Major potential for new age beverages

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Conservative drinking habits in Europe have held back sales of new
age beverages, according to Datamonitor.

The number of so-called new age beverages available across Europe has been growing steadily in recent years, but the market shows little sign of reaching saturation point, according to a new report from Datamonitor.

The conservative drinking habits of European consumers mean that new age beverages (herb- or juice-based drinks or iced tea and coffee) account for a small proportion of the European drinks market, according to the report, The European Soft Drinks Market to 2006​.

But with the soft drinks sector as a whole becoming increasingly stagnant, the new age beverages sector stands out as a major growth area for the future. In value terms, sales grew by 10.2 per cent between 1996 and 2001, the report said, while volumes increased 9.7 per cent. But the market as a whole remains small, with only iced tea having any substantial sales.

New age beverage sales differ radically across the continent, according to Datamonitor. Eastern Europe has not yet caught new age fever and there is little market penetration there. In the rest of Europe, wide variations exist - Sweden's market was worth $12.1 million (€11m) in 2002, for example, but neighbouring Finland sold three times that figure.

Despite its relatively small population, Switzerland has the largest new age beverages sector in Europe, accounting for almost a quarter of the market. Moreover, in consumption terms, the average European drank 6.46 litres of new age beverages in 2001, while the average Swiss drank 107.48 litres.

Growth may be in double figures for the new age beverage sector, but it still has a long way to go before it reaches the level of success seen by carbonates. Fizzy drinks account for more than 40 per cent of the European soft drinks market, Datamonitor said.

But it is bottled water, the second largest sector of the European soft drinks market, which will provide the new age beverages sector with its greatest competition, the report claims. Sales of bottled water are expected to continue growing on the back of rising awareness of the health benefits associated with consuming water - a factor which has traditionally been a strong selling point for new age beverages as well.

The increased demand for diverse foreign flavours will provide some impetus for new age beverage market growth, Datamonitor​ said, but while consumers are willing to try new flavours, different types of drink are faced with some caution. Market growth for new age beverages will come with the increased acceptance of these goods as a healthier and more flavoursome alternative to carbonates or water, the report concludes.

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