South America Ready to Drink Beverages Market - Growth, Trends, and Forecasts (2022 - 2027)

South America Ready to Drink Beverages market is projected to register a CAGR of 4.1% during the forecast period, 2022-2027.

Increasing consumer interest in dairy-free and vegan beverages owing to the influence of expnading plant-based food culture is anticipated as the key trend in the South America RTD beverages market. Further, functional ready to drink beverages are have gained significant popualrity among young populaton in the recent past as these products are often marketed with special health claims including, organic, sugar-free, vegan, and additive-free, among others. Increaisng adoption of healthy lifestyles which are primarily linked with the active particiaption in fitness activities, regular exercise, and leisure sports are encouraging consumers to incorporate energy drinks and functional beverages into thier regular diet as these drinks offer wide range of nutritional benefits such as probiotics, antioxidants, vitamins, and minerals.

Additionally, well-developed organized reatiling allow consumers to choose form wide-ranging convenient and wholesome on-the-go beverage categories. The increased shelf visibility of products is also influencing impulse purchasers and new consumers. Customers also find it beneficial to shop from such large-scale retail stores, as they offer attractive discounts and schemes on bulk purchase of sport drinks.

Key Market Trends

Increasing Demand for Natural/Organic Beverages

Due to growing consumer knowledge of mindful living and wholesome products, they are becoming more health conscious. Customers are turning away from harmful items as obesity-related conditions including high blood sugar, high blood pressure, and heart disease is becoming more prevalent. As a result, organic and natural products have emerged as the most favored category in the recent past. Ready-to-drink beverages with additional health claims such as organic, sugar-free, dairy-free, and gluten-free, are now widely accessible owing to their widespread acceptance by health-conscious consumers. Also, key brands are directing their efforts towards product innovation to launch clean-label RTD beverages to cater to evolving taste preferences. For instance, in April 2021, Honest Tea, a wholly-owned subsidiary of The Coca-Cola Company, expanded its bottled beverage portfolio with the launch of a new organic drink named Honest Yerba Mate, which contains 13g of sugar and 60 calories per 16oz can. It is a traditional caffeinated South American drink, which is brewed from the leaves and stems of the yerba mate plant.

Energy Drink is Fastest growing Segment

The demand for energy drinks has been primarily driven by the rise in fitness enthusiasts, who are actively involved in various physical training programs and sports activities. Energy drinks are widely popular among youngsters due to their claims to improve performance, endurance, and alertness. Further, vitamin-infused functional beverages are consumed to prevent the risk of heart disease and cancer. Therefore, the proliferation of athleisure trends and active participation in various sports such as football, tennis, and basketball, among others are accelerating the sale of energy drinks in the South America market. In response to rising consumer demand, key companies are also focusing on product diversification in terms of packaging and formulation. For instance, in December 2021, TNT energy drinks, a Brazilian brand launched new packaging, much more attractive, and colorful, featuring the concept of street art, and highlighting graffiti. The product packaging also glows when exposed to black light. Further, key brands are investing in advertisement campaigns, celebrity endorsement, and sports event sponsoring agreements to increase product visibility and facilitate brand communication with target consumer groups, which is anticipated to push the demand for energy drinks in the South America market.

Competitive Landscape

South America Ready to Drink Beverages market is highly competitive with the presence of regional and global players. Some of the prominent players in the market are The Coca-Cola Company, Nestle SA, Monster Beverage Corporation, Redbull, and Starbucks Corporation. Companies are focusing on the sustainability of the products and also focusing on mergers and acquisitions to strengthen their supply chain and expand their business. For instance, in April 2022, Danone and Compania Cervecerias Unidas (CCU) announced a strategic alliance, as CCU Argentina has acquired a large minority stake in Aguas Danone de Argentina. This partnership will allow both companies to enrich their beverage offerings and strengthen their operations in the country.

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