COVID-19 Impact on the European Soft Drinks Industry

• Across Western Europe and the U.S, there is a high demand for typical household drinks such as soft drinks and other beverage choices as people hoard these items while on self-quarantine inside their homes.
• Due to the high demand, beverage retailers are finding it hard to meet the needed supply in both their physical and online stores. The soft drinks manufacturers are enjoying their logistical edge in this case as most of them employ a "direct-store-delivery (DSD) distribution model."
• The soft drinks industry comprises 20-60% of the total consumption in Western Europe. It also has the most share of the market's revenue.
• However, the forced closure of dining establishments and the reduction in traffic in various transit points of sale are expected to bring down the sales figures.
• Furthermore, the current stockpiling behaviors for these staples are seen only as a short-term trend. In the long run, consumers are expected to opt for healthier beverage choices that can boost their immune system.
• Consumers will also contribute to the rise of the grocery e-commerce channel for the food and beverage sector.
• As the pandemic continues to wreak havoc into the economy, the industry is advised to prepare for a more value-focused market. The market will more likely trun to private label alternatives, discounter conduits, and multipack formats.