Beverage market analysts Zenith International said that combined sales volumes from the US, Western European and Japanese markets for RTD coffee amounted to 3.1bn litres in 2006, a figure expected to rise in the coming years. RTD beverages relate to pre-made formulations for retail shelves and fridges, though for research purposes did not include coffee flavoured beverages, Zenith said. Japan, said to be the birthplace of the concept, still accounted for 88 per cent of total global demand, though this market is expected to decrease by 2011, with North American and European markets taking up the slack. Zenith market intelligence director Gary Roethenbaugh said that the change in global consumption was being driven predominantly by strategic partnerships and marketing drives in Europe and North America. "While Japan's maturing market is forecast to decline by one per cent a year up to 2011, we expect to see compound annual growth of nine per cent in West Europe and six per cent in North America," the analyst stated. By 2011, North America's share of the total RTD coffee market is expected to rise to 11 per cent from eight per cent currently, while Western Europe will hold a five per cent share, up two percentage points over current levels, according to Zenith. However, while Europe remains some way behind North America in terms of demand, some markets such as Austria and Norway are expected to post consumption rates that outstrip those in the US, the analyst added. Zenith said that the growth reflected an emerging pattern within the RTD coffee market during 2007 that saw leading multinational beverage groups succeeding in offsetting health concerns over the product to broaden its appeal in the process. "RTD coffee companies have moved on from merely tweaking the coffee-sugar-milk ratio to appeal to different consumer tastes," stated Roethenbaugh. "They are now focusing on a whole new generation of consumers by balancing sometimes conflicting demands for products that are weight and health conscious, energy boosting, indulgent and perhaps also offer added functionality." The analyst added that benefits such as natural caffeine content could appeal to the growing market for energy drinks, while even high sugar beverages when combined with premium coffee could be sold as an "indulgent treat". This drive to promote the segment as more of a functional and nutritious beverage alternative has resulted in manufacturers courting leading coffee brands to play up the natural properties of their RTD products, Zenith said. It is not just in the area of innovation though where manufacturers are needing to be successful. Distribution strength is another vital part of succeeding in the market with Zenith using Coca-Cola as an example. While the soft drink giant is a leader in the Japanese RTD coffee market with products like its Georgia Brand's GABA coffee, it has struggled to transfer its presence to the US market, where rival PepsiCo's partnership with Starbucks is king. The next big battle ground is now expected to be in China where Pepsi distributes Starbuck's Frappucino brand ahead of Coca-Cola's imminent launch of its own partnership with Italy-based Illycaffe, the analyst added.