September 15, 2025 – Widely consumed and loved by many, it is true that carbonated soft drinks have a special place in the drinking habits of consumers. Despite this deeply rooted connection with beverages of this category, obstacles remain in the form of shifting functional targets and finite room for growth. Innovation now intertwines with functionality, with zero sugar and gut-friendly options gaining traction. To understand this better, Innova Market Insights has compiled a report that explores how the category is reshaping, whether future growth hinges on continued consumer relevance, and whether the category’s next momentum comes from underpenetrated regions.
Challenges Facing Carbonated Drinks
Challenges exist for carbonated drinks in the same way that some other categories have seen evolving preferences for healthier living take over. Innova Market Insights has found that 72% of consumers actively limit sugar, evidencing a fundamental challenge for carbonated soft drinks. Further spotlight has focused on more traditional colas in this case, as the formula does not lend itself to the evolving nature of health-conscious consumers. This can limit the possibilities of growth for traditional colas and similar carbonated drinks.
There exists an opportunity in this area, though, as only half of consumers limit natural sweeteners like stevia, suggesting a strategic window for innovation. Sparkling juice brands may be better positioned to capitalize on this by offering lighter sweetness with natural ingredients, perceived as more reasonable to engage with for shoppers’ health. The overarching issue really boils down to reducing sugar and communicating clearly about beverage composition and benefits.
Is Global Growth Subdued Amid Shifting Habits?
Carbonated soft drinks continue to be influenced by inflation and premium perspectives. Although there is a concern with data showing slower growth in sales as incremental gains are made when comparing no consumption changes in consumers with those who decreased their intake. Asia represents an opportunity to expand the carbonated soft drinks category, as local tastes, sugar reduction mandates and growing interest in functional and emotional benefits are having an influence on the market. Given the dynamic growth associated with the region, Asia has potential with rising health awareness and the surge of artificial intelligence (AI). Soft drinks trends show that there is increasing demand in the region for drinks that feel playful and expressive, yet also responsible and functional, a balance that will define success across key Asian markets.
What Can Consumer Preferences Tell Us About Carbonated Drinks?
Carbonated beverages are and continue to be one of the most widely purchased drink categories on a global scale. Research from this report found that half of consumers purchased a carbonated drink in the past year alone and puts the category nearly on par with bottled water and juice. It should be said that traditional sodas are responsible for 45% of the reach in the category. Understanding where and why penetration is happening is key also. In markets such as Mexico, India, and parts of Southeast Asia, affordability and meal-time pairings are boosting uptake. In contrast, consumers in Western Europe or North America are more likely to be swayed by reformulation, nostalgia, or functionality cues.
Soda may reach half of consumers globally, but its footprint varies across regions. In North America and Europe, the category growth there is more about relevance than reach. But outside of these regions, Asia, the Middle East and Africa and Latin America all show lower penetration in the market, and particularly for soda. While communication strategies often tap into shared global themes, it is the local occasions that have more of a pull on purchasing and consumption.
Where Do Opportunities for Growth Exist?
Across generations, purchase rates for carbonated drinks have been consistent. For the younger ones, particularly Generation Z, they are not quite the same as their elders. Soft drinks trends show that younger consumers of carbonated drinks want healthy functionality along with innovative flavor combinations. As for the emergence of such drinks, market opportunities are affected by affordability in comparison to the mature markets. Consumption can be encouraged by repositioning carbonated soda drinks with healthy sugar alternatives, or by growing the sparkling juice segment to capture younger consumers seeking healthier beverages beyond flavored water.
Is There an Opportunity to Expand Consumption Times?
Soft drinks trends reveal that afternoon and lunch remain the dominant consumption times for carbonated soft drinks, but opportunities lie in expanding relevance into mornings and evenings. The functional benefits of sparkling juices may aid this, as classic carbonated drinks like soda are more often consumed in restaurants and with friends or family. The comfort and familiarity of carbonated drinks are ever-present, especially when out with friends or during me-time occasions (snacking, watching TV, having a meal at home). CarConsumers want to find feel-good moments in more parts of their day, and positioning drinks in and around these can be more refreshing.
Soda consumers are motivated not just by thirst, but by the feeling that each sip delivers. Carbonated soft drinks offer quick refreshment through a bold yet pleasant taste. Over a quarter of consumers globally say they drink for happiness or pleasure, not just hydration, which feeds into this idea. So, health would not be a primary driver, although it does have prominence in sparkling juices, where consumers may be cutting back on sugar, but they still expect great taste. While low or no sugar claims top the list of purchasing drivers, flavor, indulgence, and natural ingredients remain close behind. Carbonated soft drinks are not being dismissed casually, but rather need to evolve with consumer curiosity, and as noted previously, flavor is key to entice the next generation
How Much Does Flavor Have an Influence on the Category?
Soft drinks trends show that cola remains the undisputed favorite among carbonated drinks, and with that comes a growing appetite for refreshing variations. There has been notable performance of fruit flavors in carbonated beverages that hold orange or lemon tastes, yet it is the citrus or exotic flavor profiles that are driving the most interest. While opportunities are there for appealing to the nostalgic desires of consumers, it will ultimately be those that evoke memories of fruity classics rather than cola that may maintain appeal for refreshing beverages.
Is It Likely That Market Performance Will Continue This Way?
Global leaders in the carbonated soft drinks market are investing to expand their offerings, with value sales projected to surpass $219 billion by 2027. This is driven by the premium desires of consumers, inflation, and organic demand, particularly in North America, Latin America, and Asia. Therefore, with market projections of value sales expected to rise globally, only regional variations may differ from this. The Asia Pacific region stands out due to genuine consumer demand rather than just price increases. In contrast, Western Europe is experiencing stagnation due to consumer caution and regulatory pressures.
Those regulatory pressures are prompting a response to sugar content and artificial ingredients. So, reform in the way of sugar taxes and labeling laws are leading to declining sales in sugary drinks. This shift is encouraging a move towards low sugar, naturally flavored, and clean label options. In Northern Europe, for example, countries like Norway, Belgium, Germany, and the United Kingdom hold a high per capita consumption. With that said, emerging soft drinks markets will benefit from a rising middle class and urbanization, presenting influential growth opportunities due to currently low consumption levels.
What’s Next for Carbonated Soft Drinks Globally?
It would seem that what the category can expect is more prominence of flavor as an asset in drinks. A nod to locality or nostalgia will have influence over purchasing decisions too, while in regions like Asia, it is likely that lifestyle benefiting innovations or limited edition carbonated soft drinks and juices will take off. More carbonated soft drinks with functional benefits, especially gut-healthy claims, such as fiber and prebiotics, are evidently part of future portfolios. As for sugar, the scrutiny continues, and new sweetener blends will help reshape zero sugar sodas. Last but not least, AI will start shaping soda creation, personalization, and smart vending at scale.
This article is based on Innova’s Overview in Carbonates in Europe report. This report is available to purchase or with an Innova Reports subscription. Reach out to find out more