Looking at the soft drinks industry in South Africa using the Q2 2023 to Q1 2024 data from the Market Research Foundation’s Marketing All Product Survey (MAPS) shows that 24.8 mil (57.1%) of the South African adult population consume soft drinks within one week. When one looks at the number of soft drink units consumed (bottles, glasses or cans) at the provincial level it is not surprising to see that 30.3 mil units were consumed in Gauteng followed by the Western Cape with 14 mil and KwaZulu-Natal with 11.2 mil. This reflects the economic status of these provinces in the country and to a lesser extent the size of their populations.
When examining the units of soft drinks consumed in relation to the population size and Gross Domestic Product (GDP), provinces where the number of soft drink units consumed is lower than that of the population size or GDP potentially reflects below market consumption (eg KwaZulu-Natal & Eastern Cape). Using the MAPS data, it is possible to conduct a deeper analysis to understand the socio-demographic factors contributing to this below-expectation consumption. Conversely, provinces such as Mpumalanga, Limpopo, and North West are showing higher consumption than what their economy would suggest.
Figure 1: Soft drink consumption versus population size and Gross Domestic Product (GDP)
Riding the Waves of South Africa’s Soft Drink Consumption Trends
The pattern of soft drink consumption from the beginning of 2021 to Q1 2024 generally shows a cyclical pattern of increased consumption in the last two quarters of a year. However, in the first two quarters of 2023 consumption of soft drinks was higher than in previous years but then showed a decline in the last two quarters of the year. However, the soft drinks industry bounced back in the Q1 of 2024 and if the cyclical trends of previous years continue, then consumption is likely to exceed expectation in 2024.
Soft drink consumption in South Africa over the last three years has been influenced by economic pressures, changing consumption patterns to healthier options, and competition among brands. The rising cost of living has driven consumers towards more affordable brands, and people towards reduced-sugar beverages. For example, the MAPS data shows that from the beginning of 2021 to the fourth quarter of 2023 consumption of diet soft drinks increased by over 350 000 consumers before falling by 13.6% in Q1 of 2024.
Figure 2: Consumption of soft drinks Q-on-Q between 2021 and Q1 2024.
Coca-Cola’s Dominates the Soft Drink Market Despite Rising Competition
Coca-Cola remains the dominant player in the soft drink industry in Q1 2024 with close to 31.8% of the market share. The peak of its market share in the last three years was in Q3 2022 when the brand had 5.2 mil consumers or 46.5% of the market share. There are no other real contenders to Coca-Cola market dominance with the next closest brand in terms of market share being Stoney with their ginger beer range with 8.5%, Sprite with 7.1% and Fanta with 6.6% – the latter two brands being manufactured by Coca-Cola. Kingsley beverages has shown the best gains in Q1 of 2024 against other competitors with its range of at least 12 brands providing affordable alternatives and a variety of flavours similar to other soft drink companies in South Africa.
Figure 3: Consumption of top soft drinks brands Q-on-Q between 2021 and Q1 2024.
The advantage of the MAPS data is that it can be analysed on a quarterly basis from 2003 to the beginning of 2024. Using Insight VX software it is possible to analyse any aspect of the consumer data associated with the soft drinks industry in South Africa. As an example, looking at Coca-Cola’s best performance in Q3 2022 what distinguishes its consumers from other soft drink manufacturers like Stoney & Kingsley, is its mass appeal across income groups and age groups in metro, urban & rural parts of all provinces with a stronger presence among male consumers.
Geospatial Data Key to Driving Market Strategy and Achieving a Competitive Advantage
Adding a geospatial dimension to the data significantly increases the understanding of the market for soft drink companies. Geographic Information Systems (GIS) have been used to study market segmentation in the soft drink industry across the world, especially in identifying geographic areas at a neighbourhood level with high potential for soft drink sales based on socio-demographic factors like those described above. Mapping the location of a brands existing retail outlets and the locations retail outlets used by competitor brands allows a detailed analysis of the competitive landscape. This information can be used to develop the soft drink retail network and route to market strategies.
Geospatial data optimizes distribution and logistics by pinpointing efficient routes for delivery from warehouses to retail outlets. Integrating socio-demographic, sales, and location data enables soft drink companies to enhance decisions on product placement, pricing, and promotions. Visualizing this data in GIS reveals intricate trends and patterns not easily discerned from raw data alone. It also clarifies proximity effects and neighborhood relationships critical for understanding market dynamics. As the soft drink market in South Africa continues to evolve, leveraging geospatial data will become increasingly important for companies like Coca-Cola to stay competitive. Competing brands like Stoney and Kingsley will need to target their identified markets at a neighbourhood level to systematically grow their brands.
Want to know more about our geospatial solution for MAPS? Read more about GeoMAPS
