As lessen mobility restriction hence more activity outside home in 2021, the beverage and dairy sectors trend has been dynamic with various activities across consumers' age.
In this section, we will explore on the Non-Alcoholic Ready to Drink (NARTD) Beverages, divided into Dairy and Non-Dairy categories.
Beverage is one of the most challenged sectors in the pandemic time due to its high dependency upon impulse and on-the-go purchase. Limited mobility and stay-at-home period are impacting some categories’ slower growth.
The health benefit in Dairy Beverage segment become the key factor for its survival during the pandemic. The other supporting factor is more planned trips or take-home occasions in the categories. While on the other hand, tougher circumstances happen among Non-Dairy Beverage categories due to its higher dependency upon the on-the-go purchases. In 2021, a recovery trend is seen in Non-Dairy Beverage categories when the mobility restrictions are loosening.
There are four key learnings in NARTD sector in preparing growth in 2022.
1. Road to recovery especially among adults
2. Proximity is highly relevant, General Trade is showing faster recovery
3. Higher value for money and shifting occasions
4. Festive is back for beverages
1.Road to recovery especially among adults
As one of the countries with largest informal work force in the world, the adult age group in Indonesia will gradually increase their mobility and outside home daily activities. With the rising mobility, the recovery for impulse purchase in NARTD is expected. Adult age group is also the driver for 2021’s NARTD growth, as they cover the static growth among younger age groups.
When it comes to impulse purchase, proximity is a particularly important factor for consumers. When they are thirsty, they will not walk for another half kilometre finding another store, instead they will look for the closest store to get their drink. As such, important to have strong availability in proximity channels.
3.Higher value for money and shifting occasions
The popularity of bigger pack sizes is driven by the better value for money and more people are enjoying the beverages at home with family. The key categories for this bigger pack size trend are RTD Tea and Carbonated Soda Drink with double digit growth.
The festive uplift in 2021 has been recovered and back to pre-covid level across categories like CSD (Carbonated soft drinks), RTD Tea, and Mineral Waters. This recovery is a good sign for brands to gain back the momentum to optimise the festive peak sales.
Disrupting with Innovation
There are several notable innovations that are seen in the NARTD market that has been a disruptive movement due to the impacts brought to the category.
In the Yogurt category, the leading brands are consistently bringing innovations in packaging, format, and flavour aspects. By the innovations applied, these brands can expand their buyer base by gaining close to 9 million new buyers and extend the occasion beyond its functional use as nutrition source.
The other inspiring case comes from Liquid Milk category. There is one dark horse brand coming into the market that able to recruit 11 million buyers. The key driver for the rise is leveraging affordability to grow penetration among mid-to-lower class consumers. Besides, price point is far below the Liquid Milk average price which naturally accepted by wider group of consumers.
Navigating in 2022
Optimism is an ally for brands in the coming years with recovering trends from on-the-go purchases. The early sign of recovery is seen across regions and is expected to retain following the increase mobility due to higher vaccination rate and less anxiety among consumers.
With the current situation, the NARTD market is expected to grow in both segments. Dairy Beverages is projected to grow at 7% in 2022 while Non-Dairy Beverages is at 6%. This healthy growth is exceptionally depended on the Covid situation in the coming year.
However, brands should prepare for growth through these two pivotal points.
