Soft drink consumption

IBISWorld forecasts soft drink consumption to dip by 1.5% during 2023-24 to 67.2 litres per capita. Rising health consciousness and a shift in food consumption habits have been everpresent drivers of soft drink consumption dynamics. Soft drinks are known to contain large amounts of sugar, which can contribute to obesity, diabetes, dental and other health problems. Furthermore, soft drinks are often considered a discretionary beverage or a beverage to consume at parties. Consumers are looking to save money as inflationary pressures hit their hip pockets, opting for free water over purchasing soft drinks.

During the COVID-19 pandemic, Australian consumers switched to more nutritious food and beverages to toughen their immune systems. Fewer people are looking towards soft drinks despite a rising level of obesity across the population. Additionally, the ABS Household Impacts of COVID-19 Survey, 24-29 June 2020, found a 19% drop in the consumption of soft drinks, cordials or energy drinks during pandemic lockdowns.

Climbing health consciousness has been a noticeable factor contributing to the long-term drop of soft drink consumption. Due to the rising awareness of health issues, consumers are switching to other healthier alternatives with fewer negative health effects, like flavoured sparkling water, soda water and Kombucha. To counter this, soft drink manufacturers have stepped up their marketing of low- and zero-sugar products, most recently with the launch of Coca-Cola No Sugar and Pepsi Max Raspberry, despite dietary research pushing back against their health claims. In June 2018, the Australian Beverages Council Limited announced a sugar reduction pledge that will lead to a 20% reduction in sugar for non-alcoholic beverages in Australia by 2025. Soft drink manufacturers, including Coca-Cola Europacific Partners Australia, Coca-Cola South Pacific, Asahi Beverages and PepsiCo Australia, have signed the sugar reduction pledge.

Low sugar versions of soft drinks, through using an artificial sweetener instead of sugar, have gained market share in the soft drinks segment due to these health concerns associated with sugar consumption, including obesity and diabetes. Overall, IBISWorld forecasts soft drink consumption to decrease at a compound annual rate of 1.5% over the five years through 2023-24.