Carbonated Soft Drinks Market

• Rising demand for sugar-free carbonated beverages

Carbonated beverages are drinks that contain dissolved carbon dioxide in them, along with a natural or artificial sweetener. The dissolved CO2 in soft drinks is the reason for the effervescence in these types of beverages. As consumers are increasingly focusing on health, diet consciousness, and clean food habits resulting in the decreasing sales of high-sugar-based carbonated beverages. However, this has allowed the players to innovate and launch sugar-free carbonated soft drinks.

Because of these many of the established players like PepsiCo, The Coca-Cola Company, Danone, etc., have launched different varieties of zero-sugar and diet-friendly beverages.  For instance, Coca-Cola launched an updated version of Coca-Cola Zero Sugar in the US in August 2021 with the same ingredients without any amount of sugar in it. In addition, the levy of a sugar tax on sweetened beverages in over 50 countries across the globe is encouraging manufacturers to innovate and launch more sugar-free carbonated soft drinks market. Thus, the rising demand for sugar-free carbonated beverages is anticipated to boost the growth of the market.

The Global Carbonated Soft Drinks Market Industry is increasingly influenced by health and wellness trends. As consumers become more health-conscious, there is a growing demand for low-calorie, sugar-free, and functional beverages. This shift prompts manufacturers to innovate and reformulate their products, introducing options that align with healthier lifestyles. For instance, the rise of sparkling water and natural flavor-infused sodas reflects this trend. The market's adaptability to these preferences is crucial, as it is projected to reach 785.4 USD Billion by 2035, with a CAGR of 5.57% from 2025 to 2035, indicating a sustained focus on health-oriented offerings.

Sustainability initiatives are becoming increasingly integral to the Global Carbonated Soft Drinks Market Industry. As environmental concerns gain prominence, consumers are more inclined to support brands that prioritize eco-friendly practices. Companies are adopting sustainable sourcing, reducing plastic usage, and implementing recycling programs to align with consumer values. This commitment to sustainability not only enhances brand reputation but also attracts environmentally conscious consumers. The Global Carbonated Soft Drinks Market Industry is likely to see a positive impact from these initiatives, as they resonate with a growing segment of the market that values sustainability.

Innovative marketing strategies play a pivotal role in shaping the Global Carbonated Soft Drinks Market Industry. Companies are increasingly leveraging digital platforms and social media to engage consumers and create brand loyalty. Campaigns that emphasize unique flavors, sustainability, and lifestyle alignment resonate well with target audiences. For example, collaborations with influencers and interactive advertising enhance brand visibility and consumer connection. This strategic approach not only drives sales but also fosters a deeper relationship between brands and consumers, contributing to the overall growth of the Global Carbonated Soft Drinks Market Industry.

Emerging markets and urbanization significantly impact the Global Carbonated Soft Drinks Market Industry. Rapid urbanization in regions such as Asia-Pacific and Latin America leads to increased disposable incomes and changing consumption patterns. As urban populations expand, the demand for carbonated beverages rises, driven by factors such as accessibility and availability. This trend is particularly evident in countries like India and Brazil, where the market is projected to flourish. The Global Carbonated Soft Drinks Market Industry is poised to benefit from these demographic shifts, further solidifying its growth prospects in the coming years.

The Global Carbonated Soft Drinks Market Industry experiences a notable surge in consumer demand for convenience-oriented products. Busy lifestyles and the increasing prevalence of on-the-go consumption patterns drive this trend. As consumers seek quick refreshment options, manufacturers respond by introducing single-serve packaging and ready-to-drink formats. This shift is reflected in the projected market value of 432.6 USD Billion in 2024, indicating a robust growth trajectory. The convenience factor not only enhances consumer satisfaction but also encourages impulse purchases, thereby contributing to the overall expansion of the Global Carbonated Soft Drinks Market Industry.

By Region, the study segments the market into North America, Europe, Asia-Pacific, and the Rest of the World. North American carbonated soft drinks market accounts for the largest market share of USD 157.63 billion in 2021 and is expected to exhibit a Market CAGR of 4.1% due to the habitual incorporation of carbonated soft drinks in daily drinks. According to the World Population Review statistic, 1 in 5 US citizens drinks at least one soda a day, and similar is the scenario in Mexico, with consumption exhibiting an increasing trend.

However, the sugar tax on high-sugar products in Mexico's carbonated soft drinks market and Canada carbonated soft drink market is expected to hamper the growth of the North American carbonated soft drink market during the forecast period. Further, the US carbonated soft drinks (CSD) Industry has held the largest market share in 2021 and is expected to continue its dominance in the upcoming years, fueled by new innovative product launches like low-calorie cola carbonated drinks, zero-sugar canned water soda, etc.

The major countries studied are the U.S., Canada, Mexico, Germany, France, the UK, Italy, Spain,  China, Japan, India, Australia and New Zealand,  and Brazil.

Figure 3:  CARBONATED SOFT DRINKS MARKET SHARE BY REGION 2023 (%)

Source: Secondary Research, Primary Research, Market Research Future Database, and Analyst Review

Europe’s carbonated soft drinks market accounted for the second-largest market share during the study period. This is majorly attributed to the increasingly innovative marketing strategies for product promotion and brand building by established companies in key countries like Germany,  and the UK, among others. In addition, the increasing preference for immune-boosting carbonated drinks in the UK carbonated soft drink market is expected to create lucrative opportunities for the players in the market. For instance, Gusto launched a couple of vitamin-boosted carbonated soft drinks named Super DC Blood Orange and Super DC Blackcurrant & Elderberry in October 2020.

Initially, the product is made available through different retailers including Holland Barret, Natural trade retailers, and Amazon. Germany carbonated soft drinks (CSD) Industry is the largest market in the region with an average per capita consumption of soft drinks at 336.3 liters in 2019. Also, according to the ITC trade data, the country is the second largest importer of soft drinks including carbonated soft drinks.

The Asia-Pacific carbonated soft drinks market is expected to grow at a CAGR of 7.0% from 2022 to 2030. This is due to increasing per capita disposable income, the growth of middle-income groups in emerging economies like India, and the increasing investment by international brands in key economies of the region. In addition, the climate conditions of the Asia-pacific countries with most of the region experiencing summer and hot climate for a long time during a calendar year drive the growth of carbonated soft drinks. China carbonated soft drinks (CSD) held the largest market share in the Asia-Pacific.

India carbonated soft drinks (CSD)market is the favored destination for market players due to the largest youth and children population with increasing disposable income of the millennial population. Also, the increased out-of-home consumption and usage of social media platforms are creating more opportunities for established players in the forecast period. The most prominent flavor in the region is the lemon flavor, according to a report by Varun Beverages Ltd and it also highlighted the per capita soft drink consumption is increasing since 2016. Hence, Asia-Pacific is expected to register the highest growth rate over the forecast period.

Major market players are spending a lot of money on R&D to increase their product lines, which will help the carbonated soft drinks market grow even more. Market participants are also taking a range of strategic initiatives to grow their worldwide footprint, including new product launches, contractual agreements, mergers and acquisitions, partnerships with local manufacturers in key markets, increased investments, and marketing initiatives to strengthen their presence. Competitors in the carbonated soft drinks industry must offer innovative products that are trending to expand and survive in an increasingly competitive and rising market environment.

One of the primary business strategies adopted by manufacturers in the  carbonated soft drinks industry to benefit clients and expand the carbonated soft drinks market sector is to innovate new carbonated soft drinks in line with the low-sugar, low-calorie, no added preservative, and immunity-boosting drinks trends. Also, the companies are working on strengthening their omnichannel presence in key growth regions.

The Coca-Cola Company (US) is a leading manufacturer of various non-alcoholic beverages including carbonated soft drinks, sports drinks, juices, sparkling water, dairy, and plant-based beverages. The company’s distribution channel includes a multi-approach of including company-owned channels and third-party bottling companies. The company’s long history, strong brand image, and well-established product portfolio in all the key markets are driving the growth of the market. In August 2022, the company launched Dreamworld a part of its creation flavors series in India. The new launch is aimed at young customer acquisition.

PepsiCo, Inc is a  leader in beverages manufacturing and marketing, apart from this the company also manufactures convenient foods. The company has a wide-consumer base situated across 200 countries and has an extensive network of research and development centers across the globe. The operating segments geographical include FLNA (Frito-Lay North America); QFNA (Quaker Foods North America); PBNA (PepsiCo Beverages North America); Latin America; Europe; AMESA (Africa, Middle East, and South Asia) and APAC (Asia Pacific, Australia, and New Zealand and China Region).

In March 2020, the company acquired Rockstar Energy, a leading energy drink provider to strengthen its existing energy drinks segment and further aid to capitalize on the trend of growing preference for healthy drinks options.