A Sanguine Outlook For Soft Drinks

Our cautiously optimistic domestic demand picture of Malaysia favours growth of the carbonates sector in 2012. As external economic conditions dampen growth in the Malaysian economy in the coming quarters, this is likely to weigh on consumer sentiment with negative spillover effects across the broader consumer goods industry. Amid heightened consumer price sensitivity in 2012, we expect consumers to keep a tighter rein over their spending on non-essential and indulgence food and drink products. Higher-value beverages such as fruit juices, energy drinks and ready-to-drink (RTD) tea/coffee are, therefore, likely to witness a slower demand growth this year.

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