In 2012, the total output volume of China's soft drink market reached 130.2401 million tons, increasing by 10.73% Year-on-Year. From 2000 to 2012, the output volume of the Chinese soft drink industry increased by seven times, with a compound annual growth rate (CAGR) of 20.7%, which is far higher than the growth rate of GDP, presenting a well development competence.
In China, soft drinks refer to those natural or artificial beverages with the alcohol content less than 0.5% in the total volume. Small amounts of alcohol may be contained in a soft drink, but such alcohol is the ethyl alcohol which is used in dissolving essences, flavourings and pigments, or the by- products of lactic acid beverages.
Health-orientated soft drinks such as RTD tea, fruit/vegetable juice and bottled water continued their dynamic development in 2012, whereas soft drinks with a less healthy image, such as carbonates, witnessed stagnant growth in China.
Through 2012, lots of existing soft drinks faced the situation that their products were not that attractive after a long-term development in the market, because their brand images were out of fashion and their tastes were not that attractive.
Supermarkets and hypermarkets are on a major expansion drive, which has led to an increase in soft drinks volume sales. Although supermarkets and hypermarkets have higher entrance expenses than other off-trade channels, most soft drinks players are willing to put their products on sale there due to their wide consumer base.
Besides, in most developed cities in China, supermarkets and hypermarkets have seen robust growth. However, independent small grocers continue to play a significant role as distributors for basic food and drinks, especially in places like rural areas that have no major department stores, supermarkets or hypermarkets.
In recent years, functional drinks have become the highlight of China's soft drink market. It indicates that the market has been established after a period of market development. At present, China's functional drinks mainly include sport drinks (with Mizone and Gatorade as representatives), energy drinks (with Red Bull and Lipovitan as representatives), and vegetable protein drinks (with Jiaduobao and Wong Lo Kat as representatives).
For more information on the Chinese soft drinks market, see the latest research: Chinese Soft Drinks Market
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