Beverages, from water to carbonated soft drinks, have a large but diverse market in Latin America. The drink panorama in Mexico, Chile and Argentina captures different behaviors and to help you understand them, we share statistics and other data of interest.
Mexico: care on the rise
Value the Mexican soft drink market is about 15.5 billion dollars. After the United States, it is the second country with the highest consumption of soft drinks per capita in the world, with 150 liters per year. Mexicans consume 300 million cases of soda a year. Each family spends at least 7,000 pesos a year on sodas. Of these 300 million boxes, only about 10% are low-calorie products.
The main point of sale of the soft drink in Mexico is the small store, which represents 75% of the marketing of this drink. 24% is sold in restaurants, clubs, discotheques and hotels. Only 1% is sold in supermarkets.
However, the consumption of soft drinks in Mexico has stagnated and recorded growth rates of 2% to 3% per year. In contrast, healthy drinks, such as water in all varieties (tea, juices, energy drinks, soy, etc.), are growing at double-digit rates. This transition is the result of a change in the habits of consumers who are increasingly concerned about eating healthier products.
The change of this trend is in the initial stage, since it is national consumer preferences for healthier liquids have not yet caused an accelerated migration of carbonated drink consumers to non-carbonated drinks.
The reduction in sugar consumption in soft drinks such as water and juice is expected to increase as more people worry about their weight or are diagnosed with diabetes. New health and wellness trends are the main reason why consumers have started to reduce their consumption of carbonates, especially in the flavor sectors.
Currently, these soft drinks are not the best, as they compete with flavored bottled waters, fruit or vegetable juices, teas, etc. Soft drinks contain an average of 22 mg carbohydrates; and flavored bottled water, 8 to 10 mg.
On the other hand, campaigns for health and well-being by bottled water producers expected to continue. Nestlé plans to invest more in advertising within its Santa María and Nestlé Pureza Vital brands. Danone also succeeded with Bonafont Levité, and Coca-Cola with its Ciel brand, both of which had good rebound and growth.
The figures support the high level of obesity that Mexico is recording, and the refusal to change habits favors research and development around functional foods and beverages. People are increasingly trying to include healthy substances in food and drinks. 70% of soft drink consumption in Mexico refers to soft drinks, while the remaining 30% is to those considered healthy.
High-income consumers are expected to adopt health and wellness trends more quickly. This type of consumer is more concerned about their health and is well informed, which is why they can have more information about problems with obesity and long-term consequences. It is important to note that wealthier consumers have easier access to healthier products, since they are usually more expensive than most of the alternatives we find on the market.
- Water and energy drinks
Regarding water, the Mexican market represents the second largest market in the world, with a volume of more than 8000 million dollars per year and a growth of 30% per year. What used to be a simple element on every table is now beginning to be considered a product of haute cuisine.
Considering energy drinksIf we count only last year’s sales, we arrive at a figure of around 60 million cans of energy drinks consumed. Red Bull is the leading brand in the country, followed by Boost, the Casa Cuervo energy drink.
Chile: sustainable growth
During the first three quarters of 2008 beverage industry had strong growth. But there was a significant slowdown in the fourth quarter. Below are some figures showing the situation in 2008:
- 1.773 million liters of soft drinks were sold, which represents a growth of 3.7%.
- 213 million liters of water were sold. The growth was 11.5 percent.
- 159 million liters of juices and nectars were sold. The growth was 9.7 percent.
- 7.2 million liters of sports drinks were sold. Growth was 35.8 percent.
- Causes of growth in 2008
In Chile, an increase in consumption was recorded, accompanied by a decrease in relative prices refreshing drinks and by changing habits. In addition, new socioeconomic segments are included in the consumption of soft drinks. The growth of the beverage industry is partly explained by the growth of demand (wage income, personal consumption and personal consumption of non-durable goods). It is worth noting that the price increases of beverages in 2008 (9.2%) were lower than the food basket index (16.1%).
As for changes in consumption habits, people have adopted a lifestyle that combines a balanced diet with greater physical activity. According to Nielsen, the Light-Diet segment (12 food categories; beverages and dairy products) has increased in importance in terms of volume and value over the past four years. Quantitatively, the share of the Light-Diet segment grows from 13.4% in 2005 to 19.1% in 2008. In terms of value, it increases from 15.2% in 2005 to 21.0% in 2008.
Participation soda without calories in the overall increase from 9.7% in 2006-07 to 13.1% in 2008. Meanwhile, the share of Light juices and nectars in the overall increase from 9.8% in 2006-07 to 12.0% in 2008.
Related to these changes, the products experienced a significant increase in demand in 2008: increased consumption of water (11.5%), juices and nectars (9.7%), sports drinks (35.8%) and tea (62, 1% between May and December 2008).
- Development of the juice and nectar market
- Innovation: the introduction of new products and the expansion of the range of flavors continue.
- Consumers’ willingness to try new flavors is increasing due to rising incomes and changes in consumer habits.
- Creation of new attractive formats, new opportunities and consumer habits. For example: breakfast and snacks.
- High product quality thanks to investment in innovation.
- Media investments.
- Future potential:
- Low per capita.
- Development of functional juices, which fulfill an additional function for health (with vitamins, enriched and antioxidants).
- Inclusion of new socioeconomic segments due to increase in income and change in consumer habits.
- Development of new flavors and more sophisticated products that provide nutrition (vitamins and minerals), energy, hydration and well-being in a rich and practical way.
- Water market development
During 2008, waters experienced a strong growth of 11.5%. Average annual growth for the period 2005/08. it was 12.5%. They experienced the development of three markets: mineral water, purified water and Flavored water.
Furthermore, penetration increased in the high and middle socioeconomic segments (C2) and remained the same in the middle (C3) and low segments. In terms of innovation, the functionality of water increases and a new concept of this drink with properties is born. In this way, a virtuous circle takes place: new lifestyles (Wellness movement) and the industry’s ability to respond and deepen this new demand.
Argentina: soft drinks and soft drinks at the right level
Each Argentine drinks 52 liters of Coca-Cola per year (46 traditional versions and another 6 light variants), which ranks the country among the 10 with the highest consumption per capita in the world. Coca-Cola is the favorite soft drink, according to the iEco Brand Ranking, conducted by I+E (Clarín) and reviewed by Deloitte. This category includes mineral waterflavored, energizing, sports and prepared juices or for preparation, as well as soft drinks.
Coca-Cola is at the top of the measurement with 128 points. In second place is Gator (bottled by Pepsi), with 114. The next step on the podium is 7 Up (also from Pepsi globally, with the exception of the United States). Villa del Sur (from Danone) with 107.4 points takes fourth place, very close to Ser (also from the French company) with 107.2 points.
Sprite (from the Coca-Cola system) reached 101 points and was above the average rating (100). The dynamics of the category in recent times has been marked by the appearance of new terms related to health and energy. Terms such as flavored or finely carbonated water, 0% sugar, rich in minerals, with natural and energizing ingredients have flooded the discourse.
Although the growth of flavored waters is greater than that of soft drinks, the latter still control 60% of soft drinks (waters represent 18%). Among soft drinks, colas account for the majority: 53% of sales. Lemon-lime ones have 24%, and orange 12%, and the rest is for other flavors (11%).
Coca Cola is the top-of-mind leader, with 44% spontaneous responses when people are asked about soft drinks. If you include those who mention it, but not as the first answer, it comes to 80%. This indicates that this is the composure icon in the category. “The heart of the brand is about connection, trying to convey optimism. We live in reality, we are not unaware of what is happening, but we always try to convey a positive message,” explained Luis Gerardin, Coca-Cola marketing director for the South Latin business unit.
Pepsi is the second most mentioned (4% as top of mind and 29% with other mentions, giving a total of 33%), but it is ninth (91 points) when asked about the attributes it considers. people when they think about a brand. In this category, trust affects 30%, while familiarity and personality weigh 24% each. Strength explains 22% of the estimate.
In the classic Coke vs. Pepsi duel, it is estimated that one of its rivals is shipped for every four bottles of Coke.
In the ranking of brands, in front of Pepsi – whose local system is under the umbrella of Cervecería Quilmes – come Fanta (99 points, from the Coca system) and Clight (from Mondelez). In tenth place is Tang, another powdered juice brand belonging to the same owner.
Gabriela González de Villa and Marcela Vincenti