Latin America: The world's next functional beverage hotspot?

Latin America: The world's next functional beverage hotspot?

A new market report by Euromonitor International, finds that two of the four largest soft drink markets in the world are in Latin America.

Americans aren’t the only people who love their soda. According to a new market report by Euromonitor International, two of the four largest soft drink markets in the world are in Latin America. After the United States and China, Mexico ranks third and Brazil ranks fourth on the global consumption scale.

And, while the lingering effects of the economic downturn are expected to continue to slow volume growth in more mature markets, Latin America will displace North America by 2014 as the second-largest soft drinks volume consumption region, after Asia-Pacific.

"Mexico is both the largest and the fastest-growing country in terms of per-capita soft drinks consumption, reflecting strong penetration of fruit-flavored drinks and carbonates for children, and bottled water and carbonates for adults," explained Richard Haffner, beverage industry manager for Euromonitor. "Bottled water in particular takes the place of municipal water sources in many rural areas of Mexico, where it is delivered to homes and shared among communities."

While carbonated drinks are not typically equated with health, fruit and vegetable juices are among the biggest growth drivers in the region. "Latin America has a dynamic soft drinks category with tremendous future growth potential," Haffner said. "Due to favorable demographics and macro economic conditions, the region will become increasingly important to global soft drinks consumption. Between 2009 and 2014, total soft drinks volume is projected to grow by 25 percent, led by bottled water, concentrates, carbonates and fruit/vegetable juice. The value of total soft drinks sales is projected to increase at an even faster 27 percent driven largely by the relatively high value added of carbonates and fruit/vegetable juice."

Noncola carbonates was the only category to show a slight volume sales decline in 2009 in Latin America due to the lingering effects of the global economic downturn. Fruit/vegetable juices, particularly cheaper lower juice content varieties like fruit-flavored drinks (with no fruit juice content) and juice drinks (with 1-24 percent juice content), saw some of the strongest gains as consumers looked to reign in spending, said the report "Soft Drink Opportunities in Latin America."

"Such juices are popular with a younger demographic that also promises to drive a large portion of spending in the years to come," Haffner said. "This creates an opportunity for newer drinks such as RTD tea, RTD coffee and energy drinks that do not yet have great market penetration. A more detailed approach from manufacturers targeting different market segments will be needed, both in Mexico and Brazil, and in second-tier markets like Chile and Venezuela."

Hide comments


  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.