Health to drive growth in UK drinks market

By Rod Addy

- Last updated on GMT

Related tags: Soft drinks, Coca-cola, Soft drink

The performance of the UK soft drinks market will continue to improve over the next three years, despite a shaky record since 2007, according to commentators and industry bosses.

Speaking at a recent soft drinks conference in London, Garrett Quigley, general manager for PepsiCo Beverages in UK and Ireland, said: “We would see modest growth in the UK market, driven by health.”

The market had defied expectations to grow 1.7% in volume to 14.1bn litres in 2009, according to Victoria Milne, senior analyst at market intelligence firm Zenith International.

Milne said she expected the overall performance of soft drinks to continue to improve in value and volume. She predicted slight growth up to 2013, when the market would reach 14.84bn litres. “The green shoots of economic recovery should hopefully favour the market and the industry is expecting a boost in consumption for the 2012 Olympics.”

However, Simon Baldry, md for Coca-Cola Enterprises, was more optimistic, saying: “If we fundamentally change the way shoppers treat this category, we have the opportunity to grow it substantially more than the slim rates quoted earlier.”

Market leaders

The biggest section of the market – 42.9% – was occupied by carbonated drinks, whose share had fallen from 47.1% in 2004, said Milne. However, sales of carbonated soft drinks had risen 2.2% by volume to 6.07bn litres last year, indicating a resurgence in that market, she said.

Smoothies had seen a double digit decline in volumes in 2009, but Milne said: “I believe health and five-a-day [fruit and vegetable portion consumption] awareness will boost the category going forward.” ​The diversity of the still and fruit juice drinks category had kept it buoyant, she said.

Stimulant energy drinks was a category to watch in the coming year “driven by continuous innovation”​, said Milne. Big brands such as Monster were leading the way in terms of sales. Meanwhile, the cola category remained robust, with brands performing better than own label.

Dilutables had a good year in 2009, increasing volume sales by 3.1%. Here, diet variants were leading the way, a trend that would continue in 2010, said Milne.

On the other hand, fruit juices took a hit, falling 3.1% in volume, with their high price point often repelling consumers.

Related topics: Markets and Trends

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