Soft Drinks - Sri Lanka

The Soft Drinks market in Sri Lanka has been experiencing significant growth in recent years. Customer preferences have shifted towards healthier beverage options, leading to an increase in demand for low-sugar and natural drinks. Additionally, the growing urban population and rising disposable incomes have contributed to the expansion of the market.

Customer preferences: In Sri Lanka, customers are increasingly seeking healthier alternatives to sugary soft drinks. This trend is driven by a growing awareness of the negative health effects of excessive sugar consumption. As a result, there has been a rise in demand for low-sugar and natural soft drinks, such as fruit juices and herbal beverages. Consumers are also gravitating towards products that offer functional benefits, such as energy drinks and sports drinks.

Trends in the market: One of the key trends in the Soft Drinks market in Sri Lanka is the growing popularity of bottled water. As consumers become more health-conscious, they are opting for bottled water as a healthier alternative to sugary drinks. This trend is further fueled by concerns over the quality of tap water in certain areas of the country. As a result, the bottled water segment has witnessed significant growth in recent years. Another trend in the market is the increasing demand for ready-to-drink tea and coffee. Sri Lanka is known for its tea production, and consumers in the country have a strong preference for tea. However, there has been a shift towards convenience and on-the-go consumption, leading to a rise in the consumption of ready-to-drink tea and coffee. This trend is particularly prominent among younger consumers who value convenience and are seeking new and innovative flavors.

Local special circumstances: Sri Lanka has a tropical climate, which makes soft drinks a popular choice among consumers, especially during the hot and humid summer months. The availability of a wide range of local fruits and herbs also contributes to the popularity of soft drinks in the country. Sri Lankan consumers enjoy traditional drinks made from ingredients such as coconut water, king coconut, and various tropical fruits. These local special circumstances have created a unique market for soft drinks in Sri Lanka.

Underlying macroeconomic factors: The Soft Drinks market in Sri Lanka is also influenced by underlying macroeconomic factors. The country has experienced steady economic growth in recent years, which has led to an increase in disposable incomes. This has resulted in higher consumer spending on non-essential items, including soft drinks. Additionally, the growing urban population and changing lifestyles have contributed to the expansion of the market. As urbanization continues to accelerate, the demand for convenience and on-the-go beverages is expected to increase further.

Data coverage:

The data encompasses B2C enterprises. The at-home market covers retail sales via super- and hypermarkets, eCommerce, convenience stores, or similar sales channels. The out-of-home data encompasses all sales to hotels, restaurants, catering, cafés, bars, and similar hospitality service establishments. Combined numbers encompass both the at-home market and the out-of-home market. Both the at-home and the out-of-home market are valued at retail selling prices including all sales and consumption taxes.

Modeling approach:

Market sizes are determined through a Top-Down approach, building on specific predefined factors for each market segment. As a basis for evaluating markets, we use resources from the Statista platform as well as in-house market research, national statistical offices, international institutions, trade associations, companies, the trade press, and the experience of our analysts. In addition, we use relevant key market indicators and data from country-specific associations, such as GDP, consumer spending (e.g. consumer spending on Non-Alcoholic Drinks, consumer spending at Hotels, Restaurants etc.), and price level index. This data helps us estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the relevant market. For example, the exponential trend smoothing is well suited for forecasting the Non-Alcoholic Drinks market with a projected steady growth. The main drivers are GDP per capita and consumer spending per capita.

Additional notes:

The data is modeled using current exchange rates. The impact of the COVID-19 pandemic and the Russia-Ukraine war are considered at a country-specific level. The market is updated twice a year.