Economic Impact on Beverage Consumption in Developing Economies

Sammanfattning: This study aims to find out the long-term relationship between macroeconomic factors and beverage market volume in different countries from 2005 to 2020. Per capita market volume is investigated in aggregated form to gain a clear understanding of the impact on beverage products, covering product type, product process, product distribution per country, and given period. According to the current literature on demographic and macroeconomic factors influencing food and beverage consumption, population, education level, GDP, income, or price levels are some of the key major determinants of beverage consumption. Unlike most studies that have focused on national data, such as US data and alcohol consumption, which discovered alcohol consumption to be pro-cyclical with macroeconomic factors, this paper adds to the limited existing literature on beverage consumption by identifying the key macroeconomic factor that accounts for variations in beverage market volumes of milk, 100% juice, coffee or tea and sugar-sweetened beverages in developing economies. The study analyses cross-national data of 112 countries where data is available in between 2005-2008 (inclusive) with fixed effects panel data approach separately for developing and developed economies. The results show that GDP per capita has a greater positive effect on beverage consumption in developing economies than in developed economies, with coffee or tea and sugar-sweetened beverages having the greatest effect and milk products having the least.