Rising Demand for Fruit-based Fizzy Drinks, Tea, and Coffee Drives Nonalcoholic Drinks Market

Non-Alcoholic DrinksNonalcoholic drinks are beverages that contain less than 0.5% alcohol by volume. While popular beverages such as coffee, tea, and fruit juices count as nonalcoholic drinks, nonalcoholic varieties of alcoholic drinks such as beer and wine are also considered among nonalcoholic drinks. The demand for nonalcoholic drinks has grown smoothly over the last few decades, as the adverse effects of alcohol consumption have become progressively clearer and uncontestable. The rising health awareness among the global population is thus a key driver for the global nonalcoholic drinks market.

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According to Transparency Market Research, the global nonalcoholic drinks market was valued at US$1,435.2 bn in 2013. Exhibiting a 4.30% CAGR between 2014 and 2020, the market is expected to rise to a valuation of US$1,937.7 bn. By volume, the market is expected to exhibit an even higher 4.90% CAGR in the same timeframe, with the total volume of the market expected to rise to 1,289 bn liters from 912.7 bn liters in 2013. This illustrates both the growing demand for nonalcoholic beverages and the expected price wars in the market for the same.

What is the key driver for the global nonalcoholic drinks market?

The growing awareness about the health benefits of nonalcoholic drinks is the prime driver for the nonalcoholic drinks market in developed regions. A study conducted in 2015 showed that the consumption of soda in the U.S., one of the largest markets for aerated drinks, had fallen to a 30-year low due to the steadily growing health awareness among the population.

Furthermore, 2016 is set to be the first year in which the sales of bottled water in the U.S. are expected to outstrip sales of soda-based drinks. While concerns about water contamination have played their part, it is becoming clear that consumers are not only moving away from alcoholic drinks, but also making the healthier choice when it comes to nonalcoholic drinks.

The growing demand for coffee and tea is another key driver for the global nonalcoholic drinks market. Coffee and tea have several health benefits, due to which the traditional consumption of both across the world is being supplemented by new drinkers. The ease of selling prepackaged ready-to-drink coffee and tea has made them easily available across the world, further boosting the growth prospects of the global nonalcoholic drinks market. The segment of tea and coffee is expected to exhibit a higher CAGR than any other product segment of the market in the 2014-2020 forecast period.

How is the nonalcoholic drinks market performing in emerging regions?

In emerging regions, the growing demand for fizzy fruit-based drinks is an influential factor likely to shape the trajectory of the nonalcoholic drinks market in the coming years. While the demand for aerated drinks is steadily dropping in developed countries, the market for the same is still in its growth phase in emerging economies. As a result, the demand for soda-based drinks is still growing in regions such as Asia Pacific and Latin America. In the hugely promising India market, for instance, both PepsiCo and Coca Cola are expected to launch new fruit-based aerated drinks in the coming years, leading to improved growth prospects for the nonalcoholic drinks market.

While North America is the leading contributor to the global nonalcoholic drinks market at present, the booming demand for aerated drinks and tea/coffee is expected to make Asia Pacific the key contributor in the coming years.