No miracles forecast for flat Western European beverage market

By Guy Montague-Jones

- Last updated on GMT

Related tags: Soft drink, Alcoholic drinks, Alcoholic beverage

Canadean expects Western European beverage volumes to once again contract in 2010, albeit with a slight slowdown in the rate of decline.

Consultants at the market intelligence firm anticipate the smallest of reductions in overall volumes in 2010, compared to a 0.4 per cent dip last year. In addition, only France and Sweden are expected not to register an improved volume performance next year.

“The market does seem to be going in the right direction if only slowly,”​ commented Canadean said.

Alcoholic improvement

Improvement in the rate of decline is expected to come largely from the alcoholic drinks sector, which was hit hardest last year by the recession. In 2009, alcoholic drinks volumes fell 2 per cent and they are tipped top retreat only by 1 per cent in 2010.

West Europeans went out to eat and drink a lot less in 2009 and this had a big impact on alcohol sales. Beer was one of the big sufferers within the alcohol segment, enduring a 3 per cent volume decline as on-premise sales dropped off.

Meanwhile, sales of soft drinks are not expected to advance significantly next year despite doing better than other categories in 2009. Weather plays a big role in soft drink sales and in 2009 resistance to the economic gloom came largely from a summer that was hotter than the previous year.

Soft drink categories

Within soft drinks, water is tipped for another loss while fizzy drinks, which account for 30 per cent of Western European volumes, are predicted to enjoy another year of growth. The carbonate category benefited from a shift from on to off premise sales, with more consumers buying bigger unit sizes to take home and drink.

In 2009, squashes, which are a small soft drink category, did well with volumes climbing 3 per cent. This year, their “value for money” status is again expected to keep sales up, but the rate of growth is expected to dip to less than 1 per cent.

Meanwhile, hot drinks are expected to maintain steady low growth in 2010 and the rate of decline for dairy drinks is forecast to slow slightly. Canadean said that both categories are not as influenced by economics as other beverage categories.

But the research firm said there is some weight to the argument that people drink more hot drinks in they stay home. As more people are resisting the temptation to go out in the recession, this could help explain the growth in hot drink sales.

canadean

Related topics: Markets

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