A refreshing change? Brand defection in Singapore’s soft drinks market

Singapore’s $600m+ soft drinks market is undergoing major changes.

Rising concerns about diabetes have resulted in seven of the major soft drinks manufacturers committing to lowering the sugar content of their drinks to less than 12% by 2020 - but rising concerns about health in general are opening up the soft drinks market. Coconut water, with its health-lifestyle reputation, is becoming increasingly popular and gaining prominence and shelf space in retail outlets.

Research into the soft drinks market by BVA BDRC has shown that 32% of consumers claim to be ‘very concerned’ about the sugar levels in drinks. Our corresponding research into the fast food market shows a similar figure; 27% of people are ‘very concerned’ about cholesterol levels in food, yet consumers’ food and beverage choices do not always match up to their apparent concerns.  From the popularity of fast food outlets and their top selling menu items, it’s obvious that old eating and drinking habits die hard.

There are, of course, more subtle powers at work; the influences of different brands are strong in the food and beverage category. Brand preference is often driven by availability – the food outlets and drinks brands with the widest distribution tend to sustain their market share simply by virtue of their availability in the market.  Indeed, the absence of a consumer’s preferred drink at point of purchase can trigger a brand switch – our recent survey found that 28% of consumers had trialled a new soft drink recently because their usual drink was unavailable. Such ‘happenchance’ can ultimately lead to brand switching, meaning lack of availability in stores can be hazardous to brand managers having to maintain sales volumes.

Branding itself is very strong in this category. When we look at the subliminal drivers of brand preference, the trust, image, and category leadership of F&B brands do far more to drive purchasing than people claim.  While F&B brands will be compelled to align their ingredients with these new codes for healthy living, it will be equally important to maintain their marketing communications, and ensure the widest possible distribution in Singapore through active trade marketing.

To get the upper hand in the retail shelf battle, drinks manufacturers must convince retailers that their product will sell and that they can command something of a premium.  For this reason, we have developed enhanced brand equity metrics designed specifically to appeal to retailers and gain retail space. Brand Margin is a BVA BDRC-developed measure of brand equity that determines the popularity and financial premium that a brand can command. Tried and tested across numerous industries, we are now applying Brand Margin in the FMCG sector to help trade marketing teams ensure their brands are available from the widest range of retailers.

For a taste of how our fresh ideas can put the zing back into a brand, get in touch.