to Drink Tea and Coffee. Sparkling drinks occupies fifth position in China.