Growth Opportunities in Singapore Soft Drinks Market

Soft Drinks Market

Soft drinks market in Singapore recorded low volume growth of 1% in 2017. In 2018, revenue of the market amounts to US$ 514 million (S$ 706 million) and the market is expected to grow annually by 2.6% (CAGR 2018-2021). The average per capita consumption of soft drink stands at 59.5L and the per person revenue generation is US$ 89.02 (S$ 122.33) in 2018. The soft drinks players of Singapore observed volume decline attributed to weak consumer sentiment and rising health consciousness. The market volume of Singapore sharply decreased in 2017 and despite the forecast of growth of 2.6% (CAGR 2018-2021) annually, there are no signs that the market would recover.

Despite the various attempt of manufacturers’ to launch reduced- or zero-sugar beverages such as Coca-Cola Zero Sugar, still, the growth stood at stagnant across the region in 2017. Soft drink manufacturers failed in attracting the consumer who has shifted towards other categories. Government is taking continuous effort and have been advocating the manufacturers the war against sugar consumption in soft drinks through the implementation of a sugar tax and public campaigns. To understand responses and product innovations launched by drinks manufacturers, the government is analysing the performance of several soft drinks categories, such as bottled water, RTD tea, sports drinks and carbonates.

Increasing Demand for Healthier Products in the Singaporean Soft Drinks Market:

Demand for healthy and organic products is increasing and Singaporean consumers are ready to buy these speciality products at a higher price. Singaporean government recommended drink water rather than drinking these pre-packaged sugar-sweetened drinks. With the rising threat of diabetes, the Singaporean government have been actively taking measures to propose or implement policies to curb sugar intake in soft drinks. Consumers in Singapore have become more brand conscious when it comes to their health they generally prefer to go with the quality products only.

The Diabetes Prevention and Care Taskforce are continually studying additional measures studying the method that how they can encourage further reductions in sugar consumption in the country and suggesting their people learn from other countries experiences. On the urge of the Singaporean government, seven major soft drinks manufacturers agreed to lower the sugar content in all their drinks here to 12 per cent and below by 2020. Sugar tax has been implemented in Singapore and it is highly impacting high sugar content soft drink, where sweetened beverages are seen as refreshment essentials.

Challenges for the New Entrant in the Soft Drinks Market in Singapore:

For any new entrants in the soft drink market, there are lots of stumbling blocks in Singapore. To enter and compete effectively in a major beverage segment, such as carbonated drinks, it requires large-scale operations and huge capital outlay. It requires not only entering the market amongst other leading player but also established strong brand loyalty with their customers and retailers. New entrants often target niche areas, such as herbal drinks, exotic juices, or fruit smoothies, etc., where the leading players have little or no interest. So targeting such segment is a little bit breath-taking effort to enter and cockshot this segment.

As Asian speciality drink’s volume sales are projected to decline over the forecast period as the consumers are aware of their intake of sugar level. Bandung, sugar cane and grass jelly are considered to be fundamentally high in sugar, it is highly recommended to reduce sugar variants of these drinks and it is not sure that after reducing it, it may or may not be as effective in increasing overall volume sales as in other categories, such as juice and RTD tea. Although all the major players, such as Coca-Cola Singapore Beverages, F&N Foods, Pokka Corp, PepsiCo etc. continuously putting extra efforts to maintain its share, as the decline in the consumption of carbonates is affecting.

Opportunities in the Singaporean Soft Drinks Market:

As there are lots of challenges in Singapore for soft drinks manufacturers, so the opportunities. The Singaporean consumers become more health conscious and are demanding more transparency in their packaging labelling, health benefits and highlighting the nutritional content from the soft drink manufacturers. Also, they are willing to pay slightly more for healthier beverages. The soft drinks companies can try their hands on the regional people’s taste and flavour, they can easily target that segment and it will be easy to target the consumers. Singaporean is conscious about their health if they get any healthy soft drink product which belongs to their taste they can comfortably accept the change.

Singaporean soft drink market is mature and players, such as F&N Foods, Pokka Corp, PepsiCo and Coca-Cola Singapore Beverages continued to lead in 2017. They are all producing reduced sugar variants, such as Seasons Ice Lemon Tea Reduced Sugar or are applying labelling strategies, such as the Healthy Pyramid symbol on Coke Zero Sugar and Coca-Cola Light, responding to the war against diabetes and to communicate to consumers that the products are healthier than before. Consumers are more aware of their sugar intake, so targeting such drink in which if required than use processed sugar, jaggery or by-products which is low on sugar.

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