Constraints on Domestic Beverage Market Growth and Ongoing Sales and Price Competition

「As consumers’ preference for saving money strengthened, price revisions implemented by beverage manufacturers in October 2024 caused total market sales volume to fall below the same period of the previous year. Sales volume also declined in the vending-machine market, the Group’s main focus, in line with the overall beverage market.」

「In the domestic beverage market during the 9 months ended 31 January, the impact of price revisions implemented by companies notwithstanding, sales volume was maintained at approximately the same level as in the previous year, supported by the recovery in foot traffic and the benefit of record-high summer temperatures.」

「In the domestic beverage market during the 6 months ended 31 October, sales volume at vending machines and convenience stores remained firm as foot traffic recovered, while price revisions implemented by companies caused sales volume at mass retailers to decline. Overall market sales volume decreased by approximately 2% from the previous year.」

「Although the price revisions implemented by companies in October 2022 had an impact, domestic beverage market sales volume during the 3 months ended 30 April remained broadly in line with the previous year, supported by the recovery in foot traffic. In distribution channels, convenience stores recorded sales volume above the previous year as restrictions on activities were lifted and favorable weather supported leisure demand, while mass retailers such as supermarkets recorded lower sales volume owing to higher unit prices and consumers’ increasingly strong preference for saving money.」

「Domestic beverage market sales volume for the fiscal year was approximately 3% higher than in the previous year but remained below pre-pandemic levels. As higher raw-material and logistics costs continued to have a significant impact on industry earnings structures, companies across the industry engaged in fierce competition for sales volume in distribution channels such as convenience stores and mass retailers.」

「Domestic beverage market sales during the 9 months ended 31 October were approximately 5% higher than in the same period of the previous year but remained below pre-pandemic levels. As higher raw-material and logistics costs continued to have a significant impact on industry earnings structures, competition over sales promotion intensified in distribution channels such as convenience stores and mass retailers ahead of price revisions beginning in October.」

「Domestic beverage market sales during the first half of the year, from January through June, were approximately 3% higher than in the previous year but remained below pre-pandemic levels. As higher raw-material and logistics costs continued to have a significant impact on industry earnings structures, competition over sales promotion intensified in distribution channels such as convenience stores and mass retailers as companies sought to secure sales volume.」

「Sales in Japan’s domestic beverage market during the 3 months ended 30 April were approximately 2% higher than in the same period of the previous year, but remained approximately 6% below fiscal 2019. Sales had not returned to pre-pandemic levels. As raw-material and logistics costs continued to have a significant impact on industry earnings structures, competition over sales promotion intensified in distribution channels such as convenience stores and mass retailers as companies sought to secure sales volume.」

「Industry-wide sales volume during the first half of the year, from January through June, increased by approximately 1% from fiscal 2020 but remained approximately 7% below fiscal 2019. Sales had not returned to pre-pandemic levels.」

「The beverage industry as a whole saw sluggish sales in the first quarter owing to the impact of the state of emergency declared in January 2021. From the second quarter onward, sales are expected to benefit from a rebound against the previous year, but the reissuance of a state of emergency is also expected to have an impact.」

「In the fiscal year, Japan’s domestic beverage market saw a decline of approximately 7% in total sales volume from the previous year, as sales through vending machines and convenience stores fell sharply owing to changes in consumer behavior triggered by the COVID-19 pandemic.」

「Sales in Japan’s domestic beverage market during the 6 months ended 31 October were significantly lower than in the same period of the previous year owing to the impact of requests to refrain from going out and other measures accompanying the spread of COVID-19. Sales have been recovering since the Japanese government lifted its state of emergency, but with concerns over a second and third wave of infections, industry-wide sales volume for the full year is expected to fall short of the previous year’s level.」

「Sales in Japan’s domestic beverage market during the 3 months ended 30 April were lower than in the same period of the previous year, owing to the impact of requests to refrain from going out and other measures accompanying the spread of COVID-19.」

「Sales in Japan’s domestic beverage market during the 3 months ended 31 October were lower than in the same period of the previous year, partly because of record-low temperatures in July and the impact of price revisions implemented by companies across the industry for large PET-bottle products. While higher raw-material and delivery costs are expected to have a significant impact on earnings, sales-promotion expenses continue to trend higher against the backdrop of intensifying sales competition and consumers’ cost-consciousness. The impact of competitors’ pricing strategies has compounded these factors, and the industry’s earnings environment remains challenging.」

「In addition, concerns include the impact of record-low temperatures in July, which caused products to remain in inventory across the industry, and weaker consumer sentiment following the consumption-tax increase in October. We therefore expect the industry’s earnings environment to remain challenging.」

「While higher raw-material and logistics costs are expected to have a significant impact on earnings, companies in the industry have announced plans to revise prices for large PET-bottle products. However, sales-promotion expenses continue to trend higher against the backdrop of intensifying sales competition and consumers’ cost-consciousness, and the earnings environment across the industry remains challenging.」

「In response to the spread of e-commerce and the aggressive store-opening strategies of drugstore chains, distribution chains have intensified efforts to increase the added value of their stores, refine pricing strategies, and strengthen sales promotion. As a result, prevailing market prices are trending lower and sales-promotion expenses required to maintain and expand product distribution to stores are increasing, causing the competitive environment to change rapidly.」

「As a result, sales in Japan’s domestic beverage market during the first 3 quarters were strong, exceeding the previous year, but intensifying sales competition accelerated the decline in prevailing market prices and the trend toward higher sales-promotion expenses. In addition, a series of natural disasters brought supply-chain crisis-management issues to the fore, creating a situation in which the business strategies of companies across the industry are being tested.」

「Meanwhile, the domestic beverage business reported lower sales, partly because of the impact of competitors’ aggressive launches of new products.」

「With substantial cost reductions of the kind achieved in the past becoming difficult, the decline in prevailing market prices and the trend toward higher sales-promotion expenses have become increasingly pronounced amid intensifying sales competition, making the earnings environment across the industry even more challenging.」

「In the beverage industry, Japan’s domestic beverage market is unlikely to achieve significant growth as the country’s declining birthrate and aging population advance further. While companies in the industry are pursuing initiatives such as strengthening priority brands and rolling out a diverse range of products with new added value under policies focused on profitability, the operating environment remains challenging, and the industry is required to transform its earnings structure so that it can respond to changes in the times in order to enhance corporate value over the medium to long term.」

「Higher promotional conditions required to secure prime locations affected vending-machine sales,」

「In the beverage industry, significant growth in Japan’s domestic beverage market is difficult to achieve as the declining birthrate and aging population continue to advance. Industry participants are pursuing policies focused on profitability, strengthening key brands and developing a diverse range of products with new added value, but the operating environment remains challenging.」

「Sales and price competition among beverage companies has intensified further as retail-chain mergers and consolidations have strengthened their bargaining power over promotional activities and as highly competitive private-label products have expanded.」

「In the beverage industry, significant growth in Japan’s domestic beverage market is unlikely as the declining birthrate and aging population continue to advance. Although industry participants have begun pursuing profitability improvements, sales and price competition continues, driven by increasingly cost-conscious consumers, stronger bargaining power among retail chains in negotiations over promotional activities, and further expansion of highly competitive private-label products. The operating environment for securing earnings therefore remains challenging.」

「In the beverage industry, significant growth in Japan’s domestic beverage market is unlikely as the declining birthrate and aging population continue to advance. Although industry participants have begun pursuing profitability improvements, sales and price competition continues, driven by increasingly cost-conscious consumers, stronger bargaining power among retail chains in negotiations over promotional activities, and further expansion of highly competitive private-label products. The operating environment for securing earnings therefore remains challenging.」