The Coca-Cola Co this month began construction of a bottling plant in Malaysia as part of its plan to invest MYR1bn (US$285m) in the country over the next five years. Here we take a look at insight information from Euromonitor on the market for soft drinks in the country.

  1. In 2008, soft drinks saw positive volume growth though at a slower rate than 2007. The slowing economy, coupled with rising fuel prices, caused consumers to tighten their belts and limit their consumption of soft drinks. Rising health awareness among consumers also encouraged them to switch from carbonates to healthier drinks like fruit/vegetable juice or even just plain tap water.
  2. The growing consumer concern about health and nutrition helped boost the volume growth of functional drinks, bottled water, RTD coffee and fruit/vegetable juice in 2008 over 2007 levels. Manufacturers were quick to capitalise on the rising health awareness of consumers through several new product launches and brand entrants.
  3. F&N Coca-Cola (M) Sdn Bhd retained its leadership in soft drinks in 2008, although its value share declined slightly due to the introduction of new brands, as well as active product launches by the established players.
  4. Supermarkets/hypermarkets remained the leading distribution channel in terms of retail volume sales of soft drinks in 2008, by maintaining a wide product range and engaging in frequent price promotions. Vending saw a slight drop in its volume share of soft drinks distribution in 2008, as the rapid expansion of store-based retailers, such as convenience stores and supermarkets/hypermarkets, enabled consumers to have easy access to soft drinks at any time of the day.
  5. The consumer demand for convenience is unlikely to diminish, according to Euromonitor. With the number of working Malaysians expected to reach 13m by 2013, and the economic slowdown early in the forecast period putting more demands on workers, consumers are likely to increasingly demand fast and easy drink options. However, the cost of soft drinks is likely to remain a key concern for consumers, as well.