The soft drinks market in Israel is growing by 10% a year and will reach 1.3 billion litres by 2008. In particular, the country boasts a robust and thriving teenage soft drinks sector, boosted by constant sunshine and increased marketing activity. Alan Osborn reports.

According to global consumption figures, Israel is the world capital of teenage soft drink demand, with hot weather combined with a competitive market creating something of a utopia for drinks marketers.

An international survey of soft drinks consumption by 15 year olds of both sexes, published by the Economist, suggests that Israel has the world's biggest teenage consumption of carbonated and still drinks, colas, sodas, juices and the like on a per capita basis. The 2005 edition of the Economist's World in Figures shows that as many as 58.7% of Israeli boys and 54.4% of girls drink a soft drink every day.

The appearance of Israel at the head of the table is a little unexpected at first sight since the country is not normally associated with the teenage behaviour patterns familiar in western countries. But weather has a great deal to do with it, says Mr Zvi Goldstein, director of the Israeli food industry association - part of the national manufacturers association of Israel.

In an interview with just-drinks.com, Goldstein said: "You should take into account that Israel is sunny nine months a year and very hot for at least six months." The Israelis were always amazed by, among other things, the amount of wine consumed in France and beer in Belgium, he said, "and so it is with soft drinks in Israel," he said. "We drink all kinds of beverages like juices, like sparkling waters, soda, colas and so on."

One factor that has almost certainly pushed Israeli consumption upwards in the past two years was the entry of the multinational soft drinks producer, Virgin Group, into the market in May 2003. Virgin signed an agreement with Super Drinks, a soft drinks producer with plants in Jerusalem, for production and sale of a wide range of products, including colas, lemon and orange carbonates, iced tea and juices.

An Israeli government spokesman said there were no health warnings about the health and dental effects of sweetened soft drinks on young people "but there is a programme to encourage people to eat and drink wisely and maintain a balance." Because of this, consumption of bottled mineral waters is rising faster than that of soft drinks generally. "The trend is from soft drinks to water and juices but the overall level of consumption is growing quite quickly," the spokesman said.

Nearly all soft drinks consumed in Israel are manufactured and bottled in the country, though often sold under international brand names. Coca-Cola and Pepsi are prominent and highly popular nowadays though both the American companies have been affected in past years by politically-inspired boycotts. Pepsi in fact honoured an Arab-led boycott until 1992 and there used to be a saying: "Coke is for Jews; Pepsi is for Arabs." These days both brands are equally obtainable anywhere in the Middle East.

A survey by Euromonitor shows that in 2003 about three quarters of soft drink sales in Israel were through off-trade channels, and this was by far the fastest growing sector. Within this, bottled water was the most dynamic type of product following a surge in sales in 2001 when concerns were expressed over the quality and safety of tap water.

According to Euromonitor, sales of bottled water exceeded sales of carbonates for the first time in Israel in 2003. More general concern over health has brought about a large increase in fruit juice sales at the expense of carbonates though the latter have maintained a steady 2.5% annual growth rate in recent years.

The research organisation said that off-trade sales of soft drinks tended to be made through one of two channels - supermarkets/hypermarkets or other food stores. For all drinks the supermarket/hypermarket outlets were the more important though sales in them varied between drinks: 62% of all sales for instance;, 65% for bottled water and 79% for functional drinks.

Euromonitor said further growth was expected in the Israeli soft drinks market with off-trade volume sales increasing by 10% a year, expanding the market to almost 1.3 billion litres by 2008. It said that bottled water and fruit/vegetable juice sales looked set to continue to perform well over the forecast period and both sectors were likely to benefit from growing interest in healthier lifestyles. An expected economic recovery in Israel should "positively affect the consumption of soft drinks, mainly premium soft drinks like 100% fruit juices, which are relatively expensive, and other premium products," it said.