Look Towards A New Future

Mar 17, 2012

Soft Drinks Market in Canada

Demand for soft drinks softens amid growing desire for healthier diet

In the wake of growing concerns over widespread consumption of high-sugar and high-calorie drinks, faltering consumer trust in the safety and quality of these beverages has resulted in the softening of overall retail sales of soft drinks during the review period. In particular, recent studies regarding Canadians’ sugar consumption trends as well as related health risks have raised questions about the quality of beverages that have long been perceived as healthy and nutritious, such as fruit and vegetable juice and RTD tea.

Energy drinks faces new regulatory challenges

In October 2011, Health Canada announced a new set of regulatory measures for caffeinated energy drinks. In the wake of rising caffeine consumption, particularly by adolescents and young adults, and concerns over the potential to exceed the maximum intake levels recommended by Health Canada, the Canadian government has set additional safety requirements to account for the way these beverages are perceived and consumed by consumers. Under the new regulation, manufacturers are required to limit caffeine content to no more than 400g per litre, or 180g per single-serve container. They are also obliged to provide food labelling, which includes ingredients, allergens and nutrition facts as well as caffeine level, and a warning statement advising not to mix with alcohol.

Canada Soft Drinks Market

Published: March 2012
Price: Single User License: US$ 1900        

Health Canada’s approval of plant sterols fuel competition in juice

Following Health Canada’s decision to add plant sterols (phytosterols) to its tightly regulated list of approved food health claims in May 2010, manufacturers of fruit and vegetable juices seized upon their newly found opportunities for growth, in a market that is constantly challenged by the need for innovation. For example, A. Lassonde Inc expanded its line of Oasis juice by introducing Oasis Healthbreak CholestPrevent, followed by Coca-Cola Canada’s launch of Minute Maid Heart Wise; both of which are now fortified with plant sterols.

Grocery retailers continues to lead soft drinks market

Canadian grocers maintained their low prices throughout most of 2011, although discounts and promotions were less frequent than in the previous year. While in 2010, major grocery outlets engaged in aggressive pricing and promotional activities in their effort to attract consumers, competition was less fierce during the review period as leading players began to concede to the pressure of rising commodity costs. Soaring costs of sugar and oil have raised the manufacturer selling price (msp), which increased pressure on retailers to raise their prices as well. Nonetheless, with Wal-Mart Canada’s Rollback price reductions and strong Canadian dollar that favoured imported goods, leading grocers were able to continue offering affordable prices to their consumers.

Growth in soft drinks projected to slow down over forecast period

Soft drinks will continue to grow in most categories over the forecast period. Positive economic outlook, coupled with on-going innovation in the industry, will likely sustain demand for soft drinks. Increase in real GDP, employment gains, and rising disposable income will contribute to stronger consumer confidence, encouraging them to not only increase their beverage consumption, but also to diversify selection by, for example, trying new products that are launched on the market. Furthermore, Canada’s recent announcement to eliminate tariffs in the food processing industry is expected to lower the price of a number of soft drinks sold through Canadian retailers.