Special edition: Beverage processing

Beverage machinery market tipped for rebound

By Guy Montague-Jones

- Last updated on GMT

Related tags Economics

The market for beverage processing machinery slumped last year but indications are that 2010 will mark a recovery as suspended or delayed projects are taken up again.

According to the German Statistical Bureau, the production value of German beverage machinery in 2009 amounted to €1.7bn – 66 per cent of the 2008 figure.

This statistic is not an entirely accurate reflection of the market as much of the equipment used in beverage processing, such as pumps and valves, is used for other applications and is accounted for in other categories. However, the figures give some indication as to why beverage machinery specialist Krones called 2009 the most difficult year in its history.

Tough year

Last year was tough for all sectors of the machinery construction industry, but beverage had a particularly difficult 12 months, according to Uta Kiefer, a spokesperson for the VDMA Food Processing and Packaging Machinery Association.

Kiefer said big production lines sold in one piece take a big share of sales in the beverage industry. In a recessionary environment this puts beverage at a disadvantage compared to other sectors as credit problems and market uncertainty put a stop to big projects.

By comparison Kiefer said other sectors of the food and beverage industry like confectionery, where smaller projects are the norm, had an easier job of coping with the recession.

However, indications are that things are now beginning to look up. Although no general market figures are yet available for 2009, Kiefer said: “From what I hear and see I get the impression that this year is a lot better. Suspended or delayed projects are picking up again.”

Shoots of recovery

Back in 2009 projects were put on hold even in parts of the world where economic growth remained robust because of problems accessing credit. But now that the health of financial markets has improved and a better mood has returned to the beverage sector, investment projects are starting up again.

Concrete evidence of this is beginning to show up in recent financial results for the first six months of the year. Krones, for example, said its sales climbed in the first six months of 2010 by 16.4 per cent to €1,076.2m and growth in the second quarter accelerated to 22.8 per cent.

As for the long-term prospects for the beverage processing and packaging sector, market research forecasts give little reason for concern. Driven by population growth and continued urbanisation, Euromonitor predicts 5 per cent annual growth through to 2013 for non-alcoholic drinks and 4 per cent for beer consumption.

For manufacturers of beverage equipment the growing markets in Asia, South America and Eastern Europe are expected to be key drivers.

Meanwhile, in the more saturated Western European markets, innovation is vital to improving sales prospects. According to the organisers of beverage machinery trade fair Brau Beviale, market priorities are reduced complexity of design, lower operating costs and greater energy efficiency.

Related topics Processing & packaging

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