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After the tumultuous year that was, we should expect to see exciting NPD via flavour, pack architecture and functionality, given that innovation is, after all, one of the foundations of the beverage category. CSD overview The carbonated soft drinks category delivered strong growth during the pandemic, as changed consumer routines shifted the majority of meal and drink occasions to the home and consumers sought comfort and familiarity. Health concerns will continue to present challenges in a highly competitive market with many better-for-you alternatives. Despite the strong performance, this top category will need to keep innovating as all other segments gradually eat away at its share through innovation via health, formats and functionality. Category fact: 52.1 per cent of soft drinks are sold in supermarkets. Water 2020 produced relatively strong sales of bottled water and further solidified its status as a necessary staple product of consumers. However, the loss of key social occasions weighed down the market, and while consumers have continually purchased the category, it remains vulnerable to losses driven by shoppers’ interest in sustainability and the avoidance of single-use plastic. Sparkling water, in contrast, is poised for continued stronger growth as interest in health and wellness results in the trading of sugary drinks for sparkling water. Fundamentally, it’s easier for health-conscious and/or environmentally conscious consumers to replace still water by refilling, but less so for sparkling. Energy The energy drinks market has enjoyed consistent year-over-year growth because these beverages offer a simple, easy-to-understand value proposition and benefit. Energy drinks are a tasty, convenient source of energy. The market hasn’t been immune to the impacts of Covid-19. However, the impacts have been temporary and specific to performance in the convenience channel. Nevertheless, like the channel, the category has recovered quickly and overall is still delivering some of the strongest growth in beverages. Category fact: A 250ml serving of energy drink contains 80mg of caffeine – about the same as a cup of instant coffee (with one teaspoon). Milk beverages The milk beverage market comprises two distinct groups, dairy and non-dairy, with dairy being dominant in terms of market share despite the ongoing innovation in non-dairy alternatives. However, non-dairy has not been able to grow its value and has seen a steep decline. This is despite the innovation leveraging eco-friendly and alternative ingredient sources. THE BEVERAGE GUIDE Water category value: $308m Value growth: 8.2%% Share of total bev: 4.9% Sparkling water value: $97m Value growth: 2.8% Share of total bev: 1.5% Still water value: $210m Value growth: 10.9% Share of total bev: 3.3% Energy drinks category value: $139m Value growth: 19% Share of total bev: 1.1% Category fact: About four in 10 of us don’t drink enough water each day. Sports drinks As Australians continue to be engaged with health and fitness, which has been accelerated by the pandemic, the sports drink category will see a corresponding increase. After months of lockdown, people will be glad to be active and socialising through a variety of sport and physical activities. This return to an active lifestyle will be beneficial to the sports drink category. Functional wellness is quickly becoming the next trend in terms of demand. The greatest opportunity will be for companies that can create the most functional benefit while maintaining the cleanest label, sugar being a major concern in this category. Category fact: You can lose up to 2lt of sweat an hour while exercising. CSD category value: $1.2b Value growth: 8.9% Share of total bev: 19% Total milk beverage category value: $318m Value growth: 20.7% Share of total bev: 5% Non-dairy milk beverage value: $15m Value decline: -$7.5 Share of total bev: 0.2% Sports drinks category value: $67m Value growth: 6.1% Share of total bev: 1.1% Category fact: Consuming dairy has a positive effect on bone health, cardiovascular disease, metabolic conditions and some cancers. Coffee The coffee category was a clear winner from lockdown, generating an additional $138 million as consumers were at home trying to replicate cafe coffee. And given significant difference in price compared with barista-made coffee, it was easy for them to trade up to premium at-home products. Even now, TO PAGE 36 JUN, 2021 RETAIL WORLD 35