Heatwave accelerates soft drink growth rate

Although 2003 began with snow, temperatures in May were the highest since 1976 and reached record levels during August, and this contributed to a 7 per cent increase in total UK soft drink consumption in 2003. Climate-sensitive categories such as still water, still drinks and squashes/syrups all took advantage of the conditions.

Despite the strong growth in these categories, carbonates remained the largest single segment, according to Canadean, itself growing by 5 per cent during the year despite its sometimes less healthy image. In fact, Canadean's report shows that the increasing trend towards healthier products - which has boosted sales of bottled water in particular over the last few years - has had no negative impact on sales of sugary carbonates, with new product innovation and their continued 'refreshing' image keeping consumer interest in the segment as high as ever.

One category which definitely benefited in particular from the hot weather was tonics and mixers, which had seen declining volume sales in 2001 and 2002. An 8 per cent increase in sales in 2003 was largely due to retailers' own label products, Canadean said, which responded particularly well to price promotions.

The second largest category, squash/syrups, is also the most mature. With the exception of France, squash/syrups are a British phenomenon and consumption is very closely linked to the weather - although consumption has increasingly been influenced by the convenience of such products (driven by the introduction of resealable packaging and handy-size packs) and the fact that they have a healthier image than carbonates.

The category also offers great value for money, a factor which has helped make it particularly popular with mothers, the report suggests.

But even in this most mature of markets, there is still plenty of change, with mixed fruit squash overtaking orange as the most popular flavour, accounting for over a third of total volume - evidence, claims Canadean, of the UK's increasingly cosmopolitan tastes.

But the simplicity, convenience and healthiness of water meant that it was the star performer in 2003 - as indeed it had been for the previous decade. Canadean said that packaged water consumption was almost two and a half times greater in 2003 than it was in 1994, with still water in particular proving popular: sales rose by 20 per cent during the year.

But this meteoric growth has made only a minor dent on take home sales of other soft drink products, and UK consumption of packaged water remains well short of that in western Europe, indicating that there is still plenty of room for future growth.

Several other categories, including juice, nectars, still drinks and sports/energy drinks, also offer enormous potential, according to Canadean, provided manufacturers are prepared to invest sufficiently in advertising and promotion - vital in such as well-established and increasingly crowded category.

Potential hindrances to growth such as health concerns and poor weather are expected to be easily shrugged off, and Canadean predicts a volume increase of around 3 per cent in 2004.

For details of how to order your copy of the Canadean's 'UK Soft Drinks Report 2004', click here​.​