Market Overview

The domestic beverage market size (including milk and milk-based drinks) for FY2019, based on the shipment values at makers, scaled down to 5,100,000 million yen, 98.5% of that of the previous fiscal year, a decline for the first time in five years.

Expansion of the beverage market in FY2018 stemming from record-breaking heat waves had been a concern since at that time, because of the possibility of causing sudden drop from surge in demand, which became a reality. In 2018, record-breaking heat waves caused a rapid increase of beverage demand in July, the month in which the beverage demand usually peaks. In July 2019, however, inclement weathers brought about complete opposite results from the previous year, which affected until the rest of that year, unable to recover the loss of sales in July. In addition, from early spring to just before summer, the rise of distribution/transportation expenses and package fees led each beverage maker to raise the prices of large PET-bottled beverages, which also was the reason of sales decrease.

Noteworthy Topics

Carbonated Drinks including Sparkling Water and Energy Drinks Kept Favorable Sales While All Other Beverages Shrank

The market of carbonated drinks including sparkling (carbonated) water and energy drinks has kept on expanding. Sparkling water has been continuously growing, supported by development of various drinking methods and by health conscious consumers being in favor of non-sugar. On the other hand, the sales clearly differed by brand. Oligopoly has been in progress by the top brand “Wilkinson” provided by Asahi Soft Drinks.

As for energy drinks, “Monster Energy” and “Red Bull” have been the two prominent brands, with no other brands being able to pursue them. In FY2019, CocaCola Systems released some products to seek for success, and Otsuka Foods Co., Ltd. and Suntory Holdings showed some new attempts of focusing on esports, with the former releasing beverage for esports and the latter supporting esports events.

Future Outlook

The beverage market size (including milk and milk-based drinks) for FY2020 is likely to end up with 4,970,000 million yen, 97.5% of that of the previous fiscal year, two years in a row of decline. The market could have risen from reactionary fall of the previous fiscal year if it had been the usual year. However, the new coronavirus infections led the sales in April and May 2020 to significantly drop, which is likely to last for some time, difficult for the market to fully recover during the FY2020.

Under such circumstances, beverage makers do not likely to change their policies to focus on growing categories such as sugar-free teas and carbonated beverages. On the other hand, however, they are also expected to release the beverages placing importance on “functionality” or “health” more than usual years, as growth is observed for the sales of “functional” beverages rather than thirst-quenching ones.

Research Outline