Czech Republic sees explosion in energy, functional drinks

Related tags Soft drinks Czech republic Soft drink

Sales of soft drinks in the Czech Republic are rapidly catching up
with western Europe markets, being boosted by increasing consumer
interest in health, shows a new report from market analysts

This growing awareness of the health benefits from diet has been one of the main drivers of a 40 per cent rise in volume of off-trade soft drinks over the past three years, leading to greater demand for products such as multivitamin juice drinks, reduced sugar content, products enriched in fibre and vitamins and chemically pure goods.

The Czech Republic is one of the most developed food markets in Central and Eastern Europe, and according to Euromonitor, the market for soft drinks is currently one of the most dynamic in the Czech beverages industry.

A number of factors have made the growth in soft drinks possible. The increased availability of drinks sold in PET bottles has made the price of soft drinks in larger sizes more attractive, as well as making storage and handling for retailers much easier. PET accounted for 79 per cent of all soft beverage sales in the country during the course of 2003.

The expansion of multiple stores and growing household incomes have also fuelled consumer expenditure on soft drinks.

While carbonates and bottled water account for 81 per cent of overall off-trade volume sales, fruit and vegetable juices make up 10.6 per cent. All the soft drinks sectors benefited from growing consumer interest in healthy living and high levels of market development by the manufacturers, contributing to the growth of the functional drinks sector in particular.

In the fruit/vegetable juice sector cheaper juice drinks with up to 24 per cent fruit content and enriched in multivitamins has become the most dynamic category.

Sports and energy drinks have also seen rapid growth in both volume and value terms, albeit starting from a low base, thanks to the increasing influence of media coverage and often controversial promotions, notes the report. The on-trade was taking an increasingly large share, reaching a forecast 63 per cent of volume sales in 2003. This was driven by the growing trend among young people to mix these functional drinks with alcohol.

The domestic producers in the Czech market have proved to be strong competitors and lead in a number of sectors, most notably in fruit juice and bottled water.

Czech companies have modernised their production lines and invested heavily in product assortment, packaging, and promotion. They have also had the benefit of a lower price point and the long-established tradition of many of their more popular brands.

Karlovarske Mineralni Vody was the leader of the soft drinks market in 2002, followed by General Bottlers and HBSW. The leading seven companies - the three above-mentioned players as well as Walmark, Coca-Cola, Hanacka Kyselka, and Santa Napoje Krnov- controlled 53 per cent of the soft drinks market in 2002.

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