In terms of value growth for 2015, the category contribution to the economy increased, where this was driven primarily by an increase in volumes consumed rather than an increase in price. The price increase for the category was lower than headline inflation, though there have been substantial increases in production costs for the category. It remains to be seen how long the producers are able to absorb the input costs before passing these on to the consumer.
The growth in sparkling soft drinks was seen predominantly in wholesale and top-end retail. These sectors have become more competitive given the current economic climate and the resultant reduction in consumer disposable income. There has been increased pressure on consumers to focus on necessities and to rationalise higher-priced luxury items, with sparkling soft drinks facing increasing pressure as a result.
Gauteng is the primary consumer of sparkling soft drinks, this being congruent with population concentration. The second tier of consumption includes KwaZulu-Natal and the Western Cape. The balance of the market saw greater relative growth as producers looked to outlying areas to harness greater market share.
In terms of other key sectors, the devaluation of the Rand translated into a greater focus on exports as local producers sought to extend their share within alternative African markets.
