Rain dampens Italian soft drinks growth
market to around half that seen in previous years. But, according
to Canadean, the glitch is likely to be temporary, with plenty of
growth expected in the years to come.
The unusually poor summer weather last year took a major toll on soft drinks sales in Italy, with per capita consumption inching up just 1 per cent - less than half the growth rate seen in the previous five years.
But according to a new report from beverage industry analysts Canadean, the overall picture remains positive, with total consumption likely to reach 14.7 billion litres - a 32 per cent increase over the last decade.
Furthermore, barring another very poor summer, the report predicts that consumption in 2003 will increase by an additional 2.4 per cent to 15 billion litres.
On a sector level, packaged water and carbonates dominate the Italian market with a combined 89 per cent share of throat. Italy is firmly established as western Europe's leading market for packaged water and boasts the world's highest per capita consumption.
Distinctive brand positioning and strong new product activity, combined with deteriorating tap water and water supply problems during dry weather should help support strong future performance, Canadean said.
Conversely, carbonates have been stifled by a pre-occupation with the stagnant cola segment, a lack of product innovation and a continuing trend among Italians towards healthier lifestyles. Consumption of carbonates is now only around two-thirds of the average for western Europe, the report shows, but carbonates still remain an important component of the soft drinks market.
Cola is the most popular carbonates flavour, accounting for over 40 per cent of the total. The only other significant flavour is orange, while the rest of the market comprises a myriad of smaller volume alternatives. Although it is still a young segment, and volume is relatively insignificant, bulk/HOD water (bulk water sold for use in coolers and water bottled on site for use in Horeca outlets) is by far the fastest growing sector, the Canadean report said.
The dominance of packaged water is underlined when examining the leading soft drinks brands. Nine of the top ten are primarily waters, with Coca-Cola the only exception. Extremely aggressive promotional activity employed by Nestlé helped maintain the market-leading position of its Levissima brand.
As far as the preferred packaging format is concerned, non-refillable packaging has consolidated its position and now commands an estimated 86 per cent share of the market. In addition, PET continues to grow at the expense of glass. PET now accounts for 73 per cent of all soft drinks packaging with further inroads expected to be made during 2003. The use of cans remains static at around 3 per cent of the market, while cartons continue to lose popularity in every sector.
The Canadean report also shows that the Italian soft drinks market remains fiercely competitive and a hotbed for merger and acquisition activity. Pepsico's takeover of Quaker Oats Beverages, Unilever's acquisition of Bestfoods and the incorporation of Del Monte by Cirio were among the notable examples. The market continues to attract new activity, with Nestlé and Danone entering the bulk/HOD sector and Coca-Cola joining the sports drinks market.
For more information about Canadean's report The Soft Drinks Service - Italy, and others, click here.
