The global non-alcoholic beverages (NAB) industry was valued at 1.26 trillion USD in 2015. In the next five years, it great at a compound annual growth rate (CAGR) of 6.2% per year to reach 1.6 trillion USD in 2019. Until 2025, the alcohol-free beverage industry is forecast to grow at a CAGR of 5.58% per year and reach 2.18 trillion USD.
The non-alcoholic beverages industry combines the soft drinks, hot drinks, bottled water, and juice industries. In 2019, soft drinks accounted for 43% of the global NAB industry value. Hot drinks, bottled water, and juice followed with shares of 35%, 17%, and 6%, respectively. Dairy drinks are not included in the calculation.
By region, North America held the largest share of the non-alcoholic beverages industry value with 31%. Europe and Northeast Asia followed with shares of 22% and 17%, respectively.
South and Central America and Asia Pacific each accounted for 10% of the NAB industry value in 2019.
Africa, the Middle East, and the CIS countries recorded shares of 5%, 3%, and 2%, respectively.
Non-alcoholic Beverages Market Trends
One of the leading trends in the non-alcoholic beverages market is the surging demand for healthy and sustainable products. High-potential segments include fermented drinks, tea, low sugar beverages, and fortified drinks.
As a result, market players focus on reducing the sugar content of their products. However, strategic portfolio diversification may be necessary for long-term success.
In addition, more people pay attention to product labels and even opt to use smartphone apps to decode a product’s ingredients. Thus, companies must focus on transparency and simplicity on product labels for a better chance at gaining consumer trust.
With the continued growth of the health and wellness trend, the non-alcoholic beverages industry is expected to grow, driven mainly by the development of beverages with functional health benefits.
Moreover, the increasing investments in innovation are expected to lead to more unique beverages, which will align with health-related consumption patterns.
Forced by sugar taxes across many countries, companies are likely to continue to restructure and switch from carbonated soft drinks toward 100% juice drinks, flavored bottled water, fermented drinks, and ready-to-drink (RTD) tea.
Another big driver is the continuing trend towards non- and low-alcohol consumption. As consumers become more conscious of their alcohol intake, market players may benefit from the trend by offering healthy and enhanced drinks with a sophisticated taste.
As a result, spirit-free bars have gained traction among consumers. The trend has its roots in the early 2010s, as an alternative social space for people recovering from addiction and substance abuse. However, since then, and especially in 2019, more people have opted to experience spirit-free bars due to the growing wellness, mixology, and craft drink trends.
Alcohol-free drinks offered in these establishments range from unmixed drinks to originally crafted drinks. Frugal patrons can enjoy Club Mate and Kombucha but the more adventurous ones can try drinks like “The Pear Drop”. The original drink contains pear purée, pear shrub, lime, rosemary, and bitters at a cost similar to a traditional cocktail.
Global Bottled Water Market Size
In 2015, the global bottled water market was valued at 184.84 billion USD. In the next five years, it grew at a CAGR of 9.66% per year to reach 267.29 billion USD. Until 2025, it is forecast to continue growing at a CAGR of 6.52% per year to reach 393.77 billion USD.
Regionally, North America held the largest value share of the industry with 30% in 2019. Northeast Asia and Europe followed with shares of 22% and 20%, respectively.
Asia Pacific ranked fourth with a value share of 10% of the total. South and Central America, Africa, the CIS countries, and the Middle East accounted for 8%, 5%, 4%, and 3%, respectively.
Asia and Pacific registered the highest consumption of bottled water over the past few years. Some of the main reasons include poor public infrastructure and reduced access to safe drinking water. Another factor is the increasing awareness of waterborne diseases such as malaria, typhoid, and others.
On the other hand, North America contains two of the three largest individual bottled water markets, with the United States and Mexico, which accounted for a share of 22.5% of the global bottled water market volume in 2019. In the US, the bottled water market is expanding, driven by consumers health awareness.
Countries from Europe and the Middle East ranked among the leading positions in consumption volume per capita.
Bottled Water Market Trends
The most important innovations within the bottled water market in 2019 were sweetener-free flavored sparkling water and functional water.
The growing consumer health and wellness trend is one of the most prominent drivers that contribute to the expansion of the global bottled water market. The market has significantly grown, outpacing carbonated soft drinks in many countries, including the USA.
In the US, there have been numerous brands entering the segment of flavored water. For example, Hint, a flavored water brand, proved to be innovative enough by capturing the growing demand for both flavored and sugar-free drinks.
The company tapped into the trend by offering a wide range of naturally flavored and sugar-free waters along with energy beverages. In addition, innovative beverages such as sparkling coconut water and vinegar drinks are also considered by consumers as healthier alternatives to traditional carbonated drinks.
Consumers are also increasingly adopting flavored and functional waters such as alkaline, Ph-balanced, protein, and others, due to their additional health benefits.
Alkalizing and flavored options have also promoted growth of the bottled water segment, the largest NAB segment in the UK. Products such as energy waters, sports waters, and juice-infused waters are prominent growth drivers in the industry, owing to their functionality and health claims.
Competitive Landscape of the Non-alcoholic Beverages Industry
The global non-alcoholic beverages industry can be considered fragmented.
More than 7,000 companies operate in the non-alcoholic beverages industry. There are more than 2,000 companies manufacture non-alcoholic beverages solely in the European Union.
Yet, the global industry is dominated by two players – The Coca-Cola Company and PepsiCo, which have held significant shares of the NAB industry over the last few decades. The remainder of the market includes many smaller in scale but still significant manufacturing companies.
To retain their advantage, the two industry leaders actively acquire competing companies in developing regions.
For instance, in the beginning of 2019, The Coca-Cola Company completed the acquisition of the Nigerian Chi, a producer of juice, iced tea, and dairy drinks. As a result, the company can leverage the growth of juices and value-added dairy categories, which rank among the fastest-growing beverage segments in Nigeria and Africa.
Similarly, PepsiCo participated in numerous mergers over the past few years, diversifying its portfolio. In 2018, the global leader acquired Soda Stream, a bottled water company, and Rockstar, an energy drink company, in 2020.
Private label presence in the non-alcoholic beverages industry is notable. That is mainly due to the differentiated offerings ranging from low-cost to premium products.
Despite this, brands have outperformed private labels in the past few years. Some of the reasons include the premiumization of the market, strong marketing and branding, functional offerings, and ingredient traceability. That is especially valid for chilled and NFC juice categories.
Brand Market Shares in the Non-alcoholic Beverages Industry
In the non-alcoholic beverages industry, the most valuable brand in the world is Coca-Cola, which accounted for 68.6 billion USD in 2019. Far behind is Red Bull, which ranked as the second most valuable brand worldwide in the same year with 13.2 billion USD.
Diet Coke and Pepsi ranked in third and fourth place with 12.2 billion USD and 10.8 billion USD, respectively. Closely following were Lipton, Yili, Nespresso, and Nescafe, which were valued at 9.1 billion USD, 8.7 billion USD, 7.4 billion USD, and 7.3 billion USD, respectively.
Among the most valuable global brands for 2019 were also Mengniu, Fanta, Sprite, Tropicana, Monster, Gatorade, and Dr. Pepper, whose brand value ranged between 3.5 billion USD – 6.5 billion USD.
In the United States, leading juice brands in 2019 include Naked Juice, Bolthouse Farms, Tropicana Pure Premium, Simply Orange, Florida's Natural, Minute Maid Premium, Capri Sun, Vita Coco, and Juicy Juice. In China, the Minute Maid still has a significant advantage over its competitors.
However, decreasing sales of juice drinks have been weakening the competitiveness of large market players. In comparison, small manufacturers actively launch 100% juice drinks, thus benefiting from the category’s potential and their high efficiency.
In the Middle East and Africa, local companies such as Aujan Industries and Almarai Co dominate the retail juice segment. In fact, the market share of Coca-Cola has ranked it as the number two player in the region.
