Health-conscious Lankan to demand less fizzy drinks

6 July 2015 03:23 am

Increasing disposable income is less likely to translate into higher demand for carbonated soft drinks as the Sri Lankans are becoming more health conscious, according to a top official from the country’s oldest carbonated soft drinks manufacturer. 

Therefore, in order to cater to this emerging segment of health-conscious customer, Ceylon Cold Stores PLC (CCS) has now shifted their focus on researching and developing drinks with natural flavours and less carbonation. 

According to the Chairman of the CCS, Susantha Ratnayake, the medium to long-term potential of the Sri Lankan carbonated soft drinks market is limited due to this growing phenomenon. 

“I am confident that the increase in disposable income witnessed in the last quarter will act as a catalyst for greater demand of our frozen confectionery products whilst the growth potential for carbonated soft drinks may be constrained to an extent in the medium to long term due to a growing segment of health-conscious consumers,” Ratnayake said in his review in the company’s latest annual report. 

Sri Lanka in recent times has been seeing the emergence of an aspirational young middle income group of consumers who are extremely health-conscious and, as a result, employers are currently considering revising up the retirement age.  Private sector healthcare and pharmaceuticals sectors are few of the growing sectors in Sri Lanka, as the rising affordability demands hassle-free quality medicare as the public sector could not handle all the traffic. 

CCS has already re-directed its research and development initiatives to facilitate the natural flavours and colours when re-inventing existing products and introducing life style beverages to the market.

Carbonated soft drink is a feel-good product and could mirror the status of an economic development of a country and the happiness of its population. 
For the financial year ended March 31, 2015 the CCS group posted a net profit of Rs. 1.53 billion, up 25 percent on a consolidated revenue of Rs.27.7 billion, up 17 percent. 

Another notable trend observed among these emerging consumers who seek more convenience is that they have started to prefer beverage presented in plastic packaging as opposed to glass packaging. 

Beverages sold in plastic containers gained fast momentum and are now common in Sri Lanka than 5 years ago. 

As a result, CCS said that they would invest to enhance its production capacity of beverages packaged in polyethylene terephthalate (PET ) bottles and cater to the growing demand within this segment.

However, the resulting environmental impact will be a course for concern but the need for recycling plants could open up avenues for new business ventures.