United Kingdom Carbonated Beverages Market, By Product (Soft Drinks, Water, Sports & Energy Drinks, Others), By Flavor (Cola, Fruit Based, Others), By Distribution Channel (Hypermarkets & Supermarkets, Convenience Stores, Food Service Outlets, Transport Terminals, Online), By Region, Competition, Forecast & Opportunities, 2020-2030F

Market Overview

United Kingdom carbonated beverages market was valued at USD 19,355.42 Million in 2024 and is expected to reach USD 25,643.08 Million by 2030 with a CAGR of 4.8% during the forecast period. The United Kingdom carbonated beverages market is experiencing robust growth, driven by a combination of factors such as increasing consumer demand for diverse beverage options, shifting preferences towards healthier alternatives, and innovation in flavours and packaging. 

Key Market Drivers

Health-Conscious Consumer Preferences

A notable shift towards health-consciousness among UK consumers is influencing the carbonated beverages market. With increasing awareness of health issues related to sugar consumption, there is a growing demand for low-calorie, low-sugar, and functional beverages. Manufacturers are responding by reformulating products to reduce sugar content and introducing beverages with added functional benefits, such as vitamins, minerals, and natural ingredients. 62% of UK consumers are actively reducing sugar intake (Public Health England, 2023).This trend is particularly evident in the popularity of sparkling water and other healthier alternatives to traditional sugary soft drinks. The market's adaptation to these preferences is essential for sustaining growth and meeting consumer expectations.

Flavor Innovation and Product Diversification

Flavor innovation plays a crucial role in attracting and retaining consumers in the competitive carbonated beverages market. Brands are introducing unique and unconventional flavor combinations to cater to adventurous taste preferences. Limited-edition flavors, cocktail-inspired profiles, and collaborations with other food and drink brands are becoming prevalent strategies. This diversification not only enhances consumer engagement but also allows brands to differentiate themselves in a crowded market. The continuous introduction of new flavors helps maintain consumer interest and drives repeat purchases.

Expansion of Distribution Channels

The growth of various distribution channels significantly contributes to the accessibility and availability of carbonated beverages across the UK. Supermarkets and hypermarkets remain dominant in off-trade sales, providing consumers with convenient access to a wide range of products. Additionally, the rise of online shopping platforms and direct-to-consumer (D2C) models has transformed purchasing behaviors, offering consumers the convenience of home delivery and a broader selection of products. This expansion in distribution channels ensures that carbonated beverages are easily accessible to a diverse consumer base, thereby supporting market growth.

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Key Market Challenges

Regulatory Pressures and Sugar Tax Implications

The introduction of the Soft Drinks Industry Levy (SDIL) in 2018 marked a significant regulatory intervention aimed at reducing sugar consumption. While the levy has led to a 19% reduction in sugar content across carbonated soft drinks, it has also imposed financial burdens on manufacturers. Average price of carbonated drinks increased by 7.2% in 2023 due to rising production costs (Office for National Statistics, 2024). Products with higher sugar content incur higher taxes, leading to increased production costs. Some companies have responded by reformulating products to reduce sugar levels, while others have opted to reduce pack sizes or increase prices to maintain profitability. 90% of manufacturers reformulated drinks to avoid the tax (British Soft Drinks Association, 2023).These adjustments can affect consumer purchasing decisions and may lead to market fragmentation, with health-conscious consumers gravitating towards lower-sugar options, potentially sidelining traditional sugary beverages.

Supply Chain Disruptions and Raw Material Shortages

The UK drinks industry has been grappling with significant supply chain challenges, exacerbated by factors such as Brexit, the COVID-19 pandemic, and geopolitical tensions. These disruptions have led to shortages of essential raw materials, including carbon dioxide (CO₂), which is crucial for carbonation and packaging. The closure of the UK's largest fertiliser plant due to rising energy costs has further limited CO₂ availability, impacting production and distribution. Additionally, inflation and labor shortages have increased operational costs, compelling manufacturers to adjust their strategies, such as reducing production volumes or altering product offerings, to navigate these supply chain constraints.

Shifting Consumer Preferences and Market Competition

Consumer preferences in the UK are increasingly leaning towards healthier beverage options, including low-sugar, low-calorie, and functional drinks. This shift poses a challenge for traditional carbonated beverage brands that rely on sugary formulations. Brands like Coca-Cola have responded by introducing lower-sugar variants and reducing pack sizes to mitigate the impact of the sugar tax. However, these adjustments may not fully satisfy the growing demand for healthier alternatives. The rise of non-carbonated beverages, such as flavored waters and herbal infusions, intensifies competition, compelling carbonated drink manufacturers to innovate and diversify their product lines to retain market share and appeal to health-conscious consumers.

Key Market Trends

Health-Conscious Consumption and Functional Beverages

As health awareness increases, UK consumers are gravitating towards carbonated beverages that offer functional benefits. This trend is evident in the rising popularity of drinks infused with probiotics, vitamins, and adaptogens, catering to those seeking wellness-oriented options. Brands are responding by introducing products that not only provide refreshment but also contribute to consumers' health goals. This shift is prompting manufacturers to innovate and reformulate their offerings to align with the growing demand for beverages that support overall well-being. ​

Sustainability and Eco-Friendly Packaging

Environmental concerns are influencing purchasing decisions in the UK, with consumers increasingly favoring brands that prioritize sustainability. This preference is driving the adoption of eco-friendly packaging solutions, such as recyclable materials and reduced plastic usage. Companies are investing in sustainable practices to meet consumer expectations and regulatory requirements, aiming to reduce their environmental footprint and appeal to the eco-conscious market segment. ​

Premiumization and Artisanal Offerings

There is a growing demand for premium and artisanal carbonated beverages in the UK market. Consumers are willing to pay a premium for products that offer unique flavors, high-quality ingredients, and distinctive branding. This trend is leading to the emergence of small-batch, craft-style drinks that emphasize authenticity and craftsmanship. Brands are capitalizing on this by introducing limited-edition flavors and focusing on quality to differentiate themselves in a competitive market. ​

Segmental Insights

Product Insights

Soft drinks, the largest and most established category in the carbonated beverages market, are often characterized by their sweetened flavors, which may include cola, lemon-lime, root beer, and fruit-flavored options. Traditionally, cola-based drinks have dominated this segment, with leading global brands like Coca-Cola, Pepsi, and Dr Pepper. Despite the growing trend toward healthier options, soft drinks remain popular due to their affordability, refreshing qualities, and strong brand loyalty. However, this segment faces increasing scrutiny due to its high sugar content, which has led to regulatory pressures such as sugar taxes and calls for healthier alternatives. Despite these challenges, soft drinks continue to lead the market due to their widespread consumption and established consumer base. Major players are responding to the demand for healthier options by introducing low-sugar, sugar-free, and organic variants to attract health-conscious consumers. The soft drink segment remains the backbone of the carbonated beverage market, with continuous innovation focused on flavor variations and functional benefits.

Flavor Insights

Cola is the most iconic and long-standing flavor in the carbonated beverage industry, with brands like Coca-Cola and Pepsi dominating the market. The cola flavor segment is synonymous with carbonated soft drinks, and it remains the leading flavor category. Cola-based drinks continue to be popular due to their sweet and refreshing taste, brand loyalty, and cultural association with leisure and socialization. Despite increasing health concerns around sugar content, cola remains a staple in the carbonated beverage market. Major cola brands are adapting to the demand for healthier options by introducing low-sugar, diet, and zero-sugar versions. The cola segment is expected to maintain its dominant position due to the strong global demand for these beverages.

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Regional Insights

In the United Kingdom Carbonated Beverages market, England is the leading region in the United Kingdom when it comes to the carbonated beverages market, accounting for the largest share of the overall market. As the most populous and economically developed region, England has a broad consumer base with diverse preferences, ranging from traditional cola and fruit-based drinks to emerging categories like energy drinks and functional beverages. Major urban centers like London, Manchester, and Birmingham play a critical role in driving demand, as these areas have higher disposable incomes and a greater inclination towards convenience and premium products. The market in England is also significantly influenced by trends toward healthier consumption, with increasing demand for low-sugar, zero-calorie, and natural ingredient-based carbonated drinks. Additionally, the rise of e-commerce has made online purchasing a growing channel in this region, giving consumers access to a broader range of products. As sustainability becomes a more significant factor, England is also a key market for eco-friendly packaging, aligning with the country’s overall environmental objectives. This region is expected to maintain its dominance, though growth is likely to be moderate due to the maturity of the market.

Recent Developments

• After a 12-year hiatus, Coca-Cola relaunched its iconic "Share a Coke" campaign in the UK. The campaign features bottles and cans adorned with popular names and affectionate nicknames like "My Bestie" and "My Bae," aiming to foster a personal connection among consumers. Additionally, Coca-Cola introduced its Bacardi & Coca-Cola ready-to-drink cocktail to UK supermarkets, offering a convenient 250ml can priced at £2.30 with a 5% alcohol content.  ([Shoppers spot 'legendary' Coca-Cola bottles back in stores 12 years after being discontinued in the UK.
• Carlsberg's £3.3 billion acquisition of Britvic, the UK soft drinks manufacturer known for brands like Robinsons, J20, and R White's lemonade, was approved by the UK Competition and Markets Authority. The merger, forming Carlsberg Britvic, aims to combine Britvic's soft drinks portfolio with Carlsberg's beer ranges, seeking annual cost savings of £100 million over five years.
• Irn-Bru introduced its first-ever alcoholic cocktail-in-a-can, the Irn-Bru Vodka Martini, in collaboration with Funkin Cocktails. This limited-edition drink combines the classic taste of Irn-Bru with Funkin's signature nitrogen infusion, offering a unique velvety texture. The 200ml cans were available for a short period in UK convenience stores and major supermarkets, catering to consumers seeking innovative beverage options. 
• Coca-Cola launched two new limited-edition flavors in the UK: "Happy Tears" and "K-Wave." "Happy Tears" is a Zero Sugar variant with a blend of the classic Coke taste infused with a salty splash of minerals and a sweet pinch of peach. "K-Wave" is a fruity fantasy-flavored drink developed in collaboration with JYP Entertainment, celebrating K-Pop culture.
• Dr Pepper introduced a limited-edition "Zero Sugar Cherry Crush" variant in the UK at the end of January 2025. This new flavor offers a cherry-infused twist on the classic Dr Pepper taste, catering to consumers seeking novel and seasonal beverage options. The limited-time offering aims to attract both loyal fans and new customers interested in unique flavor experiences. 

Key Market Players

• Anadolu Grubu Holding A.Ş.
• National Beverage Corp.
• Refresco Group B.V.
• Monster Beverage Corporation
• The Coca-Cola Company
• Jones Soda Co.
• Keurig Dr Pepper Inc.
• Suntory Beverage & Food Limited
• PepsiCo, Inc.
• Danone S.A.

Report Scope:

In this report, the United Kingdom Carbonated Beverages market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

• United Kingdom Carbonated Beverages Market, By Product:

o   Soft Drinks

o   Water

o   Sports & Energy Drinks

o   Others

• United Kingdom Carbonated Beverages Market, By Flavor:

o   Cola

o   Fruit Based

o   Others

• United Kingdom Carbonated Beverages Market, By Distribution Channel:

o   Hypermarkets & Supermarkets

o   Convenience Stores

o   Food Service Outlets

o   Transport Terminals

o   Online

• United Kingdom Carbonated Beverages Market, By Region:

o   England

o   Scotland

o   Wales

o   Northern Ireland

Competitive Landscape

Company Profiles: Detailed analysis of the major companies presents in the United Kingdom Carbonated Beverages market.

Available Customizations:

United Kingdom Carbonated Beverages market report with the given market data, TechSci Research offers customizations according to a company's specific needs. The following customization options are available for the report:

Company Information

• Detailed analysis and profiling of additional market players (up to five).

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