Market Overview

The domestic beverage market size (including milk and milk-based drinks) for FY2020, based on the shipment values at manufacturers, scaled down to 93.4 percent of the previous fiscal year at 4,765,000 million yen, which failed to reach 5 trillion yen and is a decline for two consecutive years.

The beverage market in FY2020 should have expanded satisfactorily by recovering from the decrease in FY2019, which was the first decline in five years due to record-breaking cold summer in July and downturn from favorable sales in the previous fiscal year. In addition, FY2020 fell into the year for the Tokyo Olympics and Paralympics games to be held, which should have generated many factors to encourage beverage consumption: People could go outside more frequently to assemble and participate in events, and more tourists from all over the world could visit Japan. All such speculations were destroyed by the COVID-19 pandemic, diminishing the beverage sales tremendously.

Noteworthy Topics

Sales Differ by Channel in COVID-19 calamity

As the COVID-19 infections expanded, lifestyles of consumers and beverage consumption behaviors have changed. Conventionally, the sales promotions of beverages placed importance on how to meet thirst-quenching demand when people stayed outdoors, which led them to promote beverages mainly packed in small PET bottles to be consumed at offices, during travelling, and at various events. However, in the COVID-19 calamity, people are asked not to go outside for nonessential and non-urgent matters, which have expanded the expenditure from staying home. This has reduced the beverage sales at vending machines, convenience stores, and also at stores close to railway stations and schools, and at business districts.

On the other hand, the beverage sales at mass merchandisers, supermarkets, and drugstores have increased, meeting the demand for consuming and storing beverages at home. Because the demand for home consumption requires cost effectiveness, the sales of beverages packed in large containers have grown, and bulk purchasing (such as buying by cases packed with a dozen of bottles) has increased, as people opt to stay home and not to visit stores as much as possible. Buying beverages through mail order channel has also increased.

Future Outlook

The domestic beverage market size (including milk and milk-based drinks) for FY2021, based on the shipment values at manufacturers, is likely to diminish to 4,700,000 million yen, 98.6 percent of that of the previous fiscal year, a decline for three consecutive years. The opportunities for consuming beverages do not seem to grow, as it is uncertain when the pandemic will be subdued, and as the state of emergency has been announced for the fourth time during the summer tourism season and when people go back to their hometowns to commemorate their ancestors. That said however, as the sales of beverages in FY2020 had been the worst ever and as vaccination has been in progress; the decreasing level is not expected to be too big. Nevertheless, the full recovery and proactive tendency of the market is likely to be after FY2022.  

Research Outline