SOUTH AFRICAN CARBONATED SOFT DRINKS INDUSTRY LANDSCAPE REPORT

PUBLISHED: FEBRUARY 2020

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2020 | 2 INDUSTRY & COMPETITOR INTELLIGENCE

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2020 | 3 FOOD AND BEVERAGES INDUSTRY REPORT CLIENTS

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2020 | 4 REPORT OVERVIEW

The South African Carbonated Soft Drinks Industry Landscape Report (119 pages) provides a dynamic synthesis of industry research, examining the local and global Carbonated Soft Drinks industry from a uniquely holistic perspective, with detailed insights into the entire value chain – from manufacturing to retailing, market size trends, industry trends, industry drivers and challenges, and pricing analysis.

SOME KEY QUESTIONS THE REPORT WILL HELP YOU TO ANSWER:

For the Global Carbonated Soft Drinks Industry Section: o What are the current market dynamics of the Global Carbonated Soft Drinks industry? o What are the key markets within the Global Carbonated Soft Drinks industry? o What are the Global Carbonated Soft Drinks industry trends, drivers, and challenges?

For the South African Carbonated Soft Drinks Industry Section: o What are the current market dynamics (market size, market value, market volumes): 2014-2019 Actual, 2020-2024 Forecasts? o What are the South African Carbonated Soft Drinks industry trends, drivers and challenges?

For the South African Carbonated Soft Drinks Manufacturer & Distributor Section: o Who are the key manufacturing and distributor players in the South African Carbonated Soft Drinks industry?

For the South African Carbonated Soft Drinks Retail and Pricing Analysis Section: o Who are the key retail players (retail outlets and convenience stores) in the South African Carbonated Soft Drinks industry? o What are the prices of popular Carbonated Soft Drinks brands across South African retail outlets?

2020 | 5 SCREENSHOTS FROM REPORT

119-page report filled with detailed charts, graphs, and insights

2020 | 6 SAMPLE FROM REPORT GLOBAL INDUSTRY OVERVIEW

The global Carbonated Soft Drinks (CSD) market is estimated o However, growing awareness amongst increasingly health conscious to be worth approximately US$402.3 billion in 2020, and is consumers regarding the sugar content of CSD products could act as a predicted to grow at a CAGR of 3.4% to reach approximately restraint on the market, as these consumers could potentially opt for healthier alternatives. Additionally, the global CSD market’s growth could US$444.7 billion in 2023, as illustrated in graph below. In be negatively affected by static growth in terms of consumption within terms of per capita revenue, it is expected that US$54 per developing regions, as health awareness amongst consumers in these person will be generated in 2020, while per capita regions increase. consumption is expected to reach 28.1 litres. o In terms of segmentation, the global CSD market can be segmented by Flavour into Cola, Lemon, Lime, Orange, and Others. Based on Flavour, o Overall, the CSD market growth over the past few years has been the Cola segment is expected to continue to be the largest Flavour attributed to the introduction of a wide variety of products catering to segment up to 2024. changing consumer food trends. Furthermore, the increasing number of younger consumers within developed regions and the increasing demand o In addition, the global market can be segmented by packaging type into for processed food products in developing countries has also driven the Bottles and Cans. Based on packaging type, the Bottles segment is growing demand for CSD products. predicted to continue to be the largest packaging segment in terms of revenue within the global CSD market up to 2024. o Additional factors, which have driven the global CSD market, include growing urbanised populations, rising consumer disposable income, VALUE OF GLOBAL CARBONATED SOFT DRINKS growing demand for takeaway food products, and greater accessibility of MARKET: 2020* & 2023* (IN US$ BILLION) products due to distribution channel expansion. 500 444.7 402.3 o There has also been a shift in preference amongst global consumers 400 towards craft soda products that contain a lower amount of calories and 300 sugar content, matching consumer health preferences in this regard. 200 o Packaging and labelling innovations for CSD products have also helped to 100 drive demand by adapting to consumer needs and by increasing product and brand visibility. 0 2020* 2023*

* Estimate 2020 | 7 Sources: MRF; MordorIntelligence; Hexaresearch; Statista; MarketWatch; Flaticon SAMPLE FROM REPORT SA CARBONATED SOFT DRINKS INDUSTRY: SA INDUSTRY DRIVERS

Flavour Innovation

o Within the current market environment, CSD manufacturers have started to explore various ways to regain declining market share.

o One of key trends which has arisen from this exploration process is the introduction of exotic flavours. This ongoing trend currently represents one of the key ways in which CSD manufacturers are attempting to cater to the broadening taste palate of consumers and also keep consumers engaged.

o As an example, PURA, a Carbonated Soft Drinks company, currently offers consumers an alternative CSD product range that is enriched with exotic flavours such as juniper, cranberry, cucumber and lime, and seville orange, amongst others.

o Another example is Barker & Quin, a Paarl-based premium tonic producer in the Western Cape, who are currently are also offering consumers innovative beverage flavours, particularly in terms of their Indian Tonic. For example, the ingredients of their Finest Indian Tonic Water include natural quinine, citrus fruit extracts, and Indian spices like cardamom and star anise.

o Due to the popularity of these new flavour innovations, it is expected that more soft drink manufacturers will capitalise on this trend by developing new and innovative flavour profiles in order to cater for consumer preferences and ultimately drive sales.

2020 | 8 Source: Euromonitor; PURA; B&Q SAMPLE FROM REPORT SA MANUFACTURER & DISTRIBUTOR OVERVIEW: COCA-COLA

Established in 1886, the Coca-Cola Company is a multi- COCA-COLA’S CARBONATED SOFT DRINK faceted manufacturer and distributor of concentrates, BRANDS/PRODUCTS: syrups, and beverages globally. • Appletiser • Sprite

o Coca-Cola entered the South African market 90 years ago, with the first • Coca-Cola • Stoney Coca-Cola product sold in Cape Town in 1928. • Fanta • Tab o Coca-Cola’s core business includes the manufacturing and selling of concentrates, beverage bases, and syrups to bottling operations, as well • Schweppes • Twist as owning brands and being responsible for consumer brand initiatives. • Sparletta o The company is operational by means of multiple local channels and has approximately 225 bottling partners spread across the world. The bottling partners manufacture, package, merchandise, and distribute the branded beverages to customers and vending partners, where it is in turn then sold to customers.

o In addition, Coca-Cola beverages are distributed to more than 200 countries and reaches approximately 27 million customer outlets, resulting in more or less 1.9 billion servings sold on a daily basis.

o The Coca-Cola Company has more than 500 brands and its beverage portfolios consists of a wide variety of products including sports drinks, enhanced water, ready-to-drink coffee, and Carbonated Soft Drinks, amongst others.

o Of particular interest is their extensive range of Carbonated Soft Drinks brands and products including Appletiser, Fanta, Schweppes, and Sprite, amongst others. 2020 | 9 Source: C-C; C-C 1; C-C 2; CCBSA ; C-C-SA; C-C-3; Logo SAMPLE FROM REPORT SA MANUFACTURER & DISTRIBUTOR OVERVIEW: PEPSI MARKETING

Pepsi is one of the most well-known Carbonated Soft Drink brands globally, as well as in South Africa. Their signature blue, red, and white colours feature in all marketing material and the company often makes use of professional athletes to advertise their products.

o From Pepsi’s social media platforms, it is evident that they are involved in events for younger audiences and that they regularly launch competitions and promotions on their social media platforms such as Facebook.

o In January 2020, Pepsi also launched a new tagline ‘That’s What I Like’ – the first new tagline in twenty years. This new tagline is part of Pepsi's efforts to define themselves not as oppositions to other cola drinkers, but rather as its own brand for people who are comfortable with themselves and do not worry about how they are perceived by others.

o In October 2019 Pepsi launched its ‘Pepsi Million Buck Sip’ promotion to promote the Pepsi Max brand. Participants had the opportunity to stand a chance to win R1,000,000.

o To enter, participants had to purchase a Pepsi Max and film or photograph themselves taking a sip and saying “This Pepsi MAX tastes like a Million Pepsi’s Social Media Following – w/c 3 February 2020 Bucks” and upload the video or photo to social media using the hashtag #PepsiMillionBuckSip.

o Moreover, this promotion also included numerous Pepsi Max stalls at various events around South Africa over October and December 2020, to encourage people to participate in this competition. 55,445 2,748 10,900 N/A

2020 | 10 Source: PepsiArticle1; PepsiArticle2; PepsiArticle3; PepsiPressRelease; PepsieFB 1; PepsiFB 2; PepsiFacebookEvents; Instagram; Twitter SAMPLE FROM REPORT SA CARBONADTED SOFT DRINK PRICING ANALYSIS: COLA CARBONATES

BRAND AND SIZE

300ml R9.99 R10.99 R9.99 R8.91 R9.99 R9.99 R9.99 R10.49 Coca-Cola R19.99 2L R21.99 R21.99 R21.65 R21.99 R21.99 R22.49 R22.49 (Special)

300ml R9.99 R10.99 R9.99 R7.32 R9.99 R9.99 R9.99 R10.49 Coca-Cola Light R16.99 2.25L R17.99 R18.99 R19.99 R18.45 R17.99 R19.99 R21.00 (Special)

300ml R9.99 R10.99 R9.99 R7.32 R9.99 R9.99 R9.99 R10.49 Coca-Cola No Sugar 1L R12.99 R13.99 R14.99 R12.95 R13.99 R14.99 R12.99 R14.99

Coo-ee Cola 2L N/A N/A N/A R9.95 R11.49 N/A N/A N/A

330ml R5.99 N/A R6.99 R5.20 N/A R5.99 R5.49 N/A Pepsi 2L R18.99 R18.99 R17.99 R14.95 R18.99 R18.99 R18.99 N/A

2020 | 11 This pricing analysis was conducted at retail stores and supermarkets during w/c 27January 2020. TABLE OF CONTENTS

EXECUTIVE SUMMARY (3 Pages)

Global Industry Snapshot SA Industry Snapshot SA Industry Drivers and Restraints

1. GLOBAL CARBONATED SOFT DRINKS INDUSTRY (17 Pages)

1.1 Global Overview: VALUE OF GLOBAL CARBONATED SOFT DRINKS MARKET: 2020* & 2023* (IN US$ BILLION) (Graph) 1.2 Global Market Environment 1.3 Global Industry Imports: VALUE OF GLOBAL CATEGORY IMPORTS: 2015-2018* (IN US$ BILLION); TOP 6 CATEGORY IMPORTING COUNTRIES: 2018* (IN US$ MILLION) (Graphs) 1.4 Global Industry Exports: VALUE OF GLOBAL CATEGORY EXPORTS: 2015-2018* (IN US$ BILLION); TOP 6 CATEGORY EXPORTING COUNTRIES: 2018* (IN US$ MILLION) (Graphs) 1.5 Global Key Markets: Regional Overview: GLOBAL CARBONATED SOFT DRINKS OFF-TRADE RETAIL SALES, BY REGION: 2019 (IN MILLION LITRES) (Graph) 1.6 Global Key Markets: Latin America: THE COCA-COLA COMPANY’S NET OPERATING REVENUES WORLDWIDE: 2014-2018 (IN US$ BILLION) (Graph) 1.7 Global Key Markets: North America 1.8 Global Key Markets: Asia-Pacific 1.9 Global Key Markets: Europe: REVENUE IN THE CSD SEGMENT (AT HOME): 2019-2023 (IN US$ MILLION) (Graph) 1.10 Global Key Markets: Middle East and Africa 1.11 Global Industry Trends 1.12 Global Industry Drivers 1.13 Global Industry Challenges

Image Source 2020 | 12 TABLE OF CONTENTS

2. SOUTH AFRICAN CARBONATED SOFT DRINKS INDUSTRY (27 Pages)

2.1 South African Industry Overview 2.2 South African Market Environment 2.3 South African Industry Trade: VALUE OF SOUTH AFRICAN IMPORTS: 2014-2018 (IN ZAR MILLIONS); VALUE OF SOUTH AFRICAN EXPORTS: 2014-2018 (IN ZAR MILLIONS) (Graphs) 2.4 South African Industry Market: South African Carbonates Market Definitions 2.5 South African Industry Market: South African Carbonates Distribution Channels Definitions 2.6 South African Industry Market Size: Carbonates Market (2014-2019): VALUE OF SA CARBONATES MARKET: 2014-2019 (IN ZAR BILLION) (Graph); SA CARBONATES MARKET CAGR AND TOTAL GROWH (IN PERCENTAGES) (Table) 2.7 South African Industry Market Size: Carbonates Market (2014-2019: By Category): VALUE OF SA CARBONATES MARKET BY CATEGORY: 2014-2019 (IN ZAR BILLION) (Graph) 2.8 South African Industry Market Size: Cola Carbonates Market (2014-2019: By Category): VALUE OF SA COLA CARBONATES MARKET BY CATEGORY: 2014-2019 (IN ZAR BILLION) (Graph) 2.9 South African Industry Market Size: Non-Cola Carbonates Market (2014-2019: By Category): VALUE OF SA NON-COLA CARBONATES MARKET BY CATEGORY: 2014- 2019 (IN ZAR BILLION) (Graph) 2.10 South African Industry Market Size Forecast: Carbonates Market (2020*-2024*): VALUE OF SA CARBONATES MARKET: 2019 & 2024* (IN ZAR BILLION) (Graph); SA CARBONATES MARKET VALUE FORECAST BY CATEGORY (IN ZAR MILLIONS) (Table) 2.11 South African Industry Market Volumes: Carbonates Market (2014-2024*): RETAIL VOLUME OF SA CARBONATES MARKET (2014-2024*) (Table) 2.12 South African Industry Market Distribution: Carbonates Market: CHANNEL DISTRIBUTION FOR CARBONATES PRODUCTS: 2019 (IN PERCENTAGE) (Graph); CHANNEL DISTRIBUTION (2014 AND 2019) BY OUTLET TYPE (Table) 2.13 South African Industry Trends 2.14 South African Industry Drivers 2.15 South African Industry Challenges Image Source 2020 | 13 TABLE OF CONTENTS

3. SOUTH AFRICAN CARBONATED SOFT DRINKS MANUFACTURER & DISTRIBUTOR OVERVIEW (34 Pages)

3.1 Chill Beverages: Overview & Carbonated Soft Drink Brands/Products 3.2 Chill Beverages: Marketing: Bashew’s 3.3 Chill Beverages: Marketing: Fitch & Leedes 3.4 Coca-Cola: Overview 3.5 Coca-Cola: Financial Performance: COCA-COLA’S FINANCIAL RESULTS (IN US$ MILLION) (Table); COCA-COLA NET OPERATING REVENUE BY GEOGRAPHICAL AREA FOR THREE MONTHS ENDED 27 SEPTEMBER 2019 (IN US$ MILLION) (Graph) 3.6 Coca-Cola: Carbonated Soft Drink Brands/Products 3.7 Coca-Cola: Marketing: Appletiser 3.8 Coca-Cola: Marketing: Coca-Cola 3.9 Coca-Cola: Marketing: Fanta & Sprite 3.10 Coca-Cola: Marketing: Schweppes 3.11 Kingsley Beverages: Overview 3.12 Kingsley Beverages: Carbonated Soft Drink Brands/Products 3.13 Pioneer Foods: Overview 3.14 Pioneer Foods: Financial Performance: PIONEER FOODS’ FINANCIAL RESULTS (IN ZAR MILLIONS) (Table); REVENUE FOR PIONEER FOODS SEGMENTED BY DIVISION FOR SIX MONTH ENDED 31 MARCH 2019 (IN ZAR BILLION) (Graph) 3.15 Pioneer Foods: Carbonated Soft Drink Brands/Products

Image Source 2020 | 14 TABLE OF CONTENTS

3. SOUTH AFRICAN CARBONATED SOFT DRINKS MANUFACTURER/DISTRIBUTOR OVERVIEW (CONTINUED) (34 Pages)

3.16 The Beverage Company: Overview 3.17 The Beverage Company: Carbonated Soft Drink Brands/Products 3.18 The Beverage Company: Marketing: Coo-ee 3.19 The Beverage Company: Marketing: JIVE & Refreshhh 3.20 The Beverage Company: Marketing: Pepsi 3.21 Tiger Brands: Overview 3.22 Tiger Brands: Financial Performance: TIGER BRANDS’ FINANCIAL RESULTS (IN ZAR MILLIONS) (Table); REVENUE FOR TIGER BRANDS’ CONSUMER BRANDS – FOOD SEGMENTED BY BUSINESS FOR THE YEAR ENDED 30 SEPTEMBER 2019 (IN ZAR BILLION) (Graph) 3.23 Tiger Brands: Carbonated Soft Drink Brands/Products 3.24 Tiger Brands: Marketing: Rose’s 3.25 Twizza: Overview & Carbonated Soft Drink Brands/Products 3.26 Twizza: Marketing: Twizza 3.27 Soda King: Overview 3.28 Soda King: Carbonated Soft Drink Brands/Products 3.29 Carbonated Soft Drink Manufacturers & Distributors: Other

2020 | 15 Image Source TABLE OF CONTENTS

4. SOUTH AFRICAN CARBONATED SOFT DRINKS RETAIL & PRICING ANALYSIS (22 Pages) 4.1 SOUTH AFRICAN CARBONATED SOFT DRINKS RETAIL ANALYSIS (8 Pages)

4.1.1 South African Retail Overview 4.1.2 Checkers: Overview 4.1.3 Food Lover’s Market: Overview 4.1.4 Massmart: Overview: MASSMART SALES BY DIVISION FOR THE 26 WEEKS ENDED 30 JUNE 2019 (IN ZAR BILLION) (Graph) 4.1.5 Pick n Pay: Overview: PICK N PAY TURNOVER FOR 26 WEEK ENDED 1 SEPTEMBER 2019 (IN ZAR BILLION) (Graph) 4.1.6 Shoprite: Overview: SHOPRITE GROUP TURNOVER FOR YEAR ENDED 30 SEPTEMBER 2019 (IN ZAR BILLION) (Graph) 4.1.7 Spar: Overview: SPAR GROUP TURNOVER FOR YEAR ENDED 30 SEPTEMBER 2019 (IN ZAR BILLION) (Graph) 4.1.8 Woolworths: Overview: WOOLWORTHS HOLDING LIMITED TURNOVER AND CONCESSIONAL SALES FOR THE 52 WEEKS ENDED 30 JUNE 2019 (IN ZAR BILLIONS) (Graph)

4.2 SOUTH AFRICAN CARBONATED SOFT DRINK CONVENIENCE STORE ANALYSIS (7 Pages)

4.2.1 Bonjour, La Boutique & Thrupps (Total): Overview 4.2.2 BP Express & Pick n Pay Express (BP): Overview 4.2.3 Freshstop (Caltex): Overview 4.2.4 Quickshop & Woolworths Foodstop (Engen): Overview 4.2.5 Sasol Delight (Sasol): Overview 4.2.6 Shell Select & Spar Express (Shell): Overview 4.2.7 Convenience Stores: Promotions

Image Source 2020 | 16 TABLE OF CONTENTS

4.3 SOUTH AFRICAN CARBONATED SOFT DRINKS PRICING ANALYSIS (7 Pages)

4.3.1 South African Carbonated Soft Drinks Pricing Analysis: Cola Carbonates: Coca-Cola, Coca-Cola Light, Coca-Cola No Sugar, Coo-ee Cola, Pepsi, Pepsi Light, Pepsi Max, Private Label, Refreshhh Cola, Tab, Twizza Cola– Comparative pricing at Checkers, Food Lover’s Market, Game, Makro, Pick n Pay, Shoprite, Spar and Woolworths

4.3.2 South African Carbonated Soft Drinks Pricing Analysis: Non-Cola Carbonates: 7-up, 7-up Sugar Free, Appletiser, Barker and Quin, Cappy Tropical Fruit Juice, Coo-ee Raspberry, Double Dutch Premium Mixer, Fanta Orange, Fever-Tree Tonic Water, Fitch & Leedes Indian Tonic, Grapetiser, Spar-letta Iron Brew, JIVE, Liqui-Fruit, Mirinda, Monis Sparkling Fruit Juice, Mountain Dew, Private Label, PURA Soda, Refreshhh Lemonade, Rose’s Lime & Lemonade, Sanpellegrino Anciata Rossa, Schweppes Lemonade, Spar-letta Cream Soda, Sprite, Sprite Zero, Stoney Extra Kwetsa, Twist Lemon, Twizza – Comparative pricing at Checkers, Food Lover’s Market, Game, Makro, Pick n Pay, Shoprite, Spar and Woolworths

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