An employee of a COFCO Coca-Cola venture checks the packaging quality of drinks in a plant in Shijiazhuang, Hebei province. [Photo/Xinhua]

The nation's soft drinks market shrank because of the sluggish demand in the first half of the year, industry analyst said.

Sales in the beverage industry continued to slow down, rising only 2 percent year-on-year in the first half of 2016, according to Nielsen data.

"The economic downturn led to the growth rate decline of the entire retail industry, including soft drinks," said Yan Qiang, a consumer goods analyst at Hejun Consulting Co.

Consumers are turning increasingly to beverages that offer wellness or functional benefits, he added.

Uni-President China Holdings Ltd, the Hong Kong-listed food conglomerate, recorded revenue 7.448 billion yuan ($1.121 billion) from its beverages business in the first six months, representing a decrease of 8.2 percent compared with the corresponding period last year.

The group attributed the falling revenue to moderate economic growth and the rainy weather in the second quarter.

Revenue from the tea drinks business, however, increased 13.6 percent as compared with the same period last year, and juice drinks accounted for 13.4 percent of the entire market share, maintaining second place in the nation's drinks market in terms of sales.

Nielsen forecast that Chinese consumers have growing demand for innovative functional concepts and products with health benefits.

Hangzhou Wahaha Group Co Ltd, the private food and beverage corporation, will continue to develop yogurt targeted at teenagers in the second half of the year.

"Soda is attractive to me, but nowadays I'd like to have orange juice, mango juice and yogurt. Fresh fruit is rich in vitamins and yogurt helps my digestion," said Song Jingwen, an editor at a publishing company.

The revenue of The Coca-Cola Co exceeded $21.821 billion in the first half of the year, down 4.6 percent year-on-year, the company said in its semi-annual report.

Jing Shuiyu contributed to this story.