Refreshing Outlook for Fruit Juices and Juice Drinks
UK fruit juices and juice drinks consumption remains buoyant after fiveyears of continuous growth and a number of acquisitions have consolidated the marketplaceboth nationally and internationally.
The fruit juices and juice drinks(containing between 5-25% juice) market increased by 4% in both volume and value last yearto reach 1.37 billion litres with sales worth £1.4 billion, according to Leatherhead FoodRA. Pure fruit juices represent the lion's share, accounting for 68% of volume and71% of market value.
Within the fruit juices sector, long-lifeis the main category representing about three-quarters of volume sales with chilled juicesholding the remainder. Tropicana is the brand leader in the chilled juices market althoughprivate label is dominant with about 67% of sales. Gerber is the largest player in thejuices and juice drinks market as a whole.
Table One: Fruit Juice Market by Volume andValue, 1994-98
Source: Leatherhead Food RA.
Table Two: Juice Drinks Market by Volumeand Value, 1994-98
Source: Leatherhead Food RA.
New product development and brand activityhave been stimulating consumer interest and consequently increased sales of fruit juicesand juice drinks. Recent innovations include the introduction of a new premium chilledorange juice (Minute Maid) by Danone/Coca Cola, while on the juice drinks side GerberFoods has launched Ocean Spray in distinctive Tetra Prisma packs; and Smithkline Beechamunveiled Ribena Tooth Kind, a range of ready-to-drink cartoned fruit drinks. Also withinthe juice drinks sector, Britvic introduced a range of ready-to-drink cartoned fruitjuices under the Robinson's High Juice brand, and Just Juice launched a range ofcranberry juices in cartons. The biggest launch last year, however, was Procter &Gamble's new range of chilled citrus fruit drinks called Sunny Delight, which arepacked by Gerber.
A significant market trend is the attemptby manufacturers to attract adult consumers by offering a wider variety of juice flavours,including cranberry, while healthy drinks have been used to appeal to mothers buying forchildren.
The nature of the UK fruit juices and juicedrinks market has changed markedly in recent times following a series of acquisitions.Tropicana acquired apple juice specialist Copella Fruit Juices in early 1998 to complementits existing strength in chilled orange juice. Two dairy companies - MD Foods and Glanbia- disposed of their juice operations during the past year. Gerber acquired MD Foods'juice interests and is using the extra capacity to meet growing demand for Procter &Gamble's newly launched Sunny Delight. Gerber had earlier consolidated its UKstanding by taking over the Ocean Spray brand in the UK as well as the production andsales of some of Nestle's brands.
Glanbia sold its juices business toPrinces, which has been steadily expanding its UK soft drinks interests and now ranksthird behind CCSB and Britvic. Princes has also entered a partnership agreement with SouthAfrican owned Capespan International, which has formed a new Fruit Juice Division to takecontrol of all fruit juice under the Cape and Outspan brands in Europe. Anothersignificant deal involved Del Monte purchasing the Just Juice juices and juice drinksbusiness from Tomkins for £10.5 million.
On the international front, PepsiCoacquired Tropicana Products, the world's largest producer and marketer of brandedjuices, last August for $3.3 billion. PepsiCo's rationale for the acquisition was toexpand its portfolio of international soft drinks brands and to extend its reach into the'morning' period, when consumption of traditional soft drinks is relatively low.Tropicana is the leading chilled orange juice in the US where the $16 billion juice andjuice drinks market is growing by 5% annually. However, with orange juice featuring inonly one in five breakfasts in the US, there is still plenty of scope for further growth.
Europe and other regions beyond NorthAmerica offer even better prospects. Consumption of fruit juices and juice drinks inEurope is less than half the per capita consumption level of the 15 gallons per annum inNorth America.
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