---
title: "The Beverage Industry Is 'Never Out of Style', and the Battle for Supremacy Will Never Stop..."
description: "In the future, the battle for supremacy in the beverage industry will not cease. In 2019, the food and beverage industry remained a standout sector in the consumer market, with both production and sales booming. Data shows that from January to October 2019, national beverage output reached 152.312 million tons, a year-on-year increase of 6.6%, and retail sales of beverages exceeded 172.3 billion yuan, up 9.8% year-on-year. Industry insiders say that as Chinese residents' consumption concepts change, they pay more attention to the health and safety of beverages, and more consumers are choosing bottled water, fruit juice drinks, tea drinks, and so on."
author: "王晓"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
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published: "2020-03-11"
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# The Beverage Industry Is 'Never Out of Style', and the Battle for Supremacy Will Never Stop...

> In the future, the battle for supremacy in the beverage industry will not cease. In 2019, the food and beverage industry remained a standout sector in the consumer market, with both production and sales booming. Data shows that from January to October 2019, national beverage output reached 152.312 million tons, a year-on-year increase of 6.6%, and retail sales of beverages exceeded 172.3 billion yuan, up 9.8% year-on-year. Industry insiders say that as Chinese residents' consumption concepts change, they pay more attention to the health and safety of beverages, and more consumers are choosing bottled water, fruit juice drinks, tea drinks, and so on.

**In the future, the battle for supremacy in the beverage industry will not cease.**
In 2019, the food and beverage industry remained a standout sector in the consumer market, with both production and sales booming. Data shows that from January to October 2019, national beverage output reached 152.312 million tons, a year-on-year increase of 6.6%, and retail sales of beverages exceeded 172.3 billion yuan, up 9.8% year-on-year.
Industry insiders say that **as Chinese residents' consumption concepts change, they pay more attention to the health and safety of beverages, and more consumers are choosing bottled water, fruit juice drinks, tea drinks, and so on.**
**-01-
**Keyword 1: Plant-Based Revolution**
In 2019, the plant-based beverage market developed rapidly. During the 2019 "Double 11" shopping festival, plant-based beverages surpassed traditional super products like cola to become the most favored "national beverage" among consumers.
Data shows that in 2007, China's per capita consumption of plant-based beverages was only $3.2, and by 2016 it reached $9.9 per person, about one-tenth of the U.S. per capita consumption. It is estimated that by 2020, the market size of China's plant-based beverage industry will reach about 25% of the total market size of the beverage manufacturing industry, officially becoming a major sub-category of the beverage manufacturing industry.
Currently, there is no leading brand in the plant-based beverage sector, but there are many super single products in sub-segments, forming the industry's unicorn product camp. Yangyuan (Six Walnuts), Chengde Lulu, and Hainan Yeguo (Coconut Palm) each hold more than 80% of the market share in walnut milk, almond milk, and coconut juice drinks, respectively. These brands occupy market share through a "big single product + channel refinement" model, and as the market changes, they are continuously upgrading their brand strategies toward high-end, youthful, and healthy positioning.
Industry insiders analyze that unlike traditional industries where well-known enterprises divide the market, **the plant-based beverage industry presents a situation of "ants are big, elephants are small."** However, against the backdrop of a promising outlook for the plant-based beverage market, large beverage companies are also trying to tap into this market.
Recently, Coca-Cola launched its AdeZ plant-based beverages in China for the first time, including AdeZ Barista Edition oat-based drinks, officially entering China's plant-based beverage market. Before AdeZ's entry, Swedish oat milk brand Oatly and Hong Kong soy milk brand Vitasoy had already launched related products in mainland China to seize the first-mover advantage.
China Food Industry Analyst Zhu Danpeng believes that as consumers' demands for health and low fat increase, the plant-based beverage market is gradually expanding. Although China has well-known brands in the plant-based beverage field such as Chengde Lulu and Vivi, they have not achieved breakthroughs. With the entry of large enterprises, the market may see explosive growth.
**Currently, Coca-Cola, Uni-President, and other brands are optimistic about this market, and their channels and target audiences are similar. A battle for plant-based beverages is about to unfold in the future.**
**-02-
**Keyword 2: The Rise of Sparkling Water**
**In recent years, the popularity of sparkling water has also increased significantly.** According to data from the U.S. market research company Beverage Marketing, bottled sparkling water grew by 26% to 531 gallons in 2018. Even though this category only accounts for a small portion of the bottled water market, sparkling water is growing much faster than still water, which grew only 4.2% last year.
Nestlé launched strawberry and watermelon flavors of Perrier in 2019. Nestlé stated that it will increase investment in the sparkling water sector, investing 200 million euros to add three Perrier production lines in France, with plans to increase production by more than 40% by 2020, supplying local and export markets. Phillip Chilton, Nestlé's International Brand Business Director, said in an interview that Nestlé China is trying to combine sparkling water products with the lifestyle and aesthetic tastes of the middle class.
For example, Perrier often collaborates with events in music, art, fashion, and technology.
In addition, Coca-Cola has announced plans to launch a sparkling water beverage under the brand name "AHA" in the U.S., with potential global expansion in the future. It is reported that AHA will come in eight flavors, two of which (citrus + green tea and black cherry + coffee) will contain caffeine. AHA will be sold in cans rather than bottles.
Coca-Cola's Vice President Celina Li said in a statement, "As the largest and fastest-growing part of the water business, mainstream flavored sparkling water is a segment we must double down on. AHA is our big bet in this big-bet category."
Economist Song Qinghui analyzed that **sparkling water is highly compatible and can be mixed with other beverages, such as juice, alcoholic drinks, coffee, and even coconut water, offering more possibilities.** The popularity of sparkling water is attributed to Gen Z and millennial consumers who prefer high-quality beverages with a "cool" brand aesthetic and relatively low sugar content.
Experts at Flavorman predict, "The global craze for soda and sparkling water is just beginning. As consumers continue to prioritize taste over sweetness, 'better-for-you' beverages emphasizing bright and fresh flavors will take center stage in 2020."
**-03-
**Keyword 3: The Long Battle for Sugar Reduction**
**As the "sugar reduction trend" sweeps the entire beverage market, sugar-free and low-sugar beverages have become the mainstream of consumption.** A Nielsen report shows that nearly 80% of Chinese consumers pay attention to the ingredients in food and beverages, especially the sugar content in beverages. In 2019, a study published in the top international medical journal *Circulation*, which followed 118,000 Americans for 34 years, showed that the more sugary drinks consumed, the greater the risk of premature death.
For public health, countries around the world have racked their brains on taxation, and more and more countries are using legal policies to help people consume less sugar. Currently, 28 countries and 33 U.S. states have imposed "sugar taxes." For example, in 2018, the UK government stated that all soft drinks produced locally and imported would be taxed in two tiers: those with more than 5g of sugar per 100ml and those with more than 8g, with a maximum tax rate of 20%.
**In countries that have not yet imposed sugar taxes, beverage companies are not sitting idly by.** Many companies are also actively reducing sugar, hoping to minimize the impact of future "sugar taxes" on themselves.
For example, in Singapore, where a tax has been proposed, manufacturers such as Coca-Cola, PepsiCo, and Nestlé have jointly announced that they will reduce the sugar content of all their products to below 12% by 2020 to prevent the policy from being enacted. Although China has not yet proposed a tax, the beverage industry has already anticipated this and begun to "prepare for a rainy day."
In a letter previously sent to the China Beverage Industry Association, Master Kong stated that domestic enterprises should "actively and diligently make early efforts to avoid passivity when the policy arrives." In the letter, Master Kong also explicitly suggested that domestic beverage companies "set the sugar usage per ton of product below 6% by 2020," and explained that "setting such a goal can also avoid the issue of sugar tax collection being put on the agenda."
Industry insiders say that as the concept of "big health" has become a mainstream health trend in recent years, consumers' preference for high-sugar, high-calorie beverages continues to decline, and companies' actions to reduce sugar are becoming increasingly evident.
A report released by Zhiyan Consulting in August 2019, titled "Analysis of Development Trends and Investment Prospects of China's Beverage Retail Industry 2018-2024," pointed out that consumers' preference for high-sugar, high-calorie beverages continues to decline, and health, personalization, and functionality are the mainstream demands of the future beverage market.
**Reporter's Note:**
**The beverage industry is an industry that is "never out of style."** So far, the soft drink industry has experienced five waves, corresponding to carbonated drinks, bottled drinking water, tea drinks, fruit juice drinks, and functional drinks. After each wave, the product categories and scale have rapidly increased: Coca-Cola has become a phenomenal super single product worth hundreds of billions; Wahaha and Nongfu Spring both have single products exceeding ten billion yuan. In the future, the plant protein field may bring new possibilities to the industry.
In the future, the battle for supremacy in the beverage industry will not cease. Companies must truly clarify their strategic positions and corporate moats, and continuously strengthen their hard skills in innovation, channels, and products, in order to have a chance to win in the battlefield.
Source: Beijing Business Today


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## Citation metadata

- Publisher: New Distribution
- Author: 王晓
- Published: 2020-03-11
- Canonical: https://xinjignxiao.com/en/articles/the-beverage-industry-is-never-out-of-style-and-the-battle-for-supremacy-4969ad87/
- Original source: https://mp.weixin.qq.com/s/S9eWx3CLNITUukL8tMCA2g

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