Aseptic filling storming soft drinks market

Related tags Soft drinks Cott Soft drink

Cott Corporation, the world's biggest supplier of private label
soft drinks, will join the growing club of aseptic producers after
buying Britain's Macaw group - offering new opportunities for
health products and better margins.

Cott said it had bought Macaw, the UK's largest private producer of own-label carbonated soft drinks, for £75.7m (€110.3m).

The deal gives Cott a first inroad into aseptic drinks production, a fast-emerging technique among soft drinks producers because of its ability to satisfy growing consumer demand for non-carbonated and healthier products.

Andy Murfin, managing director of Cott's UK and Europe divisions, told​ that demand for aseptic production lines would push the category's growth into double figures over the next few years.

He said aseptic production was a good way of targeting fast-growing sectors like energy drinks and bottled water.

It enables firms to position products within the general health and well-being trend by allowing drinks to be made without preservatives and with a high juice content. It also helps firms to add value to products by fortifying drinks with vitamins and minerals.

Demand for bottled water, juice and energy drinks is soaring in the UK. Bottled water market volume rose 50 per cent between 1998 and 2004, compared to less than six per cent growth for carbonated drinks, according to a recent report from Euromonitor​.

And a new report from Mintel​ says energy drinks, such as Red Bull and Lucozade, will account for £1 in every £5 that Britons spend on soft drinks by the end of 2005.

Macaw has used its aseptic production line to launch its H2 energy and water drinks, but says it has also used the facilities to help out branded producers such as Ocean Spray.

Murfin said Cott would look to continue using Macaw's aseptic filling line to help branded players, and that the acquisition as a whole is expected to improve Cott's UK sales by 50 per cent.

Cott spokesperson Kerry Morgan said Macaw should become earnings enhancing for Cott within a year. And the group believes opportunities to create more added-value products via aseptic production should also help margins.

Morgan said Cott was close to working at full capacity in the UK. The deal with Macaw will now increase Cott's UK production lines from 11 to 17, enabling it to better serve ever more demanding retailers.

The group, like many other food and drink producers, has come under heavy pressure from raw materials and energy costs - notably petrol and PET resin. Both of these are made using oil, which has seen dramatic price rises in recent months.

Cott's UK and Europe sales rose 7.5 per cent (4.7 per cent excluding favourable exchange rates) in the first half of 2005, while regional operating margins dipped by about 0.6 per cent. But, the group's global net profits dropped by around a quarter to £18.3m (€26.7m, $33.3m).

For more information on factory conditions needed for aseptic production, see last week's article on

Related topics Markets Soft Drinks & Water

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