Beverages consist of alcoholic and non-alcoholic beverages. The alcoholic beverages segment includes caffeinated alcoholic beverages, fruity alcoholic beverages, beer, flavoured alcoholic beverages, spirits, wines such as still wines and sparkling wines and gluten-free alcoholic beverages. Non-alcoholic beverages consist of less than 0.5% alcoholic content by volume. These beverages include soft drinks, juices, carbonated soft drinks, juice concentrate, functional drinks, ready-to-drink tea and coffee, flavoured water, nectars, still drinks, squash/syrups bottled water, energy or sports drinks, and non-alcoholic beer and wine. Other non-alcoholic beverages are dairy, soy drinks and milk alternatives are condensed milk, drinking yogurt, evaporated milk, flavoured milk, soymilk, white milk. Hot drinks are variants in hot coffee, hot tea and hot chocolate beverages.
The increasing consumption of healthy drinks is one of the primary growth factors of non-alcoholic drink market. Majority of the Malaysian consumers are increasingly demanding for drinks made from natural and organic ingredients due to the awareness in health benefits and hazardous effects of ingredients. Malaysians are steadily adopting health and wellness food trends and demanding for low and zero calories, low and zero sugar, and other kinds of soft drinks. Also, the soft drink manufacturers are developing low-fat and low-sugar soft drinks to cater to the health-conscious consumers. There is also a demanding for super-premium soft-drinks, in addition to the premium soft drinks. Millennials are aware about the increasing health consciousness and are encouraging the vendors to offer authentic and sophisticated beverages. Specialty drinks or super-premium soft drinks are formulated using simple ingredients, lesser calories, and natural sweeteners such as stevia. The non-alcoholic drinks market is fragmented with the presence of several international and domestic players. It was observed that there is a stiff competition between the non-alcoholic drink manufacturers in terms of product differentiation, price, quality, distribution, and marketing.
Alcoholic drinks include beer, cider, wine, spirits, and RTD pre-mixes. Premiumization of drinks is the key factor witnessing a positive impact on the growth of the alcoholic drinks market. Malaysians are demanding for premium drinks due to better taste, smoothness and status symbol. It was observed that the alcoholic drinks market is growing drastically under the premium alcoholic drinks segment. Majority of the consumers are following a healthier lifestyle and demanding for alcoholic drinks with a low volume of alcohol. These are known as lighter alcoholic drinks with less health risks. Manufacturers are offering light alcoholic drinks and flavoured cocktails which are low in calorie and alcohol content. Almost all the beverages are available in the supermarkets, hypermarkets and grocery stores in Malaysia.
According to the study “Malaysia Beverage Forecasts March 2017”, the hot drinks sector in Malaysia is leading by hot coffee followed by hot tea market in terms of sales. Hot coffee market is expected to record a quick growth in the future due to the increasing popularity of coffee among the younger consumers, rising cafe culture and increasing demand for healthy hot beverages such as herbal and fruit tea in the country. BOH Plantations Sdn. Bhd, Unilever and OLDTOWN Berhad are the leading market players in hot drinks market in Malaysia. Whiskey is the largest consumed spirit in Malaysia, while Gin and Genever also witnessed a rapid growth in the recent years. Glenfiddich, Dewar’s and Johnnie Walker are the leading competitors in the spirits sector. The variants of wines available in Malaysia are sparkling grape wines, other grape wines, unfermented grape, Vermouth and other flavoured grape wines and other other fermented beverages. Fortified Wine market in the country will witness a rapid growth during over the coming years. Treasury Wine Estates Vintners Limited, Pernod Ricard SA and E & J Gallo Winery are the leading market players in Malaysia. Wine consumption in Malaysia is low compared to the rest of the world.
Carbonates consumption in Malaysia has decreased owing to the expansion in alternative soft drinks. The diet soft drinks have been declining more rapidly than regular soft drinks in the recent years. Flavoured milk has witnessed a steady growth over the years and will continue its trend along with fermented milk and soymilk. Variants of juices are grapefruit juice, orange juice, other single fruit citrus juice, apple juice, grape juice, pineapple juice, tomato juice, other single fruit non- citrus juice and mixtures of juices.
Malaysians are concerned about the potentially negative health effects of different chemicals and artificial ingredients found in beverages. With better educated consumers, who tend to be more health-conscious are demanding for naturally healthy beverages. Manufacturers are using fortification process to add value to their beverages. Fortified vitamins A, C and E are added to fruit juices and hot drinks are fortified with malted oats, brown rice, barley and wheat extract that supplies complex carbohydrates. Several international, regional, and domestic players in Malaysian beverages are competing based on factors such as quality, pricing, product differentiation, packaging, innovation, distribution, and marketing strategies. Many beverage manufacturers are using social media platforms to market their products. The rapid technological changes and increasing competition will impact the beverages market in Malaysia over the coming years.
Key Topics Covered in the Report:
Ankur Gupta, Head Marketing & Communications