UK soft drinks weathering downturn - report

By Neil Merrett

- Last updated on GMT

Related tags: Soft drink, Bottled water, Cent, Drink, Carbonated water

British demand for soft drink products has coped with both the unpredictability of the current economic climate and the seemingly more familiar wet weather, to post slight sales value growth in 2008, according to official industry figures.

The British Soft Drink Association (BSDA) says the non-alcoholic beverage market in the country was able to maintain growth during 2008 as value rose by one per cent, despite a decline in sales volumes of the same amount.

These changes saw annual sales reaching £13bn (€14.8bn) for the year, with total volume consumption at 13,905 million litres, states the BSDA’s 2009 UK soft drinks report.

Turnaround

Pointing to its findings, the association says it did not yet project the beginnings of a turnaround, with consumption recovery not expected until the end of the year, meaning any possible growth for the wider soft drink sector would not occur until 2010.

However, by 2013, the BSDA said it predicted total demand to increase to about 14,890 million litres, this amounted to 239 litres on a per person consumption basis.

Jill Ardagh, director general for the trade group, said that burgeoning markets such as the functional beverage sector had helped lift industry revenues during the twelve months, alongside a health and convenience push by manufacturers.

Ardagh claims that the growth across the industry has been particularly encouraging following two wet summers across the UK and ongoing concerns over economic stability.

“Consumers are loyal to the drinks they know and trust but remain open to innovative products and brand extensions which meet their ever-evolving needs,”​ she stated. “The industry’s ability to provide the public with a wide range of enjoyable and affordable drinks will ensure it remains resilient despite the tough climate.”

Trends of 2008

In terms of the key trends influencing the industry in 2008, the report suggests consumers were increasingly varying their purchases between potential convenience and natural benefits, as well as considering value.

In this market place, the group said that functional products had particularly benefited as the energy and sports posted an 11 per cent hike in demand. Volumes for so called ‘enhanced waters’ rose by 21 per cent during the year, according to the report.

Even the more traditional carbonated beverages segment posted a 1.7 per cent increase in sales volumes, while retail value for still and juice based beverages rose 0.8 per cent amounting to £1,684m (€1,907m) during 2008.

The BSDA claimed that health and wellbeing had been another important factor in the drink preferences of consumers as volumes of not from concentrate fruit juices rose by 10 million litres to account for 45 per cent of the chilled juice market.

Depsite the interest in seemingly healthier products, retail value of the juice segment fell four per cent in the UK during 2008 with smoothie volumes also falling by 20 per cent on the back of the economic downturn, stated the report.

“On top of the poor weather and a declining economy dampening demand, bottled water had a challenging year in the media spotlight,”​ stated the BSDA report. “Having witnessed core growth over more recent years, bottled water reported a decline for the second year running, 5.5 per cent down on 2007 volumes. 2009 is likely to be another challenging year for bottled water and but it should return to growth in the longer term.”

Related topics: Soft Drinks & Water

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