Impact of COVID-19 on the Global RTD Beverages Market
The advent of the global pandemic has resulted in creating a global crisis across the world. Impacting over 195 countries, the pandemic has already created an economic backdrop worldwide and is deemed to create a chaotic environment, thereby resulting in a global rescission. With the rising number of cases rapidly, the global RTD beverages market has been affected in many ways. A few COVID-19 impacts on global RTD beverages market have been discussed below:
The RTD beverage market is a huge market which comprises the alcoholic as well as non-alcoholic beverages. The outbreak of COVID-19 has hard hit the RTD beverages market due to the mandatory closures of restaurants, bars, and food outlets across the globe, which is a major chunk of the revenue generation of the RTD beverage market. During these uncertain times, beverage companies are understanding and adapting through short term priorities and by focusing on more essential beverages. Beverage manufacturing companies are focusing on manufacturing water, milk, and other essential beverages to mitigate the losses due to COVID-19 restrictions. However, lack of adequate labor, limited raw materials availability, and logistics issues are some of the major concerns that the beverage industry is currently facing across the world. Therefore, despite having substantial demand for essential beverages across the world, the RTD beverage industry is anticipated to hamper for a couple of more months.
As a result of the COVID-19 outbreak, stockpiling and panic buying of alcoholic and non-alcoholic beverages have been witnessed worldwide. This has also created an acute shortage of beverages, thereby resulting in a price increase of existing stocks. Apart from that, due to the limited availability of popular beverages, the beverage industry worldwide has witnessed a sharp increase in demand for staple soft drinks. Apart from it, packaged water, coffee, dairy-based beverages, and juices are some other categories that have witnessed a sharp increase in demand across the globe due to the extended period of self-isolation. Retailers and distributors are struggling to cope with the demand for RTD beverages, both in stores and online channels, due to the lack of availability of the products. However, direct-store-delivery (DSD) distribution model and home delivery models are some of the effective ways that many distributors and retailers are opting out for the sale of RTD beverages.
Additionally, beverages that help in boosting immunity are witnessing a surge in demand in the last couple of months. Due to the lack of availability of vaccine for COVID-19, people are consuming beverages that help in boosting immunity. Consumption of beverages such as milk, tea, coffee, and other immunity-boosting beverages has increased across the globe in the last couple of months. It is further anticipated to remain high for the next couple of years. Online distribution channels such as e-commerce companies have been a major driver for the supply of RTD beverages during the COVID-19 outbreak. The outbreak has resulted in the closure of retail stores. This has resulted in a shift in consumer preference for online shopping. However, many e-commerce channels are facing the challenge of adequate availability of stocks due to movement restrictions.
Therefore, the demand for RTD beverages is certainly going to increase for the next couple of months as people are going through the lockdown phase and are spending more time at home rather than staying outside. However, production capacities, along with logistics and supply chain issues, are some of the major concerns that are anticipated to reduce the demand for RTD beverages for the next couple of months.