OPINIO
Trade4go
Aug 29th, 2024
Original content
Asia's carbonated soft drinks (CSD) market has been growing consistently over the past few years, fueled by urbanization, changing consumer preferences, and increased disposable income. From 2018 to 2023, the market expanded from USD 45.6 billion to USD 64.7 billion, reflecting a steady demand for these beverages. Despite stagnating in 2020 due to pandemic-related disruptions, the market quickly rebounded in 2021 and beyond. The market is projected to reach USD 69.6 billion in 2024, with a 2024 pricing per liter (L) of USD 1.53. The market is expected to reach USD 89.8 billion by 2028 with a value of USD 1.75/L, representing a compound annual growth rate (CAGR) in revenue of approximately 5.9% from 2023 to 2028.
Figure 1. CSD Market Revenue in Asia Forecast
The CSD market has been steadily growing in terms of revenue and volume. From 38.4 billion L in 2018, the market expanded to 43.9 billion L by 2023. This growth reflects the rising consumer demand for various carbonated beverages across the region. By 2024, the market volume is expected to reach 45.4 billion L, with further expansion forecasted to 51.3 billion L by 2028. This volume growth highlights increasing consumption in both established and emerging markets.
Figure 2. CSD Market Volume in Asia Forecast
Several key trends are driving the growth of the CSD market in Asia:
As consumers become more health-conscious, demand for low-sugar, zero-calorie, and functional carbonated beverages (CSDs) is rising. Brands are responding by introducing CSDs fortified with vitamins, minerals, and natural sweeteners like stevia, especially in markets like Japan, South Korea, and China. For example, Coca-Cola Plus in Japan offers a fiber-infused option to promote digestive health, while Pepsi Black in China caters to the growing appetite for sugar-free beverages.
Figure 3. Healthy CSD Example
Consumers in Asia are showing a preference for unique, locally inspired flavors. This trend is seen in flavors such as lychee, yuzu, and herbal blends, catering to regional tastes and creating a competitive edge for local brands in markets like India, Thailand, and Indonesia. Notable examples include Fanta Lychee in Thailand and Malaysia, which taps into the local love for tropical fruits, and Pepsi Salty Watermelon in Japan, which combines the refreshing taste of watermelon with a hint of salt, catering to Japanese taste preferences for unique and balanced flavors.
Figure 4. Flavor Innovation in Asia CSD Example
The growing middle class and urbanization are fueling demand for premium CSD options. Younger consumers seek products with high-quality ingredients and exotic flavors, especially in countries like Taiwan, South Korea, and Singapore. Genki Forest in China exemplifies this with their premium sparkling drinks featuring flavors like white peach and oolong tea. At the same time, Suntory’s Premium Morning Tea in Japan combines carbonation with tea, offering a unique beverage for more discerning consumers.
Figure 4. Premiumization CSD in Asia Example
With rising environmental concerns, consumers are increasingly choosing brands with sustainable practices. Companies are adopting recyclable packaging and eco-friendly production methods, particularly in markets with strong sustainability policies, like Japan and South Korea. Suntory in Japan is leading the charge, aiming for 100% sustainable packaging by 2030 by reducing plastic use. Coca-Cola Vietnam has introduced fully recyclable bottles to reduce plastic waste in the region.
Figure 5. Sustainability and Eco-Friendly Packaging Innitiative in CSD Example
Local and regional brands are growing in prominence, offering competitively priced alternatives to international giants. Markets like Vietnam, India, and the Philippines have seen increased demand for these local products, often perceived as better suited to regional tastes and budgets. For instance, Bovonto in India, a famous local brand, offers a distinctive, spicy flavor that resonates with regional preferences. At the same time, Big Cola in Indonesia has gained popularity by providing affordable and locally-inspired CSD options.
Figure 6. Asian Brand CSD Example
Holding a 70% market share, Coca-Cola dominates the Asian CSD market, reflecting its widespread appeal and strong brand presence across the region. Following Coca-Cola, Sprite captures 8% of the market, driven by its refreshing lime-lemon flavor that resonates with many Asian consumers. Known for its diverse range of fruit-flavored sodas, which are particularly popular in countries like Thailand and India, Fanta holds the third spot with a 5% market share.. 7UP follows closely with 4%, maintaining a solid market share. Pepsi rounds out the top five with 3%, leveraging its global brand recognition but trailing behind its primary competitor, Coca-Cola.
Beyond the top five, brands like Appy and private labels each account for 2% of the market, offering regionalized flavors and cost-competitive alternatives. Smaller players such as B-Cola, Freez, Mirinda, QuAtro, and Schweppes each hold a 1% share, along with other miscellaneous brands, showcasing the diversity of options available. However, their influence remains limited compared to that of market leaders.
Figure 7. Top Industry Brands in 2024
Despite the dominance of well-established brands in the Asian CSD market, there remains significant potential for emerging brands and smaller players. These newer entrants are tapping into consumer demand for unique flavors, affordable alternatives, and regional preferences. As consumer tastes diversify and market dynamics evolve, smaller brands find opportunities to carve out niche segments, introducing innovative products that cater to local trends. This growing presence of more minor players reflects the ongoing shifts in the competitive landscape, even amidst the stronghold of global giants.
Emerging CSD brands should capitalize on evolving consumer preferences by introducing health-conscious alternatives and innovative local flavors. Producers can differentiate themselves by offering unique products like functional beverages, low-sugar options, or flavors inspired by local fruits and herbs, which resonate with regional consumers. By emphasizing premiumization, sustainability, and customization, newer brands can tap into the growing demand for high-quality ingredients and eco-friendly packaging, positioning themselves competitively in the Asian market.
In addition, importers should leverage the opportunity to bring innovative CSD products to markets with similar tastes. For instance, flavors or products that perform well in one Asian market, such as lychee or yuzu-based CSDs, could be imported into regions with parallel cultural preferences, like importing Japanese-inspired beverages into Southeast Asia. Additionally, low-calorie and functional beverages that have proven successful in health-conscious markets can be imported to regions beginning to embrace similar trends.
Exporters should capitalize on the globalization of tastes and the rising interest in exotic flavors and premium products outside Asia. Asian CSD producers can explore export opportunities by introducing locally inspired beverages to global markets, with a growing curiosity for novel flavors like lychee, matcha, and herbal infusions. North America (particularly the US and Canada) and Europe (such as Germany, the UK, and France) offer promising opportunities due to their evolving consumer preferences for exotic, health-conscious products. Australia and New Zealand are ideal targets, given their focus on premium and innovative beverages. Furthermore, with sustainability becoming a global priority, producers adopting eco-friendly packaging will find a competitive edge in international markets increasingly prioritizing environmental responsibility, including regions like Western Europe.
Producers, importers, and exporters should focus on sustainability and regional adaptability. Investing in eco-friendly packaging solutions and understanding local consumer preferences will drive future growth. Additionally, leveraging digital platforms to engage directly with younger consumers, who prioritize health, innovation, and sustainability, will help solidify market presence in an evolving landscape. By strategically embracing innovation, sustainability, and regional preferences, stakeholders in the Asian CSD market can effectively position themselves for long-term growth and success in domestic and international markets.
Read more relevant content
Trade4goApr 4th, 2025Recommended suppliers for you
What to read next
