The carbonated soft drinks industry in 2025

The carbonated soft drinks (CSD) industry continues to go through a period of rapid transformation in 2025. Driven by shifting consumer preferences, technological advancements, and global sustainability goals, the market dynamics are evolving at an unprecedented pace. This blog explores the latest trends, innovations, and challenges facing the industry.

Market Overview: Growth & Regional Performance

In 2025, the global carbonated soft drinks market is valued at approximately $295 billion, with an annual growth rate of 3.8%¹. The industry still continues to recover from the pandemic’s disruptions, but regional variations persist.

North America: The market is stabilising, with health-conscious consumers driving demand for sugar-free and low-calorie options. Sales are projected to grow by 2.5% in 2025¹.

Europe: A mature market experiencing slow growth (1.9%²), influenced by stringent regulations on sugar content and labelling.

Asia-Pacific: The fastest-growing region, with an expected growth rate of 5.7%, fuelled by rising disposable incomes and urbanisation in countries like India, Indonesia, and Vietnam¹.

Latin America: Experiencing a resurgence, with growth pegged at 4.2%, driven by innovative product launches and premiumisation trends¹.

Key Consumer Trends

Health and Wellness Focus: The health-conscious movement will continue to feature heavily in 2025. Consumers are increasingly scrutinising ingredient lists, leading to the rise of natural sweeteners, functional beverages, and reduced-calorie options. According to a Nielsen survey, 64% of global consumers prefer drinks with no added sugar or artificial ingredients.

Personalisation and Niche Flavors: Customisation is a major driver. Brands are leveraging AI-driven technologies to offer tailored flavour profiles based on consumer preferences. Exotic and nostalgic flavours are gaining traction, with variants like “elderflower and lime” and “cola with a spicy kick” emerging as popular choices.

Sustainability Consciousness: Eco-friendly practices are non-negotiable in 2025. In 2019 a Nielsen survey (Neilsen IQ global sustainability report 2019) indicated that around 73% of global consumers state that they prefer brands committed to sustainability and this is likely to increase over the coming years. Companies are responding by adopting sustainable packaging solutions, such as biodegradable bottles and aluminium cans with minimal carbon footprints and exploring ways to reduce water waste.

Premiumisation: Premium CSDs are gaining momentum as consumers seek unique drinking experiences. Premium offerings, such as Coca-Cola’s Signature Mixers range, along with brands such as Fever-Tree and Olipop, which often feature craft-style production, natural ingredients, and limited-edition packaging, now account for 15% of the market⁴.

Product Innovations

The push for innovation in the CSD sector continues to grow as brands look to innovate to retain market share and competitive advantage. Some trends worth mentioning are:

Functional Beverages: Functional carbonated drinks infused with probiotics, adaptogens, and vitamins are a standout trend for 2025. Brands like PepsiCo and Coca-Cola are experimenting with energy-enhancing and immunity-boosting formulations to cater to the wellness market.

Natural Sweeteners: The use of natural sweeteners such as stevia, monk fruit, and allulose is becoming mainstream. The use of stevia in beverages continues to grow steadily, though it remains a niche segment in the global market. Stevia-based drinks accounted for approximately 5% of the global carbonated beverage market in 2024, reflecting growing consumer interest in natural sweeteners. While its share is smaller compared to traditional sweeteners, the segment is expanding at a compound annual growth rate (CAGR) of 7.6%⁵, with increasing adoption in health-conscious and functional drink categories.

Hybrid Beverages: Hybrid drinks that combine elements of traditional CSDs with sparkling water, teas, or juices are becoming increasingly popular with health conscious consumers. For example, sparkling tea sodas and juice-infused colas are growing categories, especially among millennials and Gen Z.

Alcoholic CSDs: The hard soda segment continues to expand. The global hard seltzer market was valued at around $19.33 billion in 2023 and is expected to continue to grow by a CAGR of 12.4%⁶ . Hard seltzers and alcoholic colas are reshaping the boundaries between soft drinks and alcoholic beverages and are here to stay.

Zero-Waste Products:To tap into consumers desire for more sustainability from global companies, brands are innovating with zero-waste solutions, such as refillable soda systems and concentrated syrups for at-home carbonation. SodaStream’s new line of flavour concentrates, designed to minimize packaging waste, is a notable example.

Sustainability

The CSD industry faces mounting pressure both for a regulatory perspective and as mentioned above, from consumers to adopt sustainable practices. Key initiatives include:

Carbon Neutrality: PepsiCo has pledged to achieve net-zero emissions by 2040, and Coca-Cola aims for carbon neutrality by 2050. Smaller brands like Olipop are leading the charge with innovative eco-friendly operations.

Sustainable Packaging: The industry is moving towards 100% recyclable materials. Coca-Cola’s “World Without Waste” initiative aims to collect and recycle a bottle or can for everyone sold by 2030.

Water Stewardship: Water usage is a critical concern. Many CSD manufacturers are investing in water-saving technologies, such as closed-loop systems and rainwater harvesting, to ensure sustainable sourcing as well as working with local communities globally to have better water stewardship.

What are the challenges?

Regulatory Pressures: Governments worldwide are imposing stricter regulations on sugar content and advertising. For instance, the European Union’s Nutri-Score system is influencing reformulations and labelling strategies.

Competition from Non-Carbonated Drinks: Rising popularity of non-carbonated alternatives, such as flavoured waters and plant-based beverages, presents a challenge. However, hybrid beverages and functional CSDs provide drinks manufacturers with an opportunity to bridge the gap.

E-commerce Expansion: Online channels are reshaping the retail landscape. In 2025, e-commerce accounts for 15% of global CSD sales, up from 8% in 2020. Subscription models and direct-to-consumer platforms are becoming more common.

Technological Integration: AI and IoT technologies are being utilised to optimise production, monitor consumer trends, and create personalised marketing strategies. Smart vending machines equipped with AI are enabling on-the-go customization of flavours.

Looking to the future

The successful future of the CSD industry lies in innovation, sustainability, and adaptability. Brands that prioritise health-focused products, embrace eco-friendly practices, and leverage technology to meet consumer demands are poised for success.

By 2030, the market is expected to surpass $350 billion, driven by continued growth in emerging markets and evolving consumer preferences³. Companies that stay ahead of the curve by innovating, offering unique experiences, and clearly demonstrating their sustainability credentials (without greenwashing!) will solidify their positions as industry leaders.

CO₂Sustain’s product range offer drinks manufacturers a simple, cost effective and innovate way to improve their CSDs. Contact us to find out how we can work with you to take your drinks to the next level, either email us on info@co2sustain.com or call us on +44 (0)113 465 4601

Sources:
¹ Market Research Future, 2025
² Beverage Daily
³ Global Beverage Market Outlook, 2025
⁴Global Premium Beverage Report, 2025
⁵Global Stevia Drinks Market 2025, Global Info Research
⁶Hard Seltzer Market: Industry Analysis & Forecast, Maximize Market Research